With Digital TV, End Looms for Thailand’s Broadcasting Monopolies

By Marwaan Macan Markar 22 November 2013

BANGKOK — Under the watchful gaze of Peerawat Chottitommo, a veteran broadcaster, a team of young Thais monitors programs unfolding on a bank of 12 television screens on the wall of a new studio. In a nearby room, a reporting team with two cameras in hand prepares to go out to cover an event.

But the programs being produced within this rundown two-story building that once housed a popular disco will not go on air. Rather, the 250-strong staff under Mr. Peerawat’s wing is going through the motions of a typical news reporting and production day in this northern Bangkok television studio. Such dry runs are in readiness for the launch of a new free-to-air, nationwide broadcaster.

This entrant is a venture of Triple V Broadcast, a company affiliated with Thai Rath, Thailand’s largest local-language daily. The latter already enjoys an impressive one million circulation and has a reputation for shaping the national agenda as a leader of Thailand’s famously sensationalistic and free-wheeling newspaper industry. And now it wants to capitalize on its recognized news brand by setting its sights on the world of digital television.

“Digital TV is our next most important venture,” said Vachara Vacharaphol, a ponytail-sporting 32-year-old whose grandfather founded Thai Rath five decades ago. “When people hear the name Thai Rath they will link it to the news territory, and that is a strength for us going into this area now.”

Other media houses have similar ambitions. Over a period of three days in September, industry leaders wasted no time in applying for new licenses up for grabs in a bid to capitalize on this ground-breaking moment in local broadcasting. Among those leading the charge were Channel Three and Channel Seven, at present the most watched of the country’s five free-to-air broadcasters; TrueVisions, Thailand’s largest cable-television provider; and GMM Grammy, a leading satellite television operator.

Thailand’s two English-language newspaper houses, The Bangkok Post and The Nation, also made plays to be part of a new wave of media expansion that some industry analysts estimate will require multi-billion baht investments. Thai Rath, for instance, has earmarked the start-up costs for its digital television venture to hit 5 billion baht (US$160 million).

The National Broadcasting and Telecommunications Commission (NBTC) described the three-day sale of the documents to bid for the planned digital television stations as “the hottest auction in Thailand’s broadcasting history.” The NBTC, a Parliament-approved regulator, saw 33 companies snap up 49 application packages, each one costing 1.07 million baht ($34,000).

The buzz in the media world conveys what is at stake: The age of the free-to-air television broadcast monopolized by five conservative and pro-establishment stations is over. It will be replaced, starting next year, by 24 independently-run digital television broadcasters with a national reach. The stations, which will be available in both standard definition (SD) and high definition (HD), will offer content ranging from news and documentaries to children- and family-friendly programs and variety entertainment.

“This will result in dramatic change in the television industry,” Supinya Klangnarong, one of the 11 commissioners of the NBTC, explained in an interview. “It will be a challenge to the status quo, since TV in Thailand has been monopolized for the past 60 years. That is not just the monopoly of the market, but a monopoly of thought and content that is directed at the Thai people.”

The sentiment is understandable. After all, television in Thailand has for the most part been under the sway of the Thai military. It was this powerful institution, infamous for launching 18 successful coups and ruling the country through juntas for most of its years since 1932, when Thailand became a constitutional monarchy, which introduced television as a propaganda tool in the 1950s. The military currently owns two television stations and 200 radio stations.

The tone set by the generals was followed by government agencies when the television landscape broadened in the 1980s. Then semi-commercial stations emerged after getting television concessions from either the military or the state. These five free-to-air national broadcasters currently reach 22 million households in a country of 67 million people. Nearly six million of them are in urban areas.

The shift toward digital television stations will see the prevailing concessions-based regime give way to a transparent, competitive environment based on buying the licenses to broadcast. “They will have to compete for audiences and for advertising to support their productions,” said Ms. Supinya. “The only restrictions [the new stations will face] are those governed in the license contract about the proportion of contents, such as the percentage for news or for variety and entertainment.”

According to the NBTC, at least 50 percent of television users should have access to this plethora of digital content by next year. The following years will see progressive increases, with coverage expected to hit 90 percent in four years.

For Thai banks, this liberalization of the television industry is a money-spinner. After all, the starting price to bid for the licenses being auctioned has been set at 140 million baht ($4.5 million) for a children’s channel, 220 million baht ($7 million) for a news channel and 380 million baht ($12.2 million) for an SD variety channel. The NBTC estimates the initial licensing and airtime rental cost for the transmission networks to hit 50 billion baht ($1.6 billion).

“Many banks would be interested to jump in since these are projects with opportunities that could be implemented soon,” noted Vasin Vanichvoranum, executive vice president of Kasikornbank. “The change to digital TV will spur new investments in many areas.”

Preliminary research by Kasikornbank estimates that the economic value of this digital transformation will reach 100 billion baht ($3.2 billion). That figure is based on calculations for the production of new digital television monitors, related equipment to receive transmissions, and the costs for licenses, airtime rental and producing content.

Analysts are flagging the buoyant advertising market as the barometer to gauge the impact digital television will have following its 2014 launch. Thailand’s total advertising budget for 2011 was estimated at $3.2 billion, Credit Suisse revealed in a report. More than half of that figure—$1.8 billion—went into television advertising.

“It remains to be seen if the advertising pie will remain the same to be fought over by many more players, or if new advertising money will pour in,” said Laurent Malespine, managing director of Don’t Blink, the Thailand representative for Singapore’s Media Corp Studios. “The print media could take a hit.”

This story was first published in the November 2013 print edition of The Irrawaddy magazine.