Bangkok Post (8 Nov 2007)
Ad rates will match top-rated Channel 7
A 7% increase in commercial rates by BEC World Plc has prompted analysts to revise upward their revenue growth targets for next year, which could be another record for the Channel 3 television operator.
Chatchai Thiamtong, the company's vice-president for finance, said the new rate for commercials during prime time (8 to 10:30 pm) would increase by 7% to 450,000 baht per minute in January. The rate will match that charged by Channel 7, the top-rated station.
With the increase, second-ranked Channel 3 will close the rate gap with its larger rival for the first time in four years.
''The increase was a result of high demand and a supply shortage,'' said Mr Chatchai.
Thailand next year will have just four commercial TV stations _ Channels 3, 5, 7 and 9 _ because TITV, formerly known as iTV, is expected to stop carrying advertising under a government plan to make it a public broadcaster.
Mr Chatchai declined to forecast the impact of higher commercial fees on BEC's 2008 revenues. However, an analyst at Phatra Securities recently adjusted the revenue projection to 7.3 billion baht for next year, from 6.97 billion forecast earlier. In addition, Phatra revised up its profit projection for BEC from 2.45 billion to 2.67 billion baht.
An analyst at United Securities agreed, saying next year would be a record year for Channel 3. The same analyst also predicted that overall ad spending on TV would likely increase, partly because of rising rates. Though TV is expensive, advertisers would stick to the medium as the most effective channel.
For the first three quarters of this year, BEC's net profit rose by 31% year-on-year to 1.73 billion baht. Third-quarter profit rose to 605 million baht or 0.31 baht a share, from 427 million (0.21 baht a share)a year earlier. Advertising revenue rose 18% to 1.81 billion baht.
''The third quarter was better than expected,'' said Mr Chatchai. ''Normally, the third quarter is the low season for ad spending due to the rainy season. But [this year] was better because economic and political conditions have been improving since the second quarter.''
He acknowledged that commercial airtime during prime time was close to being fully booked. Consequently, the station would carry on strengthening early prime time (6 to 8.30 pm) and non-prime time programming.
By law, commercials on TV are limited to 12 minutes per hour.
BEC shares closed yesterday on the SET at 24.60 baht, up 80 satang, in trade worth 199.5 million baht.
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