The country's leading music camp Grammy Entertainment and a smaller company House of Fun are taking advantage of the rapid expansion of the Internet use in Thailand to promote and sell their music products through cyberspace channels.
The booming Internet technology is driving both large and small entertainment companies to market their music products on the Internet, which is viewed as a new marketing channel for major music enterprises and a means to compete in the market for smaller companies.
The trend has prompted Grammy Entertainment Plc, which had earlier announced plans to set up an Internet company, to develop a website to sell their music products.
The company plans to spend more than 100 million baht (US$2.49 million) on know-how and technology to materialize the website that will allow music lovers to download their favorite songs.
In addition, the company is negotiating with several banks to jointly provide a payment system that might be based on the use of debit cards.
Visit Tantisunthorn, CEO and president of Grammy, said that if everything goes ahead according to plan, the website service would be launched early next year.
Visit reaffirmed that the music downloading program would not affect the business of Grammy's traditional distributor and subsidiary, MGA Co, and the use of the Internet channel was meant to become only a value-added service and a cost-saving tool.
"Initially, the music for downloading will be limited to old popular songs or hit collections, not new releases. We have around 7,000 such songs in our stock. Thereby it is unlikely that our distributor will be hurt by the service," said Visit.
In the near future, Grammy will position an online music kiosk at several well-known online tape cassette vendors for song lovers to download the music from these sites. However the kiosk will offer only a few songs to stimulate the demand for tape records.
Visit added that Grammy was studying copyright and taxation laws, important for running the service without creating legal problems.
"If the service works out well, in the future we will make a full step to e-commerce by selling tape cassettes of our famous singers on the website as well," said Visit.
Apart from offering music for downloading, the website will also provide other content, including educational content, and aiming at the creation of a leading community website in Thailand.
To fulfill the plan, Grammy has earlier acquired a 51-percent stake in Nava Holding Ltd, a language school operator, and set up a music school operator, Meefah Co Ltd, which is wholly owned by the company.
While Grammy's website for music downloading is still in the process of development, a small music company, House of Fun, is one step ahead of its giant rival.
Salinee Panyarachun, managing director of House of Fun, said that the company had launched its website two months ago as a channel to promote the creative works of their artists.
The website is also used as the means to save the cost of marketing and to counter the domination of bigger music companies. However, she added that at this stage the website could not yet provide music downloading services to customers.
"The company will have to spend at least 2 to 5 million baht (US$49,727 to $124,316), promoting just one artist by the conventional means. The amount is hardly affordable for us. Thereby we have to move to the Internet channel to save on the business costs," said Salinee.
She added that Internet technology would help her company to compete even with a giant music enterprise on equal terms. The new service is in line with the lifestyle of teenagers, her company's major market.
With the limited budget, House of Fun is dependent on a telecom firm, Samart Corporation Plc, in website development. Samart also posts the website's link on its own homepage.
Last month Sony Music Entertainment (Japan) Inc, a music unit of Sony Corp, announced that a plan to start selling music via the Internet by the end of this year, which will make it the first Japanese music company to provide online sales.
Sony unit said it would sell music at a price competitive with conventional compact discs (CDs), but insisted the move did not denote a big shift in its business priorities.
In addition to domestic artists, Sony Music markets CDs of international stars such as Mariah Carey, Michael Jackson and Celine Dion, who have recording contracts with the company's US sister firm Sony Music Entertainment Inc. But the online sales will be limited to domestic artists.
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