However, industry executives and analysts said external threats, such as a US-led war against Iraq or a repeat of terrorist attacks in the region, posed the biggest threat to growth.

Executives of Major Cineplex Group pose at the new Major Ciniplex in Bang Kapi early in October. Major Cineplex, Entertain Golden Village Co (EGV) and SF Cinema City Co are the key players in a market worth more than three billion baht a year. The competition will be even hotter in 2003.

The media and entertainment industry includes advertising, broadcasting, and cinema. Its strong performance in 2002 is indicated by the growing number of local firms listed on the Stock Exchange of Thailand.

Among them are Major Cineplex Group Plc, the country's largest cinema chain; Traffic Corner Holdings Plc, a media entertainment group, listed on the Market for Alternative Investment (MAI); and GMM Media Plc, a subsidiary of GMM Grammy Plc, the country's largest entertainment group.

Next year the list would also include RS Promotion Co, the country's second largest entertainment firm, Entertain Golden Village Co, the operator of the EGV cinema chain, and Matching Studio Co, which will be the first production house company to be listed on the MAI.

On Jan 2, Traffic Corner will start trading its stock in the SET's entertainment sector after the company increased its paid-up capital to 200 million baht.

Over the next three years, analysts expect that the outlook for the media and entertainment business in Thailand would remain positive and outperform many other sectors in the stock market.

ADVERTISING INDUSTRY ROBUST

Most media analysts agree that double-digit growth is most likely for total media spending in Thailand this year and the outlook in 2003 is also quite good. They attribute the rising growth to economic recovery, driven by consumer and corporate spending.

Parames Rachjaibun, president of the Advertising Association of Thailand, said it is most likely that total media spending in Thailand would grow 12% this year to between 58 and 60 billion baht.

Media spending in 2001 grew by 3.8% to 52.99 billion baht, as the pace of the economic recovery was slower than this year.

Film Bangkok's `Saving Private Tootsie' is an action-packed comedy about a group of transvestite men caught in a border dispute after their plane crashes.

``The business environment in Thailand is now very optimistic, but we have to take a closer look at regional and world issues that are key factors in bringing down industry growth,'' Mr Parames said.

Most advertising executives are confident that the industry would continue to grow in 2003.

They argue the government's low-interest-rate policy is a stimulus to spending and would play a key role in driving the growth in billings.

As a result, it will encourage consumers to spend more on buying houses, cars, electrical appliances and mobile phones, businesses that are among the top spenders in the advertising industry.

THAI MOVIES PACK CINEMAS

The cinema business in Thailand experienced a bumper year in 2002. Cinema operators have maintained the growth momentum by spending more money on the expansion of their chains, mainly in Bangkok.

Major Cineplex Group Plc, Entertain Golden Village Co (EGV) and SF Cinema City Co are still the key players in a market worth more than three billion baht a year. The competition will be even hotter in 2003.

Currently, EGV has a total of 79 screens, SF Cinema City has 59, and Major Cineplex will have 111 screens soon. Major Cineplex has a competitive edge over rivals due to its aggressive marketing strategy. In addition, it is able to raise funds from the stock market for expansion.

Major Cineplex was listed on the Stock Exchange of Thailand in May, the first cinema in the stock market. In the first nine months of 2002, the firm turned in a strong performance with a net profit of 229.39 million baht, nearly 10 times last year's earnings figure, on revenue of 1.3 billion baht.

EGV also announced it would revise its listing plans after splitting with Village Roadshow, its Australian partner.

EGV plans to list on the SET in 2003.

Analysts said the cinema industry is quite upbeat over the next few years due largely to the growing release of local movies.

In 2002, 25 Thai films were released. Also, the total number of films released locally, both Hollywood and Thai, has been forecast at 230, up from 194 a year earlier.

In 2003, this figure is forecast to increase to 255-270 titles, including 35-40 Thai films. Some of them are to be produced by the two giants GMM Pictures Co, a subsidiary of GMM Grammy Plc, and RS Promotion Co. RS Promotion Co, the country's second largest entertainment firm, will list on the SET in the first half of 2003.

Funds of one billion baht raised from an initial public offering of shares will be spent on its expansion, including movie production.

After listing in the market, RS plans to produce 10 movies a year with 400 million baht in total investment. Currently, the firm has eight in- house units to support its plan to become a leading producer of movies.

In the near future, the firm also plans to form a joint film-production venture with Hong Kong to supply movies to the Asian market.

RS Promotion expects to earn at least 500 million baht from movie ticket sales domestically, and internationally, at least 100 million baht a year from the distribution network of RS Film & Distribution Co, its subsidiary.

The overseas market has become more attractive to Thai film producers. Thai films are recognised increasingly abroad and are in growing demand from foreign distributors.

RS Film & Distribution, for example, has been welcomed at film festivals, including the American Film Market, the Cannes and Milan film festivals.

The firm also sold Bangkok Haunted to buyers from Asia and Europe. RS Promotion's arch-rival, GMM Grammy, has also tapped this trend. Grammy chairman Paiboon Damrongchaitham announced that his company would play a bigger role in the international film market with a line-up of movie productions in 2003. As well, he said, Grammy would open its doors to foreign studios to make joint film productions in order to strengthen its movie business.

At home, Grammy decided to form a joint venture with Hub Ho Hin Bangkok Co, the country's leading production house, to establish Hub Ho Hin Films Co.

The company's first release was Mae Kong Full Moon Party, a folklore comedy about fireballs mysteriously rocketed from the river into the sky during a full moon.

Film Bangkok, the movie production arm of BEC Tero Entertainment Co, has also restructured itself to make the responsibilities of its distribution and production lines more distinct.

Film Bangkok is in charge of distributing Thai films abroad and foreign films in Thailand, as well as providing production facilities for Thai and foreign film studios. Chalerm Thai Studio is to oversee film-making in Thailand.

In late 2002, its film releases included Saving Private Tootsie, a action-packed comedy about a group of transvestite men caught in a border dispute after their plane crashes.

Film Bangkok earned recognition in the international market from two films in 2001 Bangkok Dangerous, and

Tears of the Black Tiger (Fah Talai Jone). Miramax bought Tears of the Black Tiger for US$1.5 million, while Bangkok

Dangerous was bought by a foreign distributor for $800,000. PIRATES HURT MUSIC SALES In 2002, the music industry was still suffering due to rampant piracy.

A series of ministerial reshuffles in the portfolio of the minister overseeing the anti-piracy programme has not contributed to continuity in the law enforcement programme. After almost two years of the Thaksin government, there have been three successive deputy commerce ministers in charge of the anti-piracy portfolio, including Suvarn Valaisathien, Newin Chidchob, and finally, Watana Muangsook.Mr Watana promised recording firms he would put the piracy issue on the national agenda and vigorously pursue the anti-piracy policy imposed by earlier deputy ministers.

However, during the transitional period in a subsequent ministerial reshuffle, counterfeiters cashed in on the situation by pumping copied productsinto the market.

Recording firms estimate that piracy currently takes away 35-50% of the business from the legitimate market.

As a result, growth in the music industry in 2002 was expected to remain flat with total sales of around four billion baht.

But music firms have put greater effort into the fight against piracy, principally by cutting their CD prices.

``Without a price reduction, the music market will contract more. Therefore, music firms have to work harder,'' said Nadda Buranasiri, managing director of Universal Music (Thailand) Co. Universal Music, a part of Vivendi Universal of France, started cutting its CD prices to 399 baht from 500 baht, in November of 2002 in an effort to raise sales by 10%. EMI (Thailand) Co, and BMG (Thailand) Co had done likewise in September of 2001. Both companies said their CD sales improved after the price cut.

The campaign to cut CD prices in the fight against piracy was spearheaded in August 2001 by local giant Grammy, which slashed its CD prices by almost half. It was quickly followed by RS Promotion.

As a result, in the first half of 2002, Grammy sold 3.7 million CDs, 164% more than in the same period last year. VCD sales, mainly karaoke, rose 431% to 6.9 million copies.

But Mr Nadda said the new pricing strategy had been disappointing as the rise in total sales had failed to offset losses. As well, he said, foreign labels could not cut prices any further because they had to pay higher royalties.

He also attributed the disappointing sales to changing consumer behaviour. He said people today have more alternative forms of entertainment and pre-teen consumers now prefer to spend more money on mobile phones rather than on music CDs and tapes.