Backchannelmedia

Bangkok Post

By Woranuj Maneerungsee, Bangkok Post, Thailand

Mar. 7--The cabinet's decision yesterday to close the 12-year-old iTV television station has eliminated the confidence of advertisers and media buyers in the troubled broadcaster's future.

The station was forced to stop broadcasting at midnight, even though the government had said earlier that it would not close the station.

iTV failed to pay back debts reaching 100 billion baht to the PM's Office by yesterday's deadline.

At the same time, iTV's concession is likely to be terminated. The PM's Office said yesterday that it was eager to order the Public Relations Department to run the station. But it asked the Council of State to rule on whether the department can legally manage the station. It may breach the Frequency Act.

Earlier, the PM's Office floated a proposal to have the privatised MCOT Plc, the operator of Channel 9, to operate iTV. It has not explained clearly why it gave up on the plan.

In the short term, advertisers and media buyers have to cancel all ads booked in March for iTV and review media planning for television over next month. They said it would be difficult for them to book commercials on other channels, particularly prime-time slots since they were fully booked in advance already.

Even if the station resumes broadcasting next month under a new brand, advertisers were reluctant to plan ad spending. They were unsure what would be the government's proper policy on the station.

Witawat Jayapani, president of the Advertising Association of Thailand, said the television advertising market would revert to the period before iTV's inception. The market then was dominated by channels 3 and 7, which were able to increase ad fees considerably.

"Both stations will get a windfall. About 20 percent of the ad spending in the TV media market will go to Channel 3 and Channel 7," he said, adding that currently the two stations accounted for about 60 percent of all TV commercial spending.

BEC World Plc's Channel 3 has said that it may raise ad fees during prime-time slots by October due to high demand from advertisers.

Mr Witawat and Wannee Ruttanaphon, chairwoman of the media agency Initiative Co, were sceptical about state-run Channel 11's ability to run the station.

"I wonder if Channel 11 will be able to run iTV commercially and successfully. Its current performance can tell," she said, adding it was a pity that the 12-year-old iTV had to close down despite the fact that it was earning higher ratings and had established its brand.

"But I would say, if Khun Mingkwan (Saengsuwan) was the head of the station, that would be another story," she said. "His reputation from modernising Channel 9 is still intact."

Another analyst blamed the government for yet another policy flip-flop. "The prime minister (Surayud Chulanont) once insisted that it would let iTV operate smoothly. But his word was taken back in the last minute," he said.

He said that Shin Corp, the parent company of iTV, would not be severely hurt by the closure because iTV was a small part of its holdings. Instead, the move may improve the relationship between the Thai government and the Singapore state investor Temasek Holdings, which controls Shin.

"The most suffering is for the hundreds of staff of iTV," he said.

Shares of ITV have been suspended by the Stock Exchange of Thailand since Feb 27, when they last traded at 1.05 baht each. Analysts said the value of the stock is now essentially zero.

The company posted a 2006 loss of 1.78 billion baht, compared with a profit of 679.1 million the year before, due to concession fees last year increasing to 2.5 billion baht from 230 million in 2005.

-----

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2007, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Business News.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.