|
 
|
|
 
|
|
 
|
|
 
|
|
 
|
|
 
|
|
|
|
AD expendIture growth should be sustaIned next year: phatra
The growth momentum in advertising expenditure (ADEX) is likely to continue in 2011, while in the long term, free-to-air TV will face tougher competition from the rapidly growing satellite TV and cable TV industries, according to Phatra Securities.
However, even with competition from satellite and cable TV operators, the brokerage house does not expect a decline in free-to-air ADEX in the next 4-5 years, only decelerating growth.
The brokerage house recently arranged a seminar on the advertising industry outlook and the rise of satellite/cable TV with Suphanee Dechaburananon, the chairwoman of GroupM, the largest media buyer in Thailand, and Adisak Limprungpatanakij, the president of Nation Broadcasting Corp (NBC), as key speakers. This report is a summary of key points plus Phatra's analysis of the information and figures given during the seminar.
The message from the seminar underlines its view that ADEX will continue to show strong growth in 2011. In the long term, free-to-air TV will face stiffer competition from the rapidly growing satellite/cable TV industry, probably by 2013 or 2014. However even with the competition from satellite/cable TV, the brokerage house does not expect a decline in free-to-air ADEX in the next 4-5 years, only decelerating growth.
GroupM forecasts 10 per cent growth for TV and cinema ADEX in 2011, following a strong growth in 2010 - 15.8 per cent year on year growth for TV ADEX and 26-per-cent growth for cinema ADEX during the first three quarters of 2010, according to AGB Nielsen Media Research.
Industries that are likely to drive ADEX in 2011 are consumer products, automobile, insurance services, and food supplements.
The cable/satellite TV subscriber base is growing very rapidly. However, with the lack of reliable audience share surveys, ADEX via cable/satellite TV is only Bt1.5 billion to Bt2 billion in 2010, roughly 1.5 per cent of total ADEX.
Phatra viewed that cable/satellite TV is not a threat to free-to-air TV stations in the near term. However, in the long term when cable/satellite TV penetration reaches a certain level, it will start competing for ADEX with free-to-air TV.
Since the government allowed advertising on satellite/cable TV in early 2008, the satellite/cable TV service is growing rapidly. According to a survey done by AGB Nielsen Media Research, the subscriber base of satellite/cable TV has grown by 44 per cent from 6.5 million households in August 2009 to 9.4 million households in August 2010, representing 45 per cent household penetration. The penetration rate is increasing at an accelerating pace, from an increase of one percentage point per month from August 2009 through May 2010 to three percentage points per month during May 2010 through August 2010.
If the penetration continues to increase by one percentage point per month, cable/satellite TV penetration is expected to reach 100 per cent by 2015. If penetration increases by three percentage points a month, the penetration will reach 100 per cent as early as 2012.
The fastest-growing service is free-to-air satellite TV, the subscriber base of which increased by 73 per cent from August 2009 to August 2010.
Cable TV services are provided by TrueVisions and more than 300 local cable operators.
Cable/satellite TV service is gaining momentum both in cities and rural areas. Penetration of the service is 41 per cent in Bangkok, 53 per cent in urban areas (municipal areas of every province) and 40 per cent in rural areas. This implies that in the long term, every free-to-air TV station will face competition from satellite/cable TV.
Adisak of NBC disclosed during the seminar that the number of satellite/TV viewers (measured by AGB Nielsen set top boxes attached to televisions of sample households) is comparable to those of free-to-air TV. However, the majority of the audience still sticks to free-to-air TV during prime time and watches satellite/cable TV only during the non-primetime periods. The brokerage house views that this is because satellite/cable TV still lacks "killer programmes" that can compete with free-to-air primetime programmes.