Thai Production Houses Feel Pinch as Advertisers Take Less Costly Alternatives.

Nov. 9--A difficult operating environment has driven four production houses out of the advertising business, which is worth three billion baht a year, and has forced existing players to undercut fees to survive.

Major companies are competing more fiercely to capture the limited amount of business which seems to be drying up because advertisers have cut budgets and decided to promote their products through marketing events and promotions at points of sale, replacing television commercials.

An advertising agency source did not name the production houses that had closed, but said most production houses now offered a variety of promotions including edit-one-get-one-free campaigns and reduced fees.

Some had moved to produce films, soap operas, documentary programmes and government work. Others had been looking for overseas clients, he said. There are about 30 production houses in the market, compared with 60 before the recession.

A source said he expected that the smaller production houses would close soon as the bigger houses were chasing low-budget clients. At the same time, consumer goods manufacturers had turned to hiring freelancers.

According to Parames Ratchaiboon, the president of the Advertising Association of Thailand (AAT), the number of commercials produced this year will drop sharply. Last year, between 800 and 1,000 commercials were made.

"As far as I know, during October and so far this month, the start of the peak season for sales, only a few commercials have been sent to the Film Board for approval. Clearly, it's a sign of a drop in ...