A Wider Revenue Base

Rising prosperity and digital proliferation are also prompting ABS-CBN to explore new business areas such as consumer licensing and home shopping, as well as additional online distribution platforms. A new mobile broadband offering, developed by ABS-CBN using spectrum leased from local telco Globe, could broaden the market with specific content offerings in addition to traditional voice and data services.

The service, soft-launched in November ahead of a formal reveal in January, helps fortify ABS-CBN’s position against its biggest competitor in a post-analog world, domestic telecoms titan PLDT, which runs a national free-to-air network (TV5), as well as a DTH pay platform (Cignal) via its MediaQuest subsidiary. ABS-CBN retains an edge in the all-important content arena however, after PLDT failed in a bid to buy GMA Network last year, although discussions for a revived deal have resumed according to local reports at press-time. Success would be a boon for PLDT, which had also struggled with earlier attempts to turbocharge ratings performance for TV5, lying a distant and stubborn third behind the two leaders. PLDT’s sustained assault on the status quo squeezed revenues and margins for all three players, although ABS-CBN looks to have emerged from the latest skirmish in the best shape. GMA Network seems to have weakened, and has become more flexible on ad rates as a result, a shift in market dynamics that could have a knock-on effect for ABS-CBN.

Strategically however, 2014 promises to be a cornerstone year, with ABS-CBN raising the tempo on key initiatives. “We are going through a transition, what we call the second curve in our long-term strategic vision for the company,” Santos-Concio says. One near-term opportunity lies in devoting more resources to the kids’ genre, with ABS-CBN ramping up production of children’s content in preparation for a new dedicated TV channel, which will formally launch as part of a national switchover to digital TV that should commence sometime in 2015. (The channel is already on air as a test broadcast, but is running mainly acquired content for now). Santos-Concio wants to build on this momentum however with ABS-CBN’s first theme-park, using the Kidzania infotainment franchise, which allows young children to role-play possible future careers in scaled down real-world environments, with opportunities for brands to get involved too. The new venture, due to open in Manila at the end of 2014, forms part of a broader push into new areas such as consumer products, licensing and franchising. “From there, it’s just going to grow,” Santos-Concio says.

Earlier this year for example, ABS-CBN secured rights to 13 properties developed by Mars Ravelo, a Philippine graphic novelist best known for his homegrown super heroes, which have already successfully transferred to film and TV in the past. Santos-Concio feels it’s time for a revival, pointing to US comic book publisher Marvel, home to action heroes such as Iron Man and The Avengers which have been re-energized after Disney acquired the company in 2009. “It’s like a counterpart to Marvel,” Santos-Concio says. “We bought the rights to the Ravelo characters and we’re creating an entire franchise.”

Similarly, Santos-Concio is deepening ABS-CBN’s involvement in sport, seeking to nurture domestic basketball and boxing for example, in tandem with investing more money in sports content. “We are partnering with boxing talent management firms and we want to be able to promote local boxing talent,” she says. “By promoting the talents we are also promoting the sports heavily. There’s a lot of growth there, a lot of future.” To complement this push, ABS-CBN is reinventing its Studio 23 entertainment channel, a flank offering airing on the UHF spectrum, as a sports network. Studio 23 has already attracted a following for local college basketball content from UAAP, which is on air for part of the year. Executives are searching for other sports such as volleyball and football to fill the rest of the calendar. Fast-tracking sports development is a priority, with a dedicated sports channel another key element in ABS-CBN’s digital TV portfolio, alongside other genres such as movies and kids. “We already have our foothold in the lifestyle scene and mainstream entertainment, we have our 24x7 news channel,” Santos-Concio remarks. “Sports is one genre that’s under-developed.”