NBTC expects TV advertising costs to drop, industry to grow
February 03, 2014 00:00 By Usanee Mongkolporn
The national broadcasting committee believes that TV advertising revenue will grow along with the upcoming 24 terrestrial commercial digital TV channels.
Natee Sukonrat, chairman of the broadcasting committee of the National Broadcasting and Telecommunications Commission (NBTC), made the remark to the broadcasting industry analysts recently in the NBTC’s meeting with the analysts on the digital TV landscape issue.
He said that the total value of TV advertising was Bt60 billion per year. With six analog TV channels at present and a maximum rate of around Bt500,000 per minute, only a handful number of companies could afford to spend on advertising.
But with new choices of 24 new digital TV channels to compete for advertising, the advertising rate is expected to drop to a level that is more affordable for a greater number of companies.
“We’ll see new faces of ads spenders, which are small and medium sized companies,” he said.
Limit set at 24 channels
Natee confirmed that the broadcasting committee would no more grant a commercial digital TV channel licence but would limit the licence number to the existing 24 channels, even if in the future the technology technically enables the NBTC to create new more digital TV channels.
“If we auction additional commercial channel licences, we’ll be definitely sued by the operators of these 24 channels as we’ve announced that there would be no more additional commercial licences,” he noted.
The broadcasting committee |successfully auctioned 24 commercial terrestrial digital TV channel licences last December, which |raised a total of Bt50.862 billion. Of this, seven channels are High Definition (HD) variety channel licences, seven are Standard Definition (SD) variety channel licences, seven SD news channel licences, and three SD family and kids channel licences.
He said that if the technology in the future enables the NBTC to “create” more digital TV channels, it would opt instead to use such technology to increase the broadcasting capacity of the existing 24 digital TV channels by allowing licence holders to upgrade their SD channels to HD ones.
For an example, if the committee decides to upgrade one SD news channel to the HD one, it will launch a closed bid among the seven existing SD news channel operators for them to propose prices to upgrade their channels to the HD quality.
Analog to be used for digital radio
Natee added that the analog TV spectra, when they were return to the NBTC by the state agencies, would be used to provide digital radio channels, not digital TV.
When asked by the analysts if |the auction, which saw operators |pay up to several billion baht |for licences, may financially hurt licence winners and cause them to collapse later, Natee said the watchdog had shared risk with licence |winners by allowing them to pay the upfront cost on six-year annual instalment basis.
Natee said that the broadcasting committee had yet to finalise the price of vouchers it will give away to all 22 million households to buy digital TV set-top boxes or TVs with built-in digital-TV systems. The give-away will take around six months to complete.
The committee has reportedly considered raising the value of these vouchers to around Bt1,000 from the originally planned Bt690.
According to the committee's target, by June, people in 11 key provinces – half of the country’s 22 million TV-equipped households – will be able to watch public and commercial channels on digital terrestrial television after its official launch on April 1.
In April, residents in Bangkok, Nakhon Ratchasima, Chiang Mai and Songkhla will be the first group in the Kingdom to experience this new digital service, followed by residents in Ubon Ratchathani, Surat Thani and Rayong in May, and people in Sing Buri, Sukhothai, Khon Kaen and Udon Thani in June.