ABS-CBN Corp. is about to begin construction of sound studios at its 14-hectare compound in Novaliches, Quezon City. This undertaking will significantly lower the company’s production costs by allowing more shows to be shot in-house.
Officials said the new facility, which would feature at least six sound studios, would cost as much as P6 billion to build and should be completed in three years.
“We spend as much as P100 million a year just on rentals for our shoots in remote locations,” ABS-CBN chair Eugenio Lopez III said at the sidelines of the company stockholders’ meeting.
He told reporters that the new facility, which would stand on a small portion of the Lopez family’s property in Novaliches which ABS-CBN had acquired, would enable the company to produce better shows at a lower price.
“We are also launching a lot of new channels especially when the digital TV is rolled out so the need for additional production capacity is expanding,” Lopez said.
He explained that this was part of the company’s effort to cut costs as advertising revenues plateau.
Lopez said more and more of the company’s earnings would come from consumer sales, which included subscription revenues from its international channels and from the sale of ABS-CBN branded products.
Growth in its advertising revenues, however, would not be as fast.
“The consumer sales segment is really where our future growth will come from,” Lopez said.
This year, the company remains on track to meet its target net profit of P3.2 billion—the same as that of last year.
Last year’s performance was a record high for ABS-CBN, due largely to the political ad placements in the runup to the 2010 national elections.
“Our view is that our ratings have been doing well,” Lopez said, adding that this should lead to a healthy growth in advertising from traditional clients.
“I think we will get a bigger share of the overall ad market due to higher ratings,” he said. “We are also aggressively trying to bring down our costs.”