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http://www.nationmultimedia.com/business/Belt-tightening-continues-among-advertisers-30293066.html

MEDIA RESULT

WATCHIRANONT THONGTEP
THE NATION
August 17, 2016 1:00 am

THE BUSINESS performance of the media sector in the second quarter suggests that advertisers were still tightening their belts in the period, particularly in regard to spending via traditional media outlets, while new top-rated digital-TV channels and out-of-home media operators were able to maintain positive growth.

According to the latest data reported by media companies listed on the Stock Exchange of Thailand, the financial results of print-based companies fell in line with the industry trend, particularly among newspaper and magazine publishers.

Though leading print-based media groups had diversified into broadcasting business with the aim of offsetting declining advertising revenue from their core business, their performance was still to show the full benefits of such a move, despite some degree of year-on-year improvement.

After being more aggressive in producing and supplying news programmes and documentary shows to the Voice TV and Channel 7 digital-TV channels, as well as to online platforms, Matichon Group said its financial loss in the quarter had improved from the same period last year.

However, the group reported that its revenue in the first half still suffered a year-on-year decline of 16.41 per cent to Bt545.27 million.

Nation Multimedia Group reported that its revenue from sales and services in the first half had decreased by 21 per cent compared to the same period last year, which it attributed to the domestic economic slowdown affecting its advertising revenue.

Meanwhile, Amarin Printing and Publishing’s revenue in the second quarter saw a 11.54-per-cent drop to Bt391.3 million, while net profit fell 53.71 per cent to Bt171 million.

Post Publishing’s revenue in the same period registered a decline of 15.3 per cent from Bt544.2 million in the second quarter last year, to Bt461 million.

For broadcasting business in the second quarter, some major digital-TV channels revealed that their financial results were better when compared to both the previous three months and the same period last year.

Workpoint Entertainment – the operator of Workpoint TV – posted impressive financial results.

The company reported an 18-per-cent increase in second-quarter revenue to Bt801.7 million, from Bt678.92 million in the same period last year, mainly driven by ad revenue from its digital-TV business.

The leading production house also posted a 31.71-per-cent surge in net profit to Bt133.89 million for the quarter.

The second-quarter performance of Mono Technology – the parent company of Mono 29 digital-TV channel – was also impressive, with year-on year income rising 25.18 per cent to Bt594.23 million.

BEC World – the parent of Channel 3, 3S and 3 Family digital-TV stations – said its advertising revenue from April to June was Bt3.32 billion, 7.4 per cent higher than in the previous quarter as the company had benefited from the high-season for the advertising industry, along with good momentum from its live coverage of the Uefa Euro 2016 football tournament.

Meanwhile, after its Channel 8 had fallen to sixth spot in the digital-TV rankings, RS’s revenue for the second quarter came in at Bt747.5 million, 10.3 per cent lower than in the same period last year, mainly due to a fall in revenue from satellite-TV business, music distribution and show business.

Though its digital-TV business and show-biz operations improved in the first half, GMM Grammy’s second-quarter revenue was still in negative territory, with a year-on-year drop of 18.4 per cent to Bt1.84 billion.

Turning to out-of-home media companies, VGI Global Media posted a 10-per-cent quarter-on-quarter increase in revenue in its first financial quarter from April to June, to Bt551 million – one month after its acquisition of a further stake in Master Ad.

Chief executive officer Surachet Bamrungsuk said the company had also enjoyed a 49-per-cent rise in net profit to Bt313 million compared to the January-March period.

VGI’s growth in the quarter was achieved following an expansion of the firm’s outdoor advertising coverage through an increase in its stake in Master Ad to 37.42 per cent, as well as an increase in the number of office towers covered to 142 from 103 in the previous year, he said.

The number of towers will rise further to 160 by the end of this year.

VGI’s rival, Plan B Media, posted a revenue increase of 8.4 per cent for the second quarter to Bt613.2 million, but there was a different story when it came to the business’s net profit, which fell 15.6 per cent to Bt110.6 million due to a fall in advertising utilisation rates amid higher operating costs.

THE FIRST-quarter financial results reported by media and entertainment firms listed on the Stock Exchange of Thailand, and particularly by advertising-driven companies, appear to be in line with the decline in the ad industry’s fortunes so far this year.

For the first three months, Nielsen Thailand reported that overall advertising expenditure had dropped by 8.58 per cent to Bt26.73 billion from Bt29.24 billion in the same period last year as a result of spending cuts by major companies via mainstream media channels, such as television, radio, newspapers and magazines.

BEC World, the parent company of Channel 3 analogue TV and two digital-TV channels, posted a 20-per-cent drop in revenue to Bt3.26 billion from Bt4.08 billion in the same period last year, suggesting this was by far the lowest point for media firms for many years.

MCOT, a state-owned media enterprise operating Modernine TV, followed the same pattern as its fellow analogue-TV operators, with a year-on-year drop of 20 per cent in revenue to Bt721 million in the first three months.

Although Nielsen found that overall ad expenditure at the country’s digital-TV networks had declined 9.45 per cent in the first quarter, Workpoint Entertainment – the operator of Workpoint TV – was able to achieve 28-per-cent growth, while Channel 8 operator RS saw a 51.1-per-cent increase |and Mono Technology, which runs Mono 29, enjoyed 3.68-per-cent growth.

While GMM Grammy’s digital-TV business from its One 31 and GMM 25 channels saw tremendous growth in terms of ratings and ad revenue, the company’s first-quarter revenue was 35.5 per cent below what it had achieved in the same period last year.

Group chief executive officer Boosaba Daorueng said yesterday that total first-quarter income had come in at Bt1.99 billion.

GMM Grammy made a net loss of Bt144 million in the period, more than 60 per cent better than the loss reported a year ago, she said.

“One 31 is now in the top 5 among all digital-TV channels. After updating the programming earlier this year with quality content such as the dramas ‘Ruen Roi Rak’ and ‘Nang Baap’, and the singing contest ‘Suk Wan Duan Pleng’, the channel’s ratings in the first quarter rocketed by 37 per cent and led to revenue growth [for the channel] of more than 127 per cent, year on year,” she added.

GMM 25, meanwhile, moved into the top 10 in terms of digital-TV rankings, following a positive response to its content variation, the CEO said.

Those bourse-listed companies that are highly involved with printed media faced a similar situation in the first quarter.

Amarin Printing and Publishing posted a revenue drop of 7.6 per cent to Bt371.65 million, while revenue at Nation Multimedia Group (NMG) fell by 12 per cent year on year.

NMG chief executive officer Duangkamol Chotana said recently that in the period ending March 31, the group had achieved Bt681.2 million in overall revenue, below the Bt777.6 million posted in the same quarter last year.

“Our weaker performance was caused by a big slowdown in the economy, which was reflected in a huge decline in our advertising revenue, which dropped 8 per cent in the first quarter. Meanwhile, our sales revenue for printed media and pocket books also dropped, by 23 per cent year on year,” she said.

Brighter news for other segments

Out-of-home media and the film industry appeared to be on the rise during the first quarter.

Plan B Media, a leading out-of-home media company, posted a 34-per-cent year-on-year revenue increase to Bt554 million, while Major Cineplex Group – the country’s largest movie-theatre operator – enjoyed an 11-per-cent rise to Bt1.936 billion.

Vicha Poolvaralux, chairman of the executive committee and CEO of Major Cineplex Group, said the company’s first-quarter revenue was in line with its projection, while full-year revenue was expected to grow by at least 10 per cent, mainly driven by top blockbuster films.