The arrival of digital TV will be a game-changer across the board

Economy March 29, 2014 00:00

By Pradon Sirakovit
Special to T

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On Tuesday, April 1, people in some provinces will be able to watch digital television for the first time in the Kingdom's history.

The level of clarity will have you fixated on a news anchor’s pores, rather than the news itself. I’m joking, but that’s exactly what we’re going to expect soon.
How is this going to affect consumers’ lives? For starters, they are going to enjoy more quality content as opposed to mindless soap operas that half the country is addicted to. 
Twenty-four channels will be available and vying for the same eyeballs. The total paid by the 17 companies for these 24 channels was Bt51 billion. Some are the usual suspects and some are new to the industry but are cash-rich companies with a burning desire to venture into pastures new. 
Trust me, if they think slapping down a few billion baht for the right to air a channel entitles them to instant success, they must be deluded. But wait! Let’s slap a few more million down to attract talent. Because at the end of the day, your content is only as good as the people you hire, and nurture.
I just disclosed some really important implications in the last paragraph.
First is competition. Channel 3 and 7 currently control 70 per cent of all advertising revenue annually. Last year TV revenue alone reached Bt70 billion. Do the math. But that’s going to change. Advertisers will have 24 channels to place their products on. 
Small and medium-sized enterprises that once were not able to purchase prime-time spots will now have the luxury of promoting their brands in an array of channels not limited to cable or satellite TV. The reason? Channels will need to reduce advertising rates to remain competitive, and some new entrants have already adopted that price strategy. 
Unless the current giants can maintain their existing ratings, things will be very different. I’m not suggesting a price war will break out among channels but there will definitely be a shift of power towards advertisers and even agencies. Media agencies will become more influential than ever in suggesting the right mix to clients.
After all, Nielsen ratings are not yet available, so it is up to the agencies’ discretion in picking the right channels for clients to advertise their products in.
As for ratings, we have seen Nielsen dominate the industry. But it will have its work cut out in introducing new methods to grab multi-platform viewing behaviour since the proliferation of smart devices. Can we expect competition in the ratings industry in the future? Let’s wait and see.
The second factor is employment. This is probably the best time to be in the media industry. Many jobs will be created and these channels will fight hard to lure and retain the most creative talents the market has to offer.
Production companies that supply shows to these channels will be the first to fill up the roster. Since there is more airtime available, channels will need to fill these slots quickly. 
Production companies will need to respond to those challenges swiftly. This creates the need for more personnel, both in quantity and quality. 
And since advertising will become more active than ever, agency jobs will also be on the rise. 
The third factor is devices. The set-top-box industry and smart TVs will see a surge in sales like never before, because for viewers to reap the benefits of viewing digital content fully, they need digital devices. 
Furthermore, channels will also have to develop their capability in order to reach consumers throughout all existing platforms, stationary and mobile alike. A surge in portable smart devices will be the result of this historical shift.
The old adage “content is king” will become more relevant than ever. We could even see a content war on the horizon. 
But that’s for another discussion. This will become a great learning experience for everyone, and it’s a great time to be in media. 
This project is a marathon, not a 100-metre sprint, so let’s see how things pan out once the system gets up and running.
Pradon Sirakovit is head of strategy and innovation, IPG Mediabrands Thailand.