Investor Relations

Company's Business

Business Overview

The Group operates its business under the philosophy to work creatively in complete range with global quality contents and embrace up-to-dated technology to deliver unlimited happiness conform to customer’s changing behavior in media market. The Group divides its business into 2 main categories as follows:/p>

  1. Core Business consisting of
    • Music business comprises sale and distribution of physical products, Digital content, Copyright management, show business, and artist management
    • Digital Terrestrial TV (Digital TV) Business comprises 2 channels; GMM 25 under standard definition and ONE 31 Channel under high definition
  2. Other Business which supports and extends the main business, for sustainable growth of the Group over the long term, consisting of
    • Radio Business
    • Movie Business
    • Home Shopping Business
    • Satellite TV Business

The details of each business as follows:

Core Business

1.1 Music Business

Music business operates under the “Total Music Business” model, including artist selection, music production, marketing, music content management, and product distribution in terms of physical products and digital products, focusing on variety of music production to satisfy the customer demand.  The Group has more than 300 artists, singers, actors, and actresses under management, and more than 40,000 songs in its music library. Music Business can be arranged into 5 sub business as follows:

  • Physical Products and Distribution Business

    In 2016, the Group released string and country songs approximately 334 singles and 466 albums covering every consumer target groups, namely pop, rock, alternative, country (songs for life), R&B, soul, and compilation of top hits during the year. Sales and distribution is carried out through modern trade channels (superstores and discount stores), traditional trade channels (wholesalers and retailers) throughout the country, and also opened booths at trade shows and shopping malls along with e-commerce and call center.

  • Digital Content Business

    Fast developing technology together with the changing of consumer’s behavior caused the music business to develop new channels of distributing the product to respond to consumer’s behavior and generate more revenue to the Group. Digital content business is to convert music content into a digital form for distribution to mobile telephone networks, the internet and entrepreneurs, with categories of download services, such as ringtone, ring-back tone, full song and full MV, in both a la carte and subscription services through channel application 123GMM on both iOS and android, website www.gmember.com and iTunes Store. Also included are the services for listening music on the internet without the needs to download “Music Streaming” through an application on computers and mobile phones which enable customers to enjoy the hot music tracks worldwide. Consumers can listen to play on demand tracks online, listen from playlists or download and save for listening offline. In addition, the Group content exposure has been expanded via GMM Grammy Official Account on YouTube with rapidly growing numbers of channels, subscribers and revenue sharing.
  • Copyright Management Business

    Copyright Management Business The Company manages and collects copyrights fees from food operators, restaurants, radio operators, karaoke outlets, and karaoke booths and other operators who use the Company’s music for commercial purposes.
  • Showbiz Business

    In 2016, the Group organized 17 large-scale concerts, including Ruam Wong THONGCHAI Concert, Green Concert: The Lost Love Songs, 30 Years of Asanee & Wasan Concert, Bie Sukrit 10 Years of Love Concert, Pack4 Turn Back Concert, and White Haus Concert, as well as grand music festivals including Nung Lenn Festival; while all concert line-ups in the last quarter of 2016 was cancelled to pay respect during the king’s national mourning period. Besides generating revenues from the sale of tickets and sponsorship, this business also generates additional revenues from the sale of media recordings of concert as well.

  • Artist Management Business

    The Company has a policy to train and develop both Music and Non-music artists to enhance their capabilities in singing, acting, staging and dancing. In addition, it also tries to expand revenue channels for those artists in the forms of live performance in pubs and bars, as well as employment opportunities as product presenters under the Idol Business Model in order to extend the revenue stream.

Industry Outlook

Advances in technology that lead to changes in consumer listening behavior represent a major challenge to the music business. Being able to adapt quickly to all types of changes in consumer behavior is an important factor to succeed in the business.The Group has seen customer expansion in Digital Music market and attempted to penetrate this segment together with finding a strong partner in order to strengthen the company. In addition, it also developed services that are more up-to-date, especially by providing digital or internet music services. This includes the partnership with mobile phone service providers to provide a music streaming service through an application that allows customers to listen to local and international songs. From a good response, the group decided to join hands with key partners to provide music streaming service through more applications, including JooX, Line Music, and Apple Music. It was predicted that the popularity of listening to online music and mobile platform will continuously grow following high speed internet that stimulates an enlargement of music streaming market which could further generate revenue from advertising and sponsors.  More music contents are planned to fulfill the services in digital form through the iTunes Store and telecom operators, and a YouTube service from which the Company earns income through a share of advertising revenues and the number of viewers. In addition, the Company has an auditorium, Muang Thai GMM Live House, on the 8th floor, Central World to host shows, events and medium-sized concerts, which supports the Show Biz business and also brings in additional revenue for the music businesses.

1.2 Digital Terrestrial TV Business (Digital TV Business)

The Office of the National Broadcasting and Telecommunications Commission (NBTC) held an auction of 24 licences for commercial digital TV frequencies from December 26-27, 2013, separating the channels into 4 categories: 3 channels for children's and family programming, 7 news channels, 7 variety standard definition channels, and 7 variety high definition channels. The Company bid for and won 2 licences

Industry Outlook

The overall advertising expenditure in all media decreased from 122,175 million baht in 2015 to 107,896 million baht in 2016, a decline by 11.69% Y-o-Y due to an economic recession and deteriorated consumer purchasing power especially in the rural area. The highest growth in media spending throughout this year belonged to the internet with a surge of 63.86 percent Y-o-Y, followed by Out of home media, Transit media, In-Store media and Cinema Ads. On the other hand, major advertising spending on Satellite TV, Cable TV, Publishing and Analog TV continued to decrease by 42.28, 31.37, 20.12 and 17.92 respectively. While advertising spending on Radio and Digital TV slightly decreased by 7.28 and 2.57 respectively.

Media Market Share of Advertising Expenditures in 2016
Total Advertising Expenditures in 2016 amounted to 107,896 million Baht

Source: AGB Nielsen Media Research (Thailand) Ltd.

Value of Various Media Advertising Expenditures (Million Baht)

Source: AGB Nielsen Media Research (Thailand) Ltd.

Moving forward to the third year of digital TV commencement, industry outlook trended more positive from greater publicity and strong competition among digital TV operators aiming to firmly position the channels with unique selling points, with quality content creation under variety of entertainment format presented to the mass audience nationwide, leading not only to growing viewership but also higher advertising spending on new digital TV channels.

Overall competitive situation in digital TV industry for 2017 is likely to become more intense, especially among the top five operators covering both free TV and new digital TV channels, with higher investment in contents following a positive trend in media advertising spending rebounded since December 2016 after a record low during October-November. The general economy and consumer purchasing power are also expected to improve from last year, resulting in brands and customers resumed marketing and advertising spending. Indeed major developments in the nation throughout the year; namely the upcoming general election and the launch of multi-screen rating, altogether unveiling and bustling the digital TV landscape further.

The overall transition progress towards digital TV has made a significant inroad this year, with growing Thai audiences reaching the digital TV as evident from higher viewership at 53.2% surpassing the incumbent free TV channels at the end of year 2016. (Source: NBTC). The NBTC has increased digital TV public relations, including roadshows to provide an understanding on digital TV antenna, signal tuning and installation. As of 2016, a total of 13.57 million subsidy coupons had been distributed, with 8.78 million coupons or 64.69% were redeemed. In 2017, the NBTC kicked off the second phase for distributing a new lot of 3.98 million digital TV subsidy coupons during January-March under the e-coupon system, given coupon holders the choice to redeem digital TV set-top boxes or get a discount to buy hybrid set-top boxes or TVs that can receive digital TV signals by simply using the citizen ID card that links to the Department of Provincial Administration database. In terms of the digital TV network expansion, so far the coverage achieved 91.7% of the country and expected to reach 95% within November 2017. (Source: NBTC) Besides the government economic stimulus through fiscal and monetary policies, along with public sentiment that relieved much of the   pressure, there are additional upsides to digital TV industry in 2017 from the chief of the National Council for Peace and Order (NCPO), who exercised Section 44 of the interim constitution to relieve the payment burden for digital TV operators. Also, the NBTC and the broadcasting development research fund administrative committee would subsidize the satellite uplink costs for all digital TV stations under the must carry rules instead of letting the stations pay the amount themselves.

The Company has set the following strategic plan to create distinctive characteristics and promote the digital TV channels to make them widely known:

Focus on content that is outstanding, interesting and has variety since viewers select program based on content. Interesting programming will create an impression on viewers and make them remember the channel. The Company will create and develop high quality content in the form of drama, news, variety and game shows that offers a new choice for the audience.

Create wider audience awareness of digital TV under GMM 25 and One 31 Channel. The Company is planning promotion through a variety of channels such as large advertising boards, online media, printed media and promotional activities at various locations and competitions, as well as running a campaign and participating in cross-marketing activities with partners to expand digital TV audience base by engaging partnership clientele.

The Company has set the following strategic plan to create distinctive characteristics and promote the digital TV channels to make them widely known:

Focus on content that is outstanding, interesting and has variety since viewers select program based on content. Interesting programming will create an impression on viewers and make them remember the channel. The Company will create and develop high quality content in the form of drama, news, variety and game shows that offers a new choice for the audience.

Create wider audience awareness of digital TV under GMM 25 and One Channel. The Company is planning promotion through a variety of channels such as large advertising boards, online media, printed media and promotional activities at various locations and competitions.

The Company intends to establish both digital TV channels as leaders in Thai digital TV industry that is strong and has high quality.

2. Other Business

2.1 Radio Business

Production of contents or programs to be broadcasted through radio stations requires the frequencies that have to bid from various state enterprises. In 2016, the Company has 3 radio stations, each station has strong features and differentiated format to cover target customers.

There are 506 radio stations in Thailand; 313 stations broadcast on the FM band and 193 stations on the AM band. Seventy six radio stations are located in Bangkok. (Source: The National Telecommunications Commission) All radio frequencies are owned by state enterprises, and managed and arranged by the NBTC in order to create a level playing field and allow public sector to take part. Private radio station operators have to work with state enterprises who own the frequencies in the forms of concessions, joint production or time rent, etc, considering contributions to the frequency owner, format of programs, and financial status of the operators. In late December 2016, NCPO exercised power under article 44 of the interim constitution grants authority to NBTC to revoke the licenses from state agency within 5 years instead of the old one which NBTC has to revoke the licenses in April 2017 in order to promote broadcasting and allow radio operators to have more time to prepare for this situation, in effect, radio station owners can continue to hold the licenses for the next 5 years, while NBTC is preparing for the master frequency plan according to the roadmap that would benefit to the entire industry and listeners.

Industry Outlook

In 2016, advertising expenditure for radio was 5,262 million baht, decreasing by 413 million baht from last year, or approximately 7.28%, with a 4.88% market share of total advertising expenditure.

Advertisement Expense on Radio (Million Baht)

Source: AGB Nielsen Media Research (Thailand) Ltd.

At present, radio is considered one of the mainstream medias  to reach a wide group of consumers at reasonable costs while efficiently interacting with listeners on a real-time basis, which partly explained why expenditure on radio advertising remained fairly steady for several years. Radio business has gone through continuous development though, in 2016 radio media faced a depression in line with the recession of all traditional media. Some radio stations no longer carried on the business, while the remaining stations actively adapting itself in order to attract listeners and maintain customer base, resulting in prevailing higher competition. Amidst the economic slowdown leading to lower advertising spending, together with changing consumer behavior, radio operators need to have proper strategy to maximize the access channel to the station and gain more attention, for instance, expanding the platform through online channels such as computer, smart phone applications, and social media. In addition, the radio operators should continuously develop format and content to be up-to-date, innovative, and distinctive together with developing the marketing plan such as creating ongoing activities like artist meet-and-greets and mini concerts to build relationships with customers and listeners. Indeed, regular development of staffs and DJs to cope up with changes and adaptive to market situations are an important factor in maintaining long-term competitiveness.

2.2 Movie Business

In 2016, Movie Business of the Company operated under GDH 559 Co., Ltd., a subsidiary of the Company, with a total of two films released this year ”Fanday” and “A Gift”. The company aims to continue releasing 3-4 high quality films a year. GDH intended to capitalize on its unique capability to produce variety of films and highest quality contents for the country. It is well-equipped in terms of production and personnel, comprising highly-skilled teams to create outstanding films that bring about differentiation and happiness for movie watchers.

Industry Outlook

In 2016, the movie business was rather dull due to the economic slowdown, the growth of online media and confrontation with main competitors from foreign films with high production format. Major challenges for film producers nowadays are gauging consumer behavior and social media trends as people turned to consume online media through YouTube and Facebook, along with so many entertaining video clips posted and shared via the internet. In 2016, industry earnings (box office only) were approximately 4,500 million Baht; of which foreign international movie took more than 85% of the share.  The number of Thai movies also decreased from 2015; only 42 Thai movies were released in 2016, and total revenue earned by Thai movies was not good. During the year, small production houses were gradually shut down due to economic reasons, while there were also some new production houses uprising. To survive, some companies had to share investment with international production houses, since the shrinking revenue did not pay off the costly production.  In fact, the movie business is a high-risk business because of high investment required. One movie requires a combined investment for production and promotion of 50 -70 million baht. Production time is relatively long, taking approximately 8 – 18 months from script to release in theaters, while the degree of a film’s success depends on the popular trends with the audience, which cannot be predicted in advance. Moreover, international films receive more popularity than Thai films due mainly to a better screenplay and advanced technology of production.

For 2017, it is expected that there will be more films in cinemas. Some of them were formerly postponed from last year. In general, major  production houses viewed the market  was trending better than last year, so more of new films are planned to release all year round. There are several internal and external factors that contribute to the success of Thai movies, including:

  • Stories and scripts must be fresh and remarkable. Thorough research is needed to produce each story. The screenwriter must use writing skills and possess knowledge of the movie language and conversational language in order that the message is clearly conveyed to the target audience.
  • Branding: Film producers and studios must ensure moviegoers of their quality in any movies they produce, and that their movies always receive great receptions and are successful.
  • Analyses are needed in order to truly understand target customers, determine the movie genre, and prepare proper scripts, actors and actresses, and the right public relations plans. These will help meeting demands of target customers.

GDH 559 Co. Ltd. pledges to apply appropriate operating strategies so as to produce the works that will impress the audiences and gradually increase its popularity.

2.3 Home Shopping Business

Home shopping business is a business of 24-hour distribution of goods through program channel “O-Shopping”, where customers can choose products, even from their own residence. The business is managed by GMM CJ O Shopping Co., Ltd., a joint venture company of GMM Grammy Pcl and CJ O Shopping Co., Ltd., a leading home shopping operator in South Korea with international footprints in many countries including Thailand. With high market potential and business expertise of CJO shopping from South Korea, the Company aims to become the leader of Thailand’s home shopping business by creating a phenomenon of interactive home shopping programs that are superior, fresh, novel and unique, offering knowledge about products in a straight manner in all aspects, called Shopfortainment Channel (shopping, information, and entertainment), creating a family entertainment as well as a new alternative for shopping. The company focuses on variety of product selections with high quality standard, well-known and widely accepted by customers, as well as free-of-charge and fast delivery service all over the country. The company also provided multiple payment options as may be deemed appropriate by the customer, such as credit card or cash on delivery.

Industry Outlook

In 2016, home shopping market overview has a total market value of approximately 12 billion Baht, with the industry sales growth affected by domestic factors including depressed  purchasing power and advertising suspension for 30 days. However, the home shopping industry obviously posts a strong growth potential, as evident from leading developed countries such as Japan and Korea which had total home shopping market values more than 100 billion Baht a year, while Thailand is in the introductory stage with a market value of merely 10 billion Baht. Nevertheless, the industry outlook is continually growing as operators are investing heavily to compete, hence stimulating the entire home shopping business to grow on average at 20% per annum. In 2017, the upward trend is expected to continue with rising competition, while O-shopping plans to secure the current customer base and expanding new customers especially thorough online sales which are growing in importance. The company is well aware of these factors and has prepared to confront the rivals in order to retain sustainable growth as follows:

  • Creating interesting and reliable television content that is presented in formats that are easy to understand and induce consumers to purchase goods;
  • Building confidence in the purchase of goods and services, including providing services as advertised, guaranteeing product quality, efficient delivery systems and secure payment systems;
  • Increasing variety of goods and emphasizing on trendy products such as fashion goods, lifestyle goods and E-commerce goods offered to meet demand from consumers of all groups. It targets to increase number of goods from 600 items at present to more than 1,000 items.
  • Developing online, internet sales channels and application on smart phone and social media.
  • Tuning brand communication to create customers’ awareness that O shopping will be household assistant alike “A Trust Neighborhood” and building a relationship with Thai society via many public projects, for example, O Hug doing good deeds for the king, O Taekwondo, and Bike for Love, United Force for the Nation.

2.4 Satellite TV Business

Satellite TV business can be divided into 2 main components.

  1. "GMM Z" Satellite TV Platform" launched in March 2012 and is responsible for the sale of satellite TV set-top-box (STB) to consumers. GMM Z has a variety of products for the target audience of all levels.
    • GMM Z HD Slim – the new model, enabling high definition transmission with Full HD 1080P, multiplicative function, high technology and smart remote control,  well-organize groups of channels for ease of use.
    • GMM Z HD Lite the  model enabling high definition transmission with digital TV compatibility for customers who want to watch a high definition in an affordable price.
    • GMM Z Smart for middle-level customer group, available for both C-Band and KU-Band satellite systems.
    • GMM Z Mini for customers who have limited budgets but want to switch from antenna to satellite television.
    • GMM Z Mini Gold is a new product with gold color façade and handy remote control.
    • GMM Z ZEASON is the digital TV DVB-T2 set top box that enabling high definition Full HD, with a USB Port for watching movies and listening to music, embedded press buttons on cover, PVR system compatible, auto record your favorite contents, Biss Key, no more black screen problem, timeshift system enabling on-and-off broadcasting demand.
    • GMM Z STREAM is the internet protocal TV box with Android 5.1 operating system providing Ultra HD 4K and support Air Mouse Remote.
    • GMM Z HD WISE is the new model enabling high definition Full HD with PVR system, Time Shift system, and multiplicative media playing function.
    • GMM Z Music Box is the new portable jukebox products,  offering about 3,200 popular tracks from GMM Grammy artists, both country and folk songs with genuine copyrights all in one.

  2. Satellite TV Mediais the production of TV shows to be aired on satellite TV channels. Compared to the past, this business requires relatively low investments due to good domestic and international coverage of satellite signal, mitigating the need to install additional receiving towers. All it needs to operate this business are television channel licenses and good contents for broadcasting.

    By the end of 2016, the Group has produced free-to-air television programs for audiences of every platforms transmitted via Thai-Com altogether 2 channels as follows;

    * The channel is jointly-owned (50% each) with the Stock Exchange of Thailand, through the Group’s subsidiary, Family Know-How Co. Ltd.

Industry Outlook

The satellite and cable TV business remains the television medium that has the greatest number of viewers in the country. In 2016, the satellite and cable TV viewers accounted for approximately 61% of total 23 million households in the country (source: AGB Nielsen Media Research (Thailand)). Product owners and advertising agencies are therefore interested in the satellite and cable medium as an efficient method to reach their target groups. However, the satellite and cable TV platform has been severely affected from rising competition since the emergence of digital TV channels, coupled with NBTC regulated advertising airtime no longer than 6 minutes per hour, while the economic recession and advertising spending slow down persisted. These factors caused some of the satellite TV ventures to go out of businesses. Nowadays, there remains only 400 channels leftover from  700 channels previously. Operators have to be quickly adapted to low advertising rates which are now being pressured even further. The intensity of competition for ratings and advertising in satellite and cable TV business has multiplied accordingly. For the Group, the satellite television business has an important role in supporting the public relations of the other businesses such as the music businesses, giving them greater exposure across the country.