Although its live broadcasts of the Euro 2012 soccer tournament created large profits, Thailand-based music and entertainment giant GMM Grammy faces challenges, particularly for its coming pay-TV services, according to a media analysis.
GMM Z, the satellite broadcast unit of GMM Grammy, plans to launch exclusive content to spur another 1 million sales of its set-top boxes during the rest of this year after Euro 2012 ended on July 2 with more than a million boxes sold.
Dew Waratangtagoon, managing director for platform strategy at GMM Z, told The Nation that in the middle of this month, the company would launch new exclusive content to be screened on its three special channels: GMM Z Hits, GMM Z Theatre and GMM Z Genius. Customers will get access to these channels for free.
Though Dew declined to provide details about this new content, he said he strongly believed the material would be adequate to retain its existing customers as well as lure new ones.
The company has retained its sales target of 2 million set-top boxes by the end of the year. Revenue from selling another 1 million boxes will mainly be offset by the cost of operating cost the exclusive channels.
Dew said the company's new pay-TV service might be launched in the final quarter of this year but would be offered as an a-la-carte package under prepaid conditions.
In a previous interview, Thana Thienachariya, chief executive officer of GMM Z, said his company would offer prepaid service to registered customers who want to access pay-TV content on its 10 special channels. For example, the package that costs Bt300 monthly offers five or six sports channels, and the package that costs Bt200 monthly offers four entertainment channels. With this new service, the company expects to have 100,000 subscribers by the end of this year, said the CEO.
However, GMM Grammy might revise its strategy for pay-TV services after its rival RS launched its "Sunbox" satellite TV set-top boxes, which will allow each buyer to access live coverage of La Liga, the most popular soccer league in Spain, from the 2012-13 through 2015-16 seasons.
Under RS's aggressive marketing effort, it aims to have 500,000 subscribers by end of the first season of La Liga by offering a Bt1,200 annual subscription fee, calculating that its customers pay only Bt100 a month.
An analysis by Kiatnakin Securities found that with the strong competition, GMM Grammy would face another challenge in the pay-TV business as its operating cost for its exclusive channels is about Bt1 billion a year.
Though GMM Grammy might see a surge in its results for the second quarter of this year due to the Euro 2012 soccer tournament, the second half cannot be predicted, as so far its pay-TV service via GMM Z box remains unclear, according to the analysis.
Additionally, Kiatnakin estimated that GMM Grammy would enjoy about Bt200 million to Bt300 million in profit from the 1 million to 1.1 million set-top boxes sold during Euro 2012, lower than the target of 1.5 million boxes. In the meantime, GMM Grammy probably gained revenue from sponsorship of about Bt300 million to Bt400 million.
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THE NATION July 9, 2012 1:00 am
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