Spring News Channel 19 plans to reposition itself in infotainment and TV news following being acquired by MAI-listed TV Direct Plc (TVD), a leading home shopping operator.
The company expects sales revenue from home and TV shopping to increase by 16% to 4.5 billion baht in 2019, said Songpol Shanmatkit, TVD's chief executive.
TVD announced on Friday it was taking over Spring News Channel with a deal that should come into effect by this year-end.
Under the deal, Spring News Corporation will sell a 90.1% stake of its subsidiary Spring Television to TVD for 1.08 billion baht. The deal costs 949 million baht, with the remaining 131 million baht allocated for paying Spring News Corporation to produce news content for TV Direct.
Sales revenue through Spring News Channel is expected to be 10% and 15% of total company sales in 2019 and 2020, respectively.
Meanwhile, Spring News 19 will be renamed in January next year to better reflect its new organisational management and core focus on TV and home shopping, rather than news reports.
Mr Songpol said the deal creates a new revenue source, streamlining a traditional advertising resource and creating an omni-resource of revenue for the long term.
Despite a new shareholding structure, Spring News 19 will be run under the same juristic person as Spring News TV, which holds a licence from the National Broadcasting and Telecommunications Commission (NBTC).
He said Spring News Corporation is pushing to be renamed as it needs to be an independent content provider to produce news content for others.
The new name may be TVD 19, but it has to be discussed with the TVD board.
Mr Songpol said the deal should not face any obstacles as it has already been approved in principle by related agencies, including the NBTC, SET and the Securities Exchange Commission (SEC).
Three key factors that made the deal
Mr Songpol said consumer behaviour, change of TV business and business competition are three major reasons for the acquisition.
Consumer behaviour has moved to virtual shopping, driven by 3G wireless service in the past decade. The deal helps TVD compete at the next level of TV shopping and create new revenue models.
Mr Songpol said the 1-billion-baht deal will see returns because it serves TVD's strategies of creating massive awareness and direct response; boosting omni-channels with online-to-offline and offline-to-online; serving a variety of products in the future, especially tailor-made offers; and building up customer experience.
TVD spent 16 million per month through the existing co-production contract with Spring News Channel 19 since April, which covers broadcasting network fees, airtime fees of TVD's shopping programmes, expenditure for ratings and universal service obligation.
TVD spent 1 billion baht for the right of entire operational management of Channel 19 for the remaining 124 months of the licence lifetime.
