Complete media value chain gives edge to MCOT in broadcasting sector

MCOT Plc is the state-majority-owned media group that owns and operates a number of radio and TV stations. President Sivaporn Chomsuwan discusses the company’s strategy and outlook.
Please explain MCOT’s business model.
MCOT is a fully integrated media company involved in TV, radio, new media and concessions. More than half our business today is TV, with our two channels MCOT Family and MCOT HD. In the radio business, we have 62 stations and are the market leader in each of our target markets. With new media we have increased our exposure in digital media, and with concessions we rent out our frequency to other channel operators.

Mr Sivaporn sees a challenging time with more TV channels and less ad spending.

MCOT has experienced a decline in ratings in the past 12 months. What are the company’s plans to improve in this area?
The ratings have declined for our two digital TV channels, partly because we are adjusting to the structural change in the industry. In the past, we relied on third-party content providers to supply variety and game shows while we developed our own news programmes. Now we are required to develop additional programmes on our own and reach agreements with other third-party content providers as well. Since mid-2014, we have been developing our own programmes using the content that we have today, which is unparalleled in Thailand from a news standpoint. We have also been creating new programmes and rescheduling existing ones to fit audience behaviour. As a result, we have seen our ratings stabilise and hope to improve further. We have to balance education and entertainment and continue to be the channel that people can rely on. Internally we need to improve synergy between radio and TV where the content from both media, along with our key presenters, can be used interchangeably. This is a cross-media strategy involving content, advertising and promotion.

What impact will the digital TV industry have on your industry and business?
In the long term, the move to digital TV is positive for the industry and consumers, but in the short term there are several issues. Currently the market is highly competitive, as players are launching new programmes monthly, and thus ratings are changing on a monthly basis. It is a challenging environment, as the number of channels has increased to 24 from six whereas total TV advertising expenditure decreased last year by 8% even as the number of programming minutes per day increased fivefold. Also, the network is not fully operational, so this must be rectified if the digital TV industry is to succeed. As a result, each channel owner is hoping the regulator will allow us to extend the concession period to 20 years from 15 and delay the second payment, which will allow demand and supply in the industry to stabilise.

What differentiates MCOT from its competitors?
There are multiple factors. First and foremost is our position is clear: we are about education and entertainment. Second, we have the entire value chain in the broadcasting industry from the network to radio and TV to content.

What are the biggest risks facing your business?
All channel owners have to worry about content creation today. In the past we could rely on content producers, but now that they have their own channels, we’re all relying on ourselves or other private producers. Everyone is approaching the latter, and this results in a higher cost. Content is still key, it brings in the audience, ratings, sponsors and thus revenue for us. The behaviour of the audience is also changing to a multiple-screen environment, which requires us to develop more digital content.

What impact will the Asean Economic Community (AEC) have on your business?The AEC gives us the opportunity to create content that can explain what the AEC is and the impact it may have. Our subsidiary Panorama Worldwide is one of the best documentary production houses in Thailand and supplies clients abroad with news content on Thailand and the region. We’ll focus on creating content that talks about the AEC and its impact, plus create activities that include interviewing ambassadors and investment.

Where do you see MCOT in five years?
We’ll continue to be a broadcasting leader, expand our digital business and use our existing assets more efficiently. We hope Thais will recognise MCOT as one of the best channels to listen to and watch and rely on our quality, neutrality and accurate and fair content.

Source: Bangkok Post