ABS-CBN moves to lessen reliance on ad revenues
Eugenio Lopez III. INQUIRER FILE PHOTO
MANILA, Philippines—ABS-CBN Corp. is expecting dramatic changes to its revenue mix as it shifts away from traditional advertising to consumer sales from cable television, mobile and movies to help escape the “boom and bust cycle” TV firms face between election years, which are marked by increased ad spending.
ABS-CBN chair Eugenio Lopez III said consumer revenues were now at par with advertising revenues and he expected the trend to continue with consumer sales accounting for about 75 percent of the total pie in five years.
“It depends on mobile, if it does very well we will hit it a lot earlier,” Lopez said in a briefing following the company’s annual stockholders’ meeting on Wednesday.
He was referring to the company’s partnership with Globe Telecom, which will provide the network infrastructure for ABS-CBN’s mobile business launched in November last year.
“There is only so much growth you can get in advertising,” Lopez said. “We want to monetize our content beyond just advertising by directly relating to what consumers want.”
Advertising still accounted for about 57 percent of ABS-CBN revenues last year, versus an estimated 50 percent in the first quarter of 2014, the company’s chief financial officer Aldrin Cerrado said during the same briefing.
ABS-CBN is set to report first-quarter results on Thursday.
ABS-CBN is one of the country’s largest television broadcast firms and mainly competes with GMA Network Inc. for ratings.
ABS-CBN said profit last year jumped 25 percent to P2.03 billion, while revenues increased 15 percent to P33.4 billion, bolstered by political related ad spending. Profit this year was still expected to match last year’s figure, Lopez said. “Broadcast companies only make money in an election year,” Lopez said.
“Our ambition is to hit the same income target over 2013, an election year, showing our investments in various businesses are reaping the benefits that are enabling us to go beyond a company that does well in election years,” he added.
