Digital TV channels are likely to take longer to break even due to lower-than-expected viewership, says global ratings agency Fitch Ratings. The adoption of digital TV channels has been slower than predicted six months after the launch in May. Delays in distributing subsidy vouchers by the National Broadcasting and Telecommunications Commission (NBTC) also caused lower viewership for the 24 digital TV channels. The lack of readiness has affected the production of new content and programmes for digital TV. After facing difficulties during the initial stage, digital TV operators should make an effort to earn cash flow from their operations and advertising revenue to cover content investment and licence fees, Fitch said. High-definition variety channels may need average annual revenue of at least 1.4 billion baht for all expenses — 800 million baht for operation costs and 600 million baht for licence fees. But Fitch estimates digital TV adoption rate will rise rapidly in the next two years after the coupons are successfully distributed according to the regulator's plan.While competition in the broadcasting sector will be more intense over the next two years, the rise in ad airtime from the new channels would lead to lower ad rates on average.This is an opportunity for small and medium-sized enterprises to promote their products on free TV for the first time.Advertisers are likely to continue to allocate the lion's share of their ad budgets to free-to-air channels over the next two years, commanding higher rates than those of new digital operators. For the first nine months of the year, media companies running the digital TV channels missed their target revenue, but there is the prospect of gaining viewers' shares from analogue channels.GMM Grammy Plc, the operator of One HD and GMM channels, received only 33 million baht from digital TV in the third quarter, out of the total 2.65 billion baht —a significant recovery after suffering first-half losses due to the political turmoil.The company is confident its newly-launched content will gain more ratings as adoption of digital TV picks up. It is ready to fully develop content for digital TV next year, which it hopes will become its key business.Workpoint Entertainment Plc, the operator of Workpoint TV, saw its revenue grow 11% to 677 million baht in the third quarter, mainly contributed by its digital TV channel and content supply to channels 3, 5 and 9.BEC Word Plc, the operator of Channel 3 and three digital TV channels, recorded lower net profit of 1.08 billion baht as it had higher fixed costs from digital TV licence fees.MCOT Plc generated total revenue of 3.37 billion baht in the first nine months, a 25% drop year-on-year, while net profit fell 64% to 436 million baht.