With its grand plan to become a "superhighway for broadcasting",
Thailand's new cable operator initially raised hopes that it would bring
much-needed change to the television industry, now under the control of
what is described as a "cosy duopoly".
But World Star TV faces an uphill climb, not least a battle to prove its
legality. An investigation into this very issue has been launched by the
Prime Minister's office.
All this in an industry riddled by conflict, power plays and sometimes
open violence that has so far claimed the lives of two regulatory
officials.
Despite its legal woes, executives insist that World Star is free to air
and has the right to carry advertising. World Star had initially planned
to broadcast 12 channels nationwide, until a Government body reminded it
that the concession specified analog broadcasts only. Jaising Narula, a
World Star executive, said the operator was broadcasting four analog
channels in the Bangkok area.
Programming now includes foreign films, documentaries and public-service
programmes made by the National Police Office. If all goes according to
plan, programming will take many different forms as channels are
subcontracted to content providers.
"We aim to be a superhighway for broadcasting; anybody can come to us
and secure their own channel," says Jaising, adding that it was talking
to a number of content providers.
Confidence in the business plan appears to outweigh considerations about
the launch coinciding with an economic downturn. Jaising adds: "We will
be offering so much content on so many channels that we are not
concerned about today's soft market conditions."
If World Star does what Jaising promises, it would mark the first
significant change in the industry since the creation in 1998 of
Universal Broadcasting Corporation (UBC) through the merger of former
cable rivals IBC and UTV.
The last new channel on the scene was ITV, set up in the wake of the May
1992 democracy uprising as an independent voice. ITV is now owned in
part by Prime Minister Thaksin Shinawatra and has come under fire for
promoting the PM and his businesses. Significantly, it seems political
involvement in World Star will also be high, with a police general and a
vice-admiral among its investors.
Political involvement aside, the World Trade Organisation has been
prodding Thailand to open up its industries, including television.
Officially, a series of radical broadcasting reform measures are
underway, aimed at reducing political and military interest and
influence in the media and opening up more opportunities to the private
sector.
In reality, nothing much is happening, sources say. Political influence
is still rampant, as a recent controversy regarding a sacked announcer
who spoke out against the current Government demonstrates. Formation of
the National Broadcasting Commission to oversee media reform has stalled
in bickering over membership regulations, say insiders.
Which leaves some industry quarters to conclude that little has changed
since the murder five years ago of Sangchai Sunthornvut, the director of
the Mass Communications Organisation of Thailand (MCOT), the broadcast
regulatory agency.
According to Busakorn Suriyasarn, an academic who specialises in
Thailand's media industry, Sangchai was shot because the reform-minded
director challenged vested interests inside MCOT, an organisation
described as a "twilight zone" of corruption.
Sangchai was the second broadcast executive to be murdered in 15 years
and just one very visible symbol of a decades-old drama of conflicts and
sometimes open vio- lence in the broadcasting industry. Sources paint a
picture of an industry regulated and tightly controlled by a powerful
group, comprising government officials, military figures and business
families, with little sign of change in the near term.
The spoils of this industry are large: ACNielsen estimates that TV
advertising amounted to 30 billion baht (US$670 million) in 2000.
Fighting for a share of the spend are six free-TV operators. Three
free-to-air stations - Channels 3, 7, and ITV - are privately owned and
operated, while Channels 5, 9, and 11 are owned and operated by the
military or the state agencies.
Although all free-TV stations except Channel 11 are allowed to sell
timeslots, the most valuable ad space is controlled by a "very cozy
duopoly", says one Thai media agency executive, referring to Channels 3
and 7.
Sources add that since the other channels generally serve as mouthpieces
for their respective controllers, the quality and style of their
programming are not optimised to gain competitive ratings. This leaves
Channel 3, a part of a media empire controlled by the Maleenont family,
and Channel 7, run by the powerful Kanasoot family, commanding control
of millions of dollars of ad time.
The two channels are engaged in a constant ratings war. Channel 3
currently has a slight ratings lead, but market analysts suggest that
Channel 7's offerings for the fourth quarter are strong. "Channel 3 is a
bit more attractive to advertisers interested in Bangkok, because the
programming is more cosmopolitan, but Channel 7 has a strong prime-time
drama line-up that should do well," says a Thai TV buyer.
To get their ads shown, media buyers have to play by a curious set of
rules unique to Thailand. According to Busakorn, a struggle between the
state powers, wielding regulatory control, and commercial interests,
holding growing advertising revenue, led to the development in the 1960s
of a unique "quota" system of ad space brokerage that still prevails
today.
The TV channels hold the reins of power in this situation, parcelling
out to the various media agencies a certain amount of ad space to run
their client's spots.
An agency source who insisted on anonymity said the quotas were
generally allotted according to the size of the agencies' bookings and,
if not used to the satisfaction of the TV station, could be quickly
reassigned. "Media agencies are forced to compete fiercely for the
quotas, because without them you can't place your ads," said a
source.
Despite the softening ad market, channels 3 and 7 command such a large
market share that they are not forced to offer discounts. In fact, the
two channels had recently announced plans to raise their rates, a
decision Channel 3 only rescinded after the dismal economic forecasts
following the US tragedy. Channel 7 has said it will stand by its rate
increase.
Thailand's pay-TV sector is also defined by political power struggles
and unusual business practices. As the country's major cable operator,
UBC has a virtual monopoly in Thailand, but because its concession
states that it cannot carry advertising, the operator is in dire
financial straits, and has been unsuccessfully asking the Government to
allow it to carry pass-through ads. Financially crippled, UBC poses
little threat to the dominant free TV channels.
Unless World Star can put its legal problems behind it and add a new
competitive dimension to the industry, Thailand's TV sector will
continue to function like a vestige of an outdated era. "Why should it
change? There is no outside force encouraging reform," says a source.
"The pitch has been set. We all have to play on it for now."
