Backchannelmedia

Bangkok Post

By Woranuj Maneerungsee, Bangkok Post, Thailand

Feb. 13--The Grammy Group, the country's largest entertainment conglomerate, plans to expand heavily into the new media business this year, including possible ventures in satellite, cable and broadband television.

Paiboon Damrongchaitham, the founder and chairman of GMM Grammy, said the company was close to finalising several new partnership deals, but declined to offer details.

He denied reports that Grammy was looking at the troubled broadcaster iTV, the television station owned by Shin Corp.

iTV currently faces possible bankruptcy from state fines of up to 100 billion baht for alleged concession violations.

"The project that I'm interested in is quite clear in its licence policy," he said, explaining that Grammy was not interested in entering businesses that involve state concession.

The move into new media and digital entertainment represents a key shift for Grammy, which like other entertainment companies has been heavily affected by music piracy.

Revenues and profits have fallen over the past few years. Its net profit for the nine-month period ending last September was 171.7 million baht on revenues of 4.7 billion, compared with 2005 profits of 203.5 million on revenues of 6.3 billion.

Mr Paiboon said the group was intent on increasing its sales this year to at least six billion baht and profits to 700 million, matching its all-time profit high recorded in 2004, while facilitating the transition from "physical" media to digital entertainment.

Satellite and cable TV would help facilitate contact with consumers and promote the group's music offerings, he said.

Internet penetration has now risen to about 16 million users in Thailand while technology has progressed to the point that online delivery of content is more viable. Over the past few years, Grammy has conducted several studies on the development of digital media channels, including a possible subscriber-based broadband television model.

Mr Paiboon said that Grammy's media arm, GMM Media, was projected to show modest growth this year of 2 percent to 2.9 billion baht in revenues due to political and economic uncertainties.

GMMM reported nine-month profits of 115.4 million baht on revenues of 2.14 billion, compared with 2005 profits of 229.3 million on revenues of 2.74 billion.

"2007 might be worse than [during the 1997 crisis] because everything is so unpredictable. The unfavourable business environment discourages marketing activities," Mr Paiboon said.

He noted that advertising spending across all media was projected to grow by 5 percent this year, compared with the double-digit increases that had been the norm for the past five years or so.

"The sooner the general election occurs, the sooner the economy will recover," Mr Paiboon said.

"If the government moves forward with the general election late in the year, it would benefit the entire industry and we should see a pickup in the fourth quarter."

Shares of GMM Grammy closed yesterday on the Stock Exchange of Thailand at 7.10 baht, down five satang, in trade worth 112,000 baht. Shares of GMMM closed at 8.10 baht, down 10 satang, in trade worth 35,350 baht.

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