Bangkok--23 Nov--Fitch Ratings
Fitch Ratings says Thai television operators will continue to face challenges in 2018 from intense competition and increasing pressure from the transition of viewership to online media platforms. These challenges will limit the growth of TV operators' revenue and profitability.
We believe competition will remain a key drag on most TV operators' cash flow growth in 2018 and that the industry will spend more on production and procurement of content to compete for viewer ratings. The operating performance of the incumbents - Channel 3, Channel 7, Channel 9, and Channel 5 - is likely to continue to decline as they lose market share to new digital TV operators.
However, most of the new operators' cash flow growth will be slim as investment to boost viewership is likely to outpace advertising revenue growth. However, the National Broadcasting and Telecommunications Commission's approval of a reduction in the annual digital TV licence fee, which will be put to a public hearing and likely to take effect in late December 2017, should help reduce cost pressures.
We expect only a few of the new 16 digital TV channels to maintain their strong content provision, channel ratings, revenue and cash flow improvement in 2018. These include WORKPOINT TV (owned by Workpoint Entertainment Public Company Limited), MONO (owned by Mono Technology Public Company Limited), Channel 8 (owned by RS Public Company Limited), and ONE (owned by GMM Grammy Public Company Limited's group). Although advertising revenue for the Thai media industry declined in 9M17, the aggregate revenue and EBITDA of these operators grew strongly by 21% and 216%, respectively.
The global online video services platforms, including YouTube, LINE, and Facebook, will gain advertising share over the next couple of years at the expense of traditional media, including TV. Fitch expects TV operators to stream more of their content. However, they will need to find ways to better monetise the content as advertising rate per view generated from these online platforms is significantly smaller than from their owned-TV platforms.