TV has remained primarily an entertainment medium in the Philippines, with programming among the top mass audience networks— GMA-7, ABS-CBN and TV5—now catering to all classes and all corners of the country.
“TV has become the biggest and probably the most signifi cant source of news and information because it is free, very accessible and up-to-date, and would usually broadcast live when there are important events,” said GMA Network Chairman and CEO Atty. Felipe L. Gozon. “Because of the mass-based programming of top networks, there also has been a growing number of alternative free-to-air (FTA) stations specifi cally catering to news, sports, or lifestyle, to name a few.”
FTA TV continues to dominate the Philippine broadcasting landscape. Most Filipinos today still rely on FTA analogue television to enjoy their favourite programmes since the majority cannot afford the channel options that cable television provides.
Gozon, citing the 2012 Urban Philippines Cable Penetration report from Nielsen Philippines, noted that only 22 percent of national TV households are cabled—an estimated 2,012,000 households, down from 23.5 percent cable ownership in 2011. Market research fi rm Digital TV Research, meanwhile, forecasts that total penetration of pay-TV in the Philippines will only reach 23 percent by 2016.
One of the main reasons why FTA broadcasters still have massive control over most viewing households is that these households tend to avoid recurring costs, and are mostly already content with FTA channels, said Gozon. “Even in cabled homes, GMA Network and ABS-CBN are the highest raters, not the cable channels,” he added. Rico Camus, head of corporate planning at ABS-CBN, agrees, saying that this limitation has hindered millions of Filipinos from enhancing their viewing experience by appreciating a larger selection of channels.
Nevertheless, TV ownership in the country has been increasing. According to Nielsen, the proportion of homes with TV sets increased 4 percent nationwide over the 2008–2010 period.
Digital terrestrial television or DTT has been considered the solution to this current reality in the Philippines, said Camus. He noted that for the past fi ve years, the National Telecommunications Commission (NTC) and the KBP (National Association of Broadcasters) has been planning for the country’s migration to digital. NTC has given Philippine TV networks until December 31, 2015 to fully convert from analogue to digital technology. Camus said the launch of the technology to the public will begin when the government releases the Implementing Rules and Regulations or IRR. However, the IRR, originally scheduled for release last June 2011, has been moved to the second half of 2012. “We are confi dent that it will be released soon as DTT serves the impending need of a majority of consumers for quality television viewing at an affordable price,” said Camus.
But Gozon said the prospective migration date is still in need of thorough discussion, given the economic realities of the greater number of TV households in the market. For one, with over 26 percent of Philippines’ population below the poverty line, only a small number can afford HDTV sets.
Gozon noted that GMA-7 can readily make the switch to digital broadcasting since they have already made and continue to make the necessary investments. However, GMA-7 may delay adoption of full digitisation due to the economic situation of the Filipino TV viewers.
Regulatory developments
The Movie and Television Review and Classifi cation Board (MTRCB)—the Philippine government agency responsible for reviewing and classifying media products—has implemented stricter programming guidelines for the country’s TV viewership. MTRCB recently added another television rating called “Strong Parental Guidance” (SPG) in addition to two television ratings called “General Patronage” (GP) and “Parental Guidance”. This is to further encourage parents to supervise their children’s viewing habits. The Department of Education’s (DepEd) National Council for Children’s Television (NCCT) and the MTRCB also recently released the implementing rules and regulations of the 1997 Children’s Television Act. This will see government censors implementing a “TV violence rating code” to get networks to reduce graphic scenes in the news and other programmes.
Ratings war
ABS-CBN and GMA-7’s domination of the Philippine TV industry was rattled when PLDT (Philippine Long Distance Telephone Company)-backed TV5 re-launched in 2010 with new programming and strategy. Furthermore, it acquired talents whose contracts have expired from both networks.
Gozon, however, noted that TV5—amid its huge investments in talents, programming, infrastructure facilities, and equipment—has not posted a signifi cant threat to competition yet, and claims that that GMA and ABS-CBN still maintains the duopoly in the advertising pie.
When it comes to ratings and audience share, however, one irreconcilable fact is that both ABS-CBN and GMA-7, using different audience measurement providers—Kantar Media for ABS-CBN and Nielsen TV Audience Measurement for GMA-7—claim number one position.
From recent data by Nielsen, GMA-7 was 1.5 household audience share points away from ABS-CBN in “total day” (6:00am to 12:00mn) TV ratings with 34.3 points versus the latter’s 32.8 points (numbers were based on partial June overnights). According to Gozon, GMA-7 trusts the reliability and credibility of ratings data provided by Nielsen, which has 22 companies in its clientele list, including major TV networks Faulkner Media and CBN Asia, 15 advertising agencies, and three regional clients.
The Nielsen TV Audience Measurement has a sample size of 1,190 homes in Mega Manila and a nationwide sample size of 2,000 homes. Meanwhile, Kantar Media boasts of a total TV universe of 15.1 million homes nationwide.
With Kantar Media’s expanded data coverage, Camus said ABS-CBN dominated TV viewing in June. Data from Kantar Media showed that ABS-CBN’s average national audience share hit 42 percent on “total day” or a ten-point lead versus GMA-7 with 32 percent.
Pay-TV slowly gaining ground
Despite FTA’s dominance, pay-TV channels and service providers are optimistic about the outlook for the TV landscape in the Philippines. For one, major direct-to-home (DTH) provider Cignal TV recently signed a multi-year capacity agreement with satellite company SES to ramp up its DTH offering to 15 HD channels and 51 SD channels from nine HD and 37 SD channels previously.
When it comes to cable TV, some of the leading service providers include SkyCable, Global Destiny Cable, Cablelink and Parasat Cable. FOX International Channels (FIC) said it is currently the fastest-growing TV network in the local market—even growing far quicker than all other international brands.
“Pay-TV penetration in the Philippines hasn’t grown as rapidly as other parts of Southeast Asia, and is currently in the hands of only a small percentage of the population,” said Jude Turcuato, Vice President, Territory Head for Philippines, FOX International Channels. Turcuato believes that pay-TV channels with local content are big opportunities in the Philippines. “This is why we launched FOX Filipino to satisfy a void in that genre for pay TV. Medium to long term, we have invested more than anyone in HD, and feel that its growth will create a huge opportunity moving forward.”
Merger in the offing
For months now, the Philippine TV market has been ripe with news about TV5’s mother company MediaQuest Holdings Inc.—a subsidiary of PLDT—acquiring GMA-7. In a BusinessWorld report, Manuel V. Pangilinan, MediaQuest Chairman, said that they are likely to come to an agreement about the deal before the year ends.
The deal, however, still has quite a few details needed to be ironed out, such as the agreement on price, share size, as well as regulatory approvals. According to a Rappler report, Gozon said that the deal will either push through within this year, or not at all. Rappler quoted Gozon as saying that they are not peddling GMA-7 for sale. “Somebody wanted to buy and we attended to it. That’s all. There is no plan B, no Plan C, no Plan D,” Gozon said.
This will be the third bid for Pangilinan to buy out the company. If the deal pushes through—whether via a merger or a consolidation—the surviving entity will be the biggest TV network in the Philippines. PLDT may also provide GMA-7 (the only broadcaster of the three with limited broadband capabilities) major broadband and cable assets—helping it to challenge ABS-CBN’s Sky Cable unit.
Still, ABS-CBN said it is not threatened by the possible GMA7-TV5 merger. In an ABS-CBNnews.com report, Chairman and CEO Eugenio L. Lopez III said he does not think a possible GMA7-TV5 merger would change the landscape of the industry. He also noted that the number of channels that they have to compete against remains the same. “It doesn’t change what we have to do. We’re very focused on our own strategy. As far as we’re concerned, we just have to execute and we’ll be okay,” said Lopez.
