TURNAROUND STRATEGY

GMM Grammy enters digital age

Entertainment, music giant sees need to transform as CD sales fade

Music and entertainment conglomerate GMM Grammy yesterday announced what it calls its "2007 turnaround strategy", in which it will begin a transformation from physical entertainment media to digital.

The move, after 12 years of tapes and CDs, is aimed at keeping abreast of trends in sales of music and entertainment, which are changing from CDs to digital downloads from the Internet. The trend has resulted in a decline in GMM Grammy's CD sales over the past couple of years.

Last year the group fell short of its sales target of Bt6.5 billion.

"It is a turning point for GMM Grammy, in transforming our business from physical music media to the new digital-based era," said chairman Paiboon Damrongchaitham.

He said the company would become "customer-centric" this year, tailor-making its products to suit different segments of consumers. He gave the example of CD prices ranging from only Bt100 to more than Bt1,000, to serve different buyers.

"The proportion of CD sales will decline from between 70 per cent and 80 per cent of the total in 2003 to only 50 per cent this year," he said, adding that local teenagers have been turning away from buying CDs over the past two years and instead have been enjoying their music from digital downloads via the Internet.

"Teenagers have dramatically increased their music consumption through Internet downloads, but in the past we had no technology to charge these young people, who consume our music products," Paiboon said. "We will form alliances with major telecom operators to distribute our music products through their networks and share profits together."

The GMM Grammy chairman said that with its "customer-centric" strategy this year, the company would customise all promotion and marketing campaigns to different target groups.

"We expect to reduce expenditures and wastes incurred by using the massive marketing techniques of the past by contributing our marketing messages to all forms of media advertising," he said.

"Our new customer-centric strategy will help us to convey our marketing messages to those who are really the customers of our specific products."

GMM Grammy also announced yesterday a 2007 sales target

of Bt6.5 billion, the same as last year's.

Managing director of the company's artist division, Kriengkrai Kanjanapokin, said the group's business transformation was in line with changes in consumer behaviour, which make them more sophisticated.

"We have seen that Bangkok and urban people are more outgoing, while those in the suburbs are enjoying higher incomes," he said.

Kriengkrai added GMM Grammy had divided potential customers into major segments for individual marketing emphasis. They are baby boomers, aged between 40 and 59, who like to spend their lives satisfying their needs and aspirations; Gen-X, aged between 25 and 39, who work hard and need relaxation; Gen-Y, aged between 10 and 24, who need more "personalised" entertainment; and Gen-Z, aged nine and under, who are these days demanding "customised" entertainment.

Kwanchai Rungfapaisarn

The Nation
Thu, February 1, 2007