Time for digital TV to stand on its own
As the government moves to salvage the ailing digital TV industry, critics are questioning whether it is moral for the state to extend a helping hand to business operators whose only purpose is profitability. The industry is in crisis largely because these companies lacked the foresight and audacity to move with the times. While the market is now overdue for a shake-up, these struggling operators need to come up with viable strategic business plans. Prime Minister Prayut Chan-o-cha recently signalled his support for the National Broadcasting and Telecommunications Commission’s (NBTC) proposal to ease the financial burden on digital TV operators, saying the measure “was out of sympathy for their financial obligations, and would prevent the problem from worsening”.
Digital TV operators hailed General Prayut as a hero, and praised him as a brave soul for proffering insightful comments on the differences between digital TV and other sectors that are yet to be disrupted by technology.
Independent academics covering digital and new media, however, say the government has no business interfering in the digital industry and should leave the operators to find their own way to survive.
Gen Prayut’s support comes after the NBTC threw its weight behind the Association of Digital TV Operators’ proposal to suspend terrestrial digital TV operators’ licence payments for three years, by asking the National Council for Peace and Order (NCPO) by invoking Section 44.
The regulator insisted that providing additional assistance to digital TV operators would not damage the public interest. The NBTC, however, said it would not honour all of the demands.
The association requested additional assistance from the government to eliminate broadcasting networks’ rental fees, due this month, waive licence payments after May 2018, and allow financially distressed operators to exit the business.
Many industry veterans were critical of the design of the 2014 digital TV licence auction, which they saw as flawed both in terms of the number of licenses and types of licences.
The NBTC granted 24 digital TV licences to 17 winning bidders in 2014, for a combined 50.86 billion baht price. The operators have already paid a combined 34 billion baht to the NBTC, or 64% of the combined total cost.
Digital TV operators must find an appropriate way to reform their industry, and they must do it now.
The main failing of the terrestrial digital TV is that there are too many channels. A six-month delay in the NBTC’s distribution of free set-top boxes to viewers, and the impractical capacity of multiplexer networks also did nothing to help the fledgling industry.
Another factor that cannot be ignored is the fast-changing communications technology landscape, including competition from other broadcasting platforms and social media such as YouTube and Facebook, which have had a substantial impact on the digital TV ecosystem.
This wealth of entertainment platforms takes users’ eyes off TV screens and onto mobile phones or computer screens. More and more consumers are shifting their media time away from live TV in favour of services that allow them to watch what they want, when they want. We are also witnessing a mass migration towards original digital video.
It’s undeniable that the digital TV industry plays a vital role in spurring innovation and in the country’s economic growth and employment. However, the industry has encountered stiff competition and it’s time for this crisis to be resolved.
Digital TV operators must find an appropriate way to reform their industry, and they must do it now. They each need to find their niche and reduce costs as much as possible to survive as media spending shrinks and competition becomes fiercer.
Meanwhile, the government can claim that it sympathises, but it has to let the operators fix their own problems. Gen Prayut mentioned that his government would find an “appropriate way” to alleviate the crisis through measures such as the revision of the frequency allocation law and the Broadcasting Act of 2008. These measures must be implemented in order to ensure that the industry is capable of keeping pace with the changing broadcast ecosystem, not as a means to bail out this group of struggling operators.
Operators survive, and even thrive, in other countries without government support. In the United States, operators like AT&T and Comcast make handsome profits, in part by bundling their cable services with internet, phone and digital offerings.
Years of guaranteed revenue has made Thai operators complacent, but now is the time for them to stand on their own. Despite being profit-seeking enterprises, digital TV operators also perform essential public functions, just like newspapers and websites do. They help keep citizens informed of political, social and economic developments. The digital TV operators must realise the importance of their role in contributing to a more informed citizenry and thus come up with innovative strategies and better business plans.