For-profit TV on the horizon:
Cable and pay-TV firms renegotiate concessions
By Jon Fernquest |
New for-profit TV opportunities have arisen under Thailand's new broadcasting laws.
These opportunities are the focus of an article in today's Bangkok Post business section.
Pay-TV and cable TV operators like TrueVisions, the largest, will be adding for-profit advertisements to their television programmes for the first time:
"TrueVisions now sells tie-in ads in some of its programmes such as news. Under the new law, cable TV operators can sell a maximum of six minutes of airtime per hour but not exceeding 120 minutes per day."
TrueVisions has to renegotiate their concessions with Mass Communication Organization of Thailand (MCOT) first.
Here is the article in full:
(Note: After reading the article, make sure to Check out more articles on the media and telecommunications in Thailand.)
TrueVisions testing the ad waters
Broadcasting Act lets pay-TV firms sell timeWORANUJ MANEERUNGSEE
Thursday July 03, 2008
TrueVisions, the country's biggest pay-TV operator, is beginning to earn a revenue stream from advertisements for the first time after the Broadcasting Act took effect in March, according to chief commercial officer Ong-ard Prapakamol.
Mr Ong-ard said that since the law allowed cable TV operators to sell advertising airtime, TrueVisions had started to let media-buying agencies know what kinds of programmes it planned to sell, mostly those high on the list compiled by Nielsen, the agency it has commissioned to rate its programmes.
"But we have yet to sell our airtime since we haven't reached a conclusion with MCOT," said Mr Ong-ard, referring to contracts between TrueVisions and MCOT Plc, which granted the concession to the pay-TV operator.
TrueVisions now sells tie-in ads in some of its programmes such as news. Under the new law, cable TV operators can sell a maximum of six minutes of airtime per hour but not exceeding 120 minutes per day.
A source at MCOT said that according to the contract signed more than a decade ago, TrueVisions, then UTV, could earn revenue only from a single source - subscription fees. But the circumstances have changed after the passage of the new act and the company is entitled to benefit from the new provision just like any other cable TV operator, provided it renegotiates the issue with MCOT.
The change should benefit all stakeholders, including subscribers, he noted.
"On top of that, the concession fee paid by TrueVisions should be reviewed since it earns more revenue," the source said. Currently, it pays a concession fee of 6.5% of annual revenue.
Actually, the renegotiation started under the previous MCOT executive board, but was put on hold, to be considered by the newly appointed board.
The same source said the review of the contract between TrueVisions and MCOT might be more complicated because the value of the new contract might exceed one billion baht, a threshold required to comply with the Joint Public-Private Venture Act.
Wannee Ruttanaphon, chairwoman of the media buying agency Initiative, said TrueVisions had presented programmes and packages to her agency for feedback. Most of the programmes are produced by the company itself and exact prices have not been quoted yet. They are likely to be in the range of 30,000 to 50,000 baht per spot while free-to-air TV operators charge up to 450,000 baht a minute in prime time.
Ms Wannee said the rates were much cheaper than for free-to-air TV, but the number of viewers was much smaller too, calling into question the ability to reach audiences. However, she said one of TrueVisions' advantages was its ability to reach specific target groups.
TrueVisions claims one million subscribers, 600,000 of whom pay fees. The rest come from joint promotion campaigns with the mobile service of its parent company, True Corporation.
(Source: Bangkok Post, business, 03-07-08, WORANUJ MANEERUNGSEE, temp-link)
Vocabulary:
on the horizon - will happen in the near future
testing the waters - checking a situation first, before getting involved in the situation (before you enter a bath or swimming pool you touch the water with your hand or foot first to check whether the water is hot or not)
sell advertising time on TV - time during a TV show is sold to companies to advertise their products, the income from these advertisements pays for the TV show
a pay-TV operator - a company that sells access to TV channels to subscribers
a revenue stream - a steady income over a period of several weeks or months
earn a revenue stream from advertisements - receive money over several weeks or months from ads in a TV show
the new Broadcasting Act - the new law on television and radio broadcasting passed by the post-coup National Legislative Assembly (NLA)
took effect in March - a law started in March (people now have to follow the law or risk punishment)
cable television - TV through a cable rather than the air (radio waves) ("a system of providing television to consumers via radio frequency signals transmitted to televisions through fixed optical fibers or coaxial cables as opposed to the over-the-air method used in traditional television broadcasting (via radio waves) in which a television antenna is required") (See Wikipedia)
cable TV operators - companies that run TV channels delivered to customers (subscribers) over a cable rather than the airwaves
media-buying agencies - a firm that purchases advertising space in different media (television, newspaper, magazine, internet) for an advertiser or an advertising agency
Nielsen, Nielsen Ratings - famous marketing research company that developed the first system for measuring audiences (how many people are watching a television programme), advertisers use this information to select shows to advertise their products, shows with larger audiences have more expensive advertisements (See Wikipedia on Nielsen Ratings)
rate TV programmes - give each TV programme a number that shows how large its audience is, and therefore how expensive advertising on that show is
high on the list compiled by Nielsen - very popular TV shows with large audiences
commission X to do Y - pay X money to do task Y
agency it has commissioned to rate its programmes - hire a firm to measure how popular its TV programmes are, how many people watch them
Mass Communication Organization of Thailand (MCOT) a government news agency, recently privatised, also operates television channel 9 focusing on educational content, also administers television concessions granted to private companies like TrueVisions (See website)
a concession - a special right or privilege to run a certain kind of business for a certain period of time, usually given by the government (See glossary)
granted the concession to - give the concession to
a concession fee - the money paid for the concession
a tie-in - something connnected with or related to
tie-in ads - ads that are connected with or related to the TV programme
subscription fees - money paid every month or year to receive some service or good regularly (for example, a newspaper subscription fee)
circumstances - the situation, the conditions when an event happens
circumstances have changed - the situation has changed
entitled to Y - have the right right to get Y, deserve to get Y
a provision - an arrangement for the future, in a contract, for example (See glossary)
entitled to benefit from the new provision - have the right to receive benfits according to the new law
renegotiates the issue - have discussions to agree on new terms to the current contract
stakeholders - a person who will gain or lose depending on whether something fails or succeeds (See glossary)
benefit all stakeholders - everyone wins and gains, no one loses
put on hold - stop temporarily
a threshold - a special level, when the value passes this level something special happens (for example, when the water level passed the threshhold, a flood warning sounded)
comply with - follow a rule or law
Joint Public-Private Venture Act - Thailand's law on businesses that are run jointly between the government and private companies
feedback - someone tells how you are doing (good or bad) and how you can improve
presented for feedback - someone is shown a plan so that they can provide feedback on the plan
free-to-air TV operators - the large TV stations, like channel 3, that broadcast through the air (airwaves, radio waves)
calling into question - not accepting something immediately, but rather asking questions about it, to find out the truth
target - what you aim to reach or achieve (noun), or trying to reach it (verb) (See glossary)
target groups - groups of people that companies want to view their advertisements (for example, teens that have acne and who are searching for acne medicine)
ability to reach specific target groups - whether a TV programme is watched by the people targeted by the advertisement
