With a 94% adult literacy rate, Thailand enjoys a thriving and diverse media environment that has emerged after decades of state-led development. Lifestyle and entertainment formats have proven the most popular across all mediums, which are led by television and radio. Print media has suffered in the advent of the digital age, which has stimulated an accelerating market-based transition heavily influenced by the proliferation of smartphones and tablets. The industry’s key battleground, however, is cable and satellite coverage. With over 50% penetration, the segment is rapidly expanding into upcountry areas to tap into the mass markets. A strong demand for local content has complemented Thailand’s positioning as a regional and international production house for TV, cinema and advertising.
In parallel, political instabilities have precipitated a dramatic upswing in media politicisation and public debate, spawning an unprecedented and sustained level of government scrutiny. Viewing such unbridled media with growing unease over the last 10 years, Thai governments have been engaged in censorship and intervention that has seen the country fall 100 places on the Reporters Without Borders Press Freedom Index.
OVERSIGHT: After the 2006 coup d’état and an overhaul of the sector’s laws and frameworks, partially in response to former Prime Minister Thaksin Shinawatra’s own media machinations, liberalisation and regulation has been gaining momentum.
Press freedom is enshrined in the 2007 constitution and the Printing Act of the same year, reversing the 1941 Printing and Publishing Act, which reserved the government’s right to shut down media outlets. In 2008 this was followed by the Business Broadcasting Act, which was passed with the intention of improving market competitiveness. Amended in 2009, this now allows cable and satellite stations to profit from commercials. Moreover, the Thai Public Broadcasting Service Act of 2008 ensured the editorial independence of channel iTV, now known as Thai PBS, as a public broadcaster. However, the 2007 Computer Crimes Act has been viewed by human rights organisations as a tool to stifle online debate and arbitrarily prosecute individuals.
RECLAIMING FREQUENCIES: At the forefront of the media sector is the National Broadcasting and Telecommunications Commission (NBTC), the converged telecoms and broadcast regulator. After replacing the National Telecommunications Commission (NTC) in 2011, the NBTC’s 11-member board began reclaiming the country’s frequencies to ensure an orderly spectrum allocation following the 2010 Frequency Allocation Act (see Telecoms & IT chapter).
To achieve its aims, the NBTC must face a weighty triumvirate of political parties, commercial institutions and state agencies that have controlled and profited from the sector over the past 60 years. Thailand’s frequencies are “owned” or claimed by the military and other state agencies, which have leased them to commercial firms in violation of constitutional strictures that they be utilised for public service only. Whilst the NBTC has the legal authority, it does not yet have the influence to overhaul the sector, as demonstrated in the changes to the country’s frequency allocation master plan in March 2012. All concessions were to terminate on the adoption of the master plan, but incumbent state agencies have been given 15 additional years to operate on their current licences. This is at odds with both the 2007 and 1997 constitutions that enshrined liberalisation of the broadcasting frequencies and telecommunications, which are regarded as national resources.
ONGOING TALKS: The NBTC is continuing negotiations with state agencies and hopes to reclaim about 50% of licences, according to Supinya Klangnarong, the NBTC commissioner and a former civil rights activist. However, the NBTC’s decisions are subject to public hearings and open to legal challenges, which is likely to reinforce NTC-era political-legal deadlocks. Despite the NBTC’s control of future digital licensing, which should afford it greater leverage over spectrum reallocations, the mass market is not yet ready to absorb the costs of such a transition. Speaking to OBG prior to the master plan’s adoption, Supinya said, “From 2015, it may take another decade before a full transition can be achieved.” This leaves radio, TV and telecoms facing a protracted and opaque transition to digital.
A CLOSE WATCH: Moreover, existing censorship laws like the Computer Crimes Act continue to make media publishers sensitive to the political content of their programmes and users. As of December 2011, Freedom Against Censorship Thailand documented over 777,000 websites blocked for “obscene” content or as likely to cause “public agitation”, terms that have not yet been defined by the Computer Crimes Act.
Such activities have helped erode Thailand’s international standing. From a ranking of 59 in the 2004 Press Freedom Index, the country fell almost 100 places to 153 in 2010. Despite staging a small recovery in 2011 to 137, Thailand’s ubiquitous mechanisms of censorship continue to dominate much of the sectoral debate, which has direct implications for businesses. Whereas media agencies say this has not had an impact on their clients, businesses remain wary of liability following the prosecution of webmasters and administrators who do not promptly remove content posted by public users that is deemed offensive.
GOING DIGITAL: Thailand may yet emerge as a digital media giant, but the speed of adoption has disappointed many observers. Despite an internet penetration rate of 50%, equivalent to 30m subscribers, the country has not yet tapped its digital potential, though 2011 saw promising signs of an accelerating uptake.
Internet giant Google opened offices in Bangkok and launched a small and medium-sized enterprise (SME)- targeted scheme in June 2011 called “Thai Business, Go Online” with the Office of SME Promotions and the Department of Export Promotions. Generating 65,000 new business websites, it exceeded its 50,000 target, and Google reports that 40,000 new sites are already live, with an encouraging uptake in upcountry areas (see IT chapter). Omnicom Media Group (OMG) forecasts a good year for digital and online platforms in 2012, recording a 68.9% rise in spending year-on-year.
Social media has soared in turn, and AGB Nielsen, a global market research company, will begin to track social media from mid-2012. According to global public relations firm Aziam Burson-Marsteller, Facebook remains Thailand’s top social media website, with 15bn hits and 10.5m Thai users in 2011, followed at a distance by Hi5 and Twitter. With regards to overall media industry trends in Thailand, top websites remain lifestyle-orientated. Exteen.com topped OMG’s charts with 9.1m views per month, followed by pantip.com and sanook.com with 8.8m and 7.9m hits, respectively.
On the home front, the long absence of a national 3G network has kept smartphones to just 20% of the market, although AGB Nielsen believes smartphone usage will shoot to over 60% once unit prices drop below BT10,000 ($319), which some industry observers are predicting for 2012 with the roll-out of 3G networks. Yet with 36% of the internet users using them to access content online, smartphone usage is now dictating content design and production across all media formats. The government’s One Tablet One Student policy, which will add 900,000 tablets in 2012 alone to a market that usually sells 400,000 annually, should boost online usage as well. Local media quoted e-Book publisher OpenServe (Thailand) as anticipating market growth worth between BT1bn ($31.9m) and BT2bn ($63.8m).
TRANSITION: With internet users connected for over 16 hours every week, according to Nielsen, six hours more than is spent watching broadcast television, TV production houses are rolling out digital-compatible formats. Digital TV trials began in April 2012, and as Mindshare Thailand’s leader Paul Gibbins said: “A concern for broadcasters is that people are migrating out of free TV and the younger generation are using devices to watch content online. This penetration of internet TV will change how we consume content.”
This transition has been seen across the spectrum, with GMM Grammy, Thailand’s biggest media conglomerate, capitalising on its production house capabilities, launching a new music channel in 2012 that is anticipated to generate some BT60m ($1.91m) in revenue. Internet protocol TV (IPTV) providers are looking to replicate the success Japan and South Korea have had in this area, and 2012 saw two new entrants in the first quarter. V.R.M. Voiz Plus and Cubic Associates Group, both capable of streaming high-definition content on Thailand’s 2-Mbps bandwidths, joined emerging market players Buddy BB and 3BB. GMM Grammy competitor JSL Global Media has also diversified, and in 2012 invested in a studio complex that will allow them to work on pre- and post-production programming.
PREMIUM PRODUCTIONS: Thailand’s low production costs, which are estimated at roughly one-third of the Philippines’, have made the country the favoured location in the whole of South-east Asia. “Many foreign productions are increasingly being filmed in Thailand due to lower production costs, availability of high-quality equipment and multilingual Thai crews,” said Jamnan Siritan Nunbhakdi, the chairman of the executive board for JSL Global Media Company and president of the Radio-Television Broadcasting Professional Federation. “This has raised the competitiveness of the industry significantly in relation to neighbouring countries such as Singapore and Malaysia.”
However, it also faces growing competition from Malaysia’s National Film Development Corporation and Singapore’s Media Development Agency, which have been aggressively marketing and funding their own film production and location capabilities.
The country saw the number of foreign film productions drop in 2010, from 37 to 35, but government incentives for filmmakers helped bring that total to 49 in 2011. The Thailand Film Office is now looking to attract direct investment to boost competitiveness, particularly within ancillary services.
Whilst Thailand has enjoyed a number of homegrown cinema successes, notably “Ong Bak” and 2010 Palme d’Or winner, “Uncle Boonmee”, which have fuelled a growing number of national and local film festivals, growth in its production houses seem to lie outside film.
Host to some of the leading labs in the region – Technicolor, Oriental Post and Kantana – the country’s strong market share is translating into production of non-fiction television, particularly lifestyle and docu-reality programmes, as well as commercials. Whilst documentaries saw a 14% decline from 2009, to 151 in 2011, and films remained almost flat, advertisements grew 78% to 296, and TV series posted 65% growth with 86 productions. Within these segments, Thailand will find itself catering to a predominantly Asian demographic.
SOFA KINGS: Television remains the undisputed king of Thailand’s media and advertising empires. With an average penetration of 95.3% viewership in the last three years, the six terrestrial channels (3, 5, 7, 9 11 and Thai PBS) enjoy national coverage with no sub-regional competitors. Channels 3 and 7 form a duopoly, with a 70% market share, and the industry continues to see strong growth given a virtual monopoly on the national audience. All broadcasters rely on a mix of advertising as the main source of revenue, although channels 5 and 9 get some public funding. OMG monitoring showed TV spending peaked at BT62.23bn ($1.99bn) in 2011, up from BT52.93bn ($1.69bn) in 2009.
Local Thai drama, news and sports are the dominant genres in Thai television programming, in which the ubiquitous soap operas lead. These accounted for seven of the top 10 programmes on Channel 7 alone in 2011, according to OMG, and show little sign of falling from their top spots. However, in the push for ratings, new gaming and entertainment formats have begun to penetrate and shape the market.
INTERNATIONAL FORMATS: “Channel 3 has been very open to international content because when such content was aired, it increased the ratings, regardless of its time slot,” said Soonthorn Areerak, the managing director of marketing consultancy GroupM ESP. Responsible for Channel 3’s blockbuster “Thailand’s Got Talent” (TGT), which tripled audience ratings, earned over BT100m ($3.19m) in media coverage and achieved the country’s highest television ratings for a family entertainment programme at an average 9.7 out of 10. Soonthorn sees an accelerating evolution in free-to-air (FTA) content. “There are more players coming into cable and satellite markets, and the whole industry is in need of content. Free TV providers are after international content, whereas local stations want more domestic content. We expect this trend of providers acquiring finished products or licences for local production to continue for the next few years.”
The growing market traction of international formats has pulled some audiences back from cable and satellite, but with large capital costs, equivalent to an estimated BT280,000 ($8932) per minute advertising rate, big-name brand sponsors are necessary partners for local production houses. This prompted the entry of four more global brand sponsors to come onto the market in 2012. Furthermore, TGT’s sponsor, Unilever, is investing a further $6.5m in a second series and is going up against talent reality shows “The Voice”, “Iron Chef” and dating series “Take me out Thailand”.
CABLE’S CRUTCH: After years of moribund programming, a rise in the popularity of cable and satellite channels over the last five years has simulated a surge in new formats. Following amendments to the 2008 Business Broadcasting Act and with the high fragmentation of channels, which cater to niche markets, OMG has tracked a 33% growth in viewership in the past three years, reaching 38.9% in 2011. Today, there are over 200 satellite TV channels, constituting approximately 50% market penetration.
“Cable and satellite is now beginning to compete with the FTA channels by filling in the gaps during non-prime-time periods,” David Sinthu, the managing director of Nielsen Media Thailand, said. “However, it is not going to unseat terrestrial TV’s loyal following of its soap dramas.” Irrespective of this, Nielsen will introduce minute-by-minute ratings for cable and satellite channels later in 2012, an acknowledgement of the segment’s emerging importance (see analysis).
ON THE AIR: Comparable to cable’s penetration is radio, which is still popular but showing signs of decline. Its listenership remained relatively steady at 33.2% in 2011. Despite an 11% decline over the past three years, spending remained strong at BT6.25bn ($199.38m) in 2011. There are 40 stations in Bangkok and over 600 nationwide. Although the NBTC acknowledges 6601 registered community radio stations, it admits there may be many more engaged in political, religious and commercial activities. The true extent is unknown, although community radio stations have bore the brunt of antiThaksin media purges in the past six years, with the government closing approximately 40 stations that were identified as pro-red-shirt platforms.
With only a few international stations, Thai-language programmes dominate, and radio remains most popular in the provinces, where it is heavily focused on entertainment in the form of Thai songs and country music. In Bangkok, however, JS100, a traffic and talk radio station, leads. National favourite Luktung Mahanakorn and second-place Cool FM have just 1.85% and 1.27% audience share, respectively, according to OMG.
Most stations operate on FM frequencies, although AM waves carry a substantial portion. However, overlapping broadcast frequencies throughout Bangkok and the rest of Thailand are the surest sign of the previous state regulators’ failure at overseeing this. The NBTC is grappling to regain control of the airwaves and make sense of the mess inherited from a plethora of government agencies, including the military, state universities, the Posts and Telegraph Department, the Public Relations Department and MCOT, which previously managed the airwaves. The NBTC is only issuing one-year radio licences, which is deterring new entrants from coming onto the market, but the transition to digital, with all associated issues, remains the most viable solution to resolving the confusion in the sector.
PAPER TIGERS: In contrast to radio and television, reading newspapers remains a largely elite pursuit in Thailand, and the few foreign-language national publications are more often considered a token of prestige amongst the Thai demographic.
Across the Thai-language newspaper and magazine segments, there is limited appetite for consumption of news, and the leading titles are bastions of tabloid journalism focused on sensation, entertainment and celebrity gossip. The print segment remains relatively unregulated; however, given that most editors and journalists are educated urbanites, op-eds concerning political issues are typically measured, reasoned critiques.
With over 60 titles currently in circulation, the newspaper segment is fractured and highly competitive as well. All top 10 newspapers are Thai-language, are led by Thai Rath and Daily News, which each claim a readership of 13.1% and 6.57%, respectively, according to OMG. In third place, Khao Sod holds just 0.91%, marking the beginnings of a highly fractured market. Nationally, just two English-language broadsheet titles serve the expat and international business community: Bangkok Post and The Nation. However, concentrations of expats in regional centres such as Chiang Mai, Pattaya, Hua Hin and Phuket also offer a surfeit of domestic foreign-language tabloids.
In line with global trends, consumption of newspapers has seen a marked decline over the past few years. Following an annual 14% slump in readership between 2007 and 2009, according to AGB Nielsen Media Research, OMG recorded a further drop in consumption from 22.9% in 2009 to 17.5% in 2011. Paradoxically, annual newspaper spending looks to be emerging from a protracted downturn. From a high of BT15.13bn ($482.65m) in 2005, spending sank to BT11.95bn ($381.21m) in 2009, but staged a dramatic recovery in 2010, reaching BT16.97bn ($541.34m), according to a global survey conducted by GroupM called “This Year Next Year”, which also anticipates spending to plateau in 2012 to around BT17bn ($542.3m).
However, newspaper executives see this comeback less as a return to print, but as part of a rising tide borne of TV advertising spend. The floods in 2011 also hit print publishers hard. Senior Thai publishers speaking with OBG revealed a 5-6% drop in circulation following disruptions to individual printing press operations and, significantly, Thai Rath’s upcountry distribution network on which almost all other papers rely.
Furthermore, rising printing costs have forced some publishers to cut the size of their newspapers. For example, Thai Rath is running a reduced 32-page paper. “Thai newsprint prices have risen around 20% per tonne in the past two years thanks to increased demand from India and China, alongside elevated global shipping prices, which have hit publishers’ bottom lines,” said Matt Milotich of Pressroom Paper. “But demand has stayed fairly constant among the top print buyers.”
E-NEWS: While new digital media outlets have certainly precipitated a change in market dynamics, newspaper executives say its influence is overstated. “The advent of apps has extended publishers’ digital frameworks, but has not made a major dent in circulation, particularly given that their application in Thailand is limited today,” said David Armstrong, the former president and chief operating officer of Post Publishing. Detailing Bangkok Post’s digital expansions, Supakorn Vejjajiva, Post Publishing’s current president, told OBG, “We are doing it as a service to customers rather than to gain significant revenue.”
Revamped websites, including a Thai version of the Bangkok Post, smartphone apps and subscription-only e-papers have all hit the market in the past two years, yet TV remains the industry’s evolving profit centre. Among rising competition, The Nation, Bangkok Post and Daily News have all launched FTV cable channels in the past 12 months, and others are set to follow.
The expanding domination of TV in the past five years has also seen publishers grappling with excess print capacities. The introduction of free tabloids, spearheaded by The Nation’s short-lived English-language Daily Xpress in 2008, was seen, partially, as a response to this. The Bangkok Post’s Thai-language M2F was subsequently launched in October 2011, with an audited distribution of over 400,000.
AUDIT: At the same time, verifying readership claims is difficult. Nationally, the Bangkok Post is the only newspaper with an independent ABC-audited distribution. In December 2011 the paper had a distribution of 41,614. Uncertainty surrounding circulation numbers drags down advertising spend, especially in magazines. Figures from GroupM show just a BT400m ($12.76m) increase in magazine advertising between 2004 and 2011. This is partly owed to low penetration – consumption was just 11% in 2011, and the lead title TV Pool accounts for just 3% of the market share. Still, it is not unknown for the local editors of international titles to claim circulation in excess of their US-parent.
In a bid to increase revenue, magazines are now joining advertisers and media agencies in demanding for audited circulation figures. Though magazines appear to have a genuinely high rate of readership, transparency in the industry remains some years distant, and the most successful titles are kept afloat by income generated from events and shows.
OUTLOOK: Thailand’s media sector is expected to remain dominated by lifestyle and entertainment genres for the foreseeable future. Print media is declining, but growing digital trends are not solely to blame. Digital and online content is on the up and is strongly influenced by the rising uptake of smartphones and tablets, yet the sector’s main battleground remains focused on audience numbers for FTV television, as well as for cable and satellite. This has resulted in an expanding introduction of international formats, which has helped the country to leverage a rising share of the commercial and non-fiction programme production industry.
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