Page 66 - Annual Report 2015 - Mono Technology Public Company Limited

Risk Factors
Operating business based on risk management policy, the Company manages, monitors and controls risks at the acceptable level under supervision of Risk Management Committee regularly reporting to the Board. Risk factors for the Company include:
1. Risk from content sourcing for digital TV business
Digital TV business is regarded as an intensified arena. Formerly, there were six TV channels in analog system. After entering into digital TV era, audiences can have more choices as there are 24 TV channels available. Then, service providers have to seek and produce entertainment content and TV programs for satisfying audiences because the higher number of audiences will lead to an increase of advertising fees. As a result, the Company has to buy quality contents from Thai and foreign producers to support its marketing position of “Best Free TV Presenting Greatest Hit Films and Series.” That is to say, the Company has to compete with both existing TV and film industries. Nevertheless, the Company may face with change in prices and content may not be popular as projected.
However, the company has regularly assessed the investment worthiness and risks. Content management for enhancing business efficiency is the Company’s top priority. One of efforts is allocating contents via the Company’s existing channels for reducing cost.
2. Risk from operating performance mainly depending on advertising industry
Media business typically depends on advertising fees, thus regarded as a key income of the Group. Its operating performance is partially defined by the advertising market that is always affected by economic conditions. The advertising budget will grow if economy expands. On the other hands, the advertising market will be sluggish when economic downturn. Although TV dominates the largest advertising market share, advertising budget for digital TV markets is quite low as most budget goes to analog channels which is the former players.
In addition, social media can now replace conventional advertising which certainly affect the company business.
Despite stagnation of advertising market in the previous yearfromeconomicconditions,advertisingmarketisexpected to grow further due to the competition of other media. In addition, advertising fees for digital TV is quite low and digital TV channels offers a wide range of advertising fees, thus attracting entrepreneurs. The Company is confident in its competitiveness because we continue to improve content quality and develop many new modern and various platforms.
3. Risk from delay transition of digital TV business and regulatory changes
We are entered into digital TV business for the second year. Many factors affect business growth, particularly the delay in digital TV supervision policy, including PR scheme for audiences nationwide, channel number arrangement and rating criteria. Therefore, Mono Group has to increase budget and seek partners to promote digital TV channels by joining hands with government sector.
However, the Company complies with regulations and discuss with government sector to find out resolution for digital TV channel operation. Thus, we are confident that we can be a part to drive the digital TV business growth.
4. Risk from changes in customer behaviors
Change in consumer behaviors is in line with digital technology development that can better respond to all needs of customers. State-of-the-art communication devices and ability to access internet at lower price, with ease as well as popularity of social media help shape new consumer behaviors. Audiences have more choices to enjoy entertainment content and prefer watching entertainment data
66
Mono Technology Public Company Limited