Thailand's advertising industry is bracing for potential disaster
following the implementation of Article 40, which will dramatically
change the nature of television content and commercial airtime
rates.
The draconian order specifies that 60 per cent of all television
programming must be used for educational programming, government public
awareness campaigns, or non-government organisation (NGO)
promotions.
The Advertising Association of Thailand (AAT) president and Young &
Rubicam co-chairman, Parames Rachjaibun, said local small to
medium-sized advertising agencies would be hard pressed to survive.
"Local agencies who traditionally use TV as primary media won't be able
to afford television airtime once Article 40 takes effect.
"They will have to pay for other media or consolidate with other
companies.
It is going to be tough."
In a worst case scenario, he said only 10 to 15 local agencies from the
existing 100 that are AAT members would survive.
"It will create a disaster for our industry," Mr Parames predicted.
He said that the new programming, which might not run TVCs, would cut
traditional entertainment programming and potential revenue generating
airtime to 40 per cent.
"This is not clear but it is the assumption, and we are worried it is
more likely to happen than not.
"For commercial airtime, the cake will shrink from 100 to 40 per cent,
and we are predicting the cost per minute will increase by as much as
100 per cent," Mr Parames, said.
The industry is hoping these issues will be clarified when the Thai
government names a seven-person board later this month that will be
responsible for interpreting and implementing Article 40.
However, many are concerned the board will not have any advertising or
media representation, and it will consist of only government officials
and representatives from NGOs.
Mr Parames said the AAT will speak with the government to try and be
part of the panel.
"I told the AAT that we will lobby the government to be part of the
board.
"But we will have to treat the matter carefully as we don't know who the
seven panel members will be."
Media specialists have also expressed concern about the impact of
Article 40 on programme quality.
OMD managing director Martin Dufty said that television content
consisting of educational programming was hardly likely to drive ratings
through the roof.
"A television programming environment consisting of government-dictated
content would be in no ones' interest," he said.
Mr Dufty agreed with Mr Parames that Article 40 could theoretically lead
to significant inflation and spiralling media rates.
He said that even China, which for years was a closed broadcast market,
was moving towards being a deregulated market.
"It means effective regulation of the broadcast industry in Thailand,
while the current global trend is deregulation.
"It will limit the expansion of small agencies by squeezing them out of
the market," he said.
