Joint ventures of ‘frenemies’

The saying “there are no permanent friends and there are no permanent enemies, only permanent interests” rang true when the country’s major TV networks, once rivals, recently signed coproduction agreements.

Last week, ABS-CBN and TV5 entered into a five-year content agreement for the production of popular programs. Earlier, GMA Network agreed to air ABS-CBN’s “It’s Showtime” in its GTV channel.

The contract between ABS-CBN and GMA had, in effect, put an end to the “ratings war” they were engaged in for years with varying results until ABS-CBN lost its legislative franchise in 2020.

Before that, the two companies were “frenemies” in the highly competitive radio and TV industry. (Frenemy is an abbreviated combination of the words “friend” and “enemy” and refers to a person who maintains friendly relations with another despite their being competitors or rivals in their line of business.)

Although ABS-CBN was, in a limited way, able to continue to operate despite the nonrenewal of its franchise, the reduced reach of its facilities had an adverse effect on its revenues.

Thus, ABS-CBN’s recent agreements with its erstwhile competitors have given it a new lease on life, or a recovery (although on a small scale) that its detractors probably thought would not happen.

In light of the latest developments in technology and changes in the viewing habits of Filipinos, which advertisers keenly monitor, GMA and TV5 made a deft strategic move in partnering with ABS-CBN.

With the internet, social media and other streaming services eating into the market or audience that the TV networks once had a lock on and, in the process, attracted a fair amount of advertisements, it was essential that they set aside their rivalry and work together to keep their internet-based competitors at bay and remain in the black.

They have to produce programs that their audiences would want to watch consistently so their advertisers can get their money’s worth and be encouraged to maintain their sponsorships.

It is common knowledge that advertisers closely keep an eye on the viewership or ratings of the TV programs they sponsor to make sure their sales pitches reach their target market in a timely and effective manner.

If the viewership or ratings of their sponsored programs are low or leave much to be desired, advertisers do not hesitate to withdraw their promotional materials and put them in other portals that can draw bigger audiences.

When advertisements do not meet their intended objectives, long-standing client-advertiser relationship hardly makes a difference in deciding whether or not to take them out.

It costs a lot of money to produce quality programs that can attract viewers who have been exposed to award-winning foreign movies with excellent cinematography or have become sophisticated in their choice of programs to watch.

Good script writers, actors and supporting cast, state-of-the art audio and video recording equipment, and visually-realistic movie sets and special effects do not come cheap.

There is also no assurance that the millions of pesos that may be spent to produce those programs would draw the level of viewership or patronage that advertisers consider worthy.

Thus, it made good business sense for GMA and TV5 to enter into agreements with or “outsource” to ABS-CBN the production of some TV programs.

Based on its track record, ABS-CBN has the creative expertise, pool of talented actors and facilities needed to produce programs that can appeal to the present viewing habits of many Filipinos.

By tying up with ABS-CBN, the two other networks do not have to reinvent the wheel, so to speak, in the conceptualization and production of the programs they want to air and, in the process, gain from the economies of scale of their joint ventures.

Moral of the story: Your business rival today could be your valuable ally in the future.

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