Resilience in TV competition

Recent technological advances in the entertainment industry have encouraged erstwhile sharp competitors in the television industry to rethink their business relationship with each other.

Netflix and other free video-on-demand apps have eaten into the local audience that, for decades, alternated between the programs aired by Channel 2 of ABS-CBN Corp. and Channel 7 of GMA Network, Inc.

They were a virtual duopoly that made both of them very profitable, especially during election campaign periods.

That option ended in 2020 after ABS-CBN lost its legislative franchise. In light of that loss, ABS-CBN used the internet to be able to continue to air its news broadcasts and select programs.

But because of the limited reach of that medium, ABS-CBN’s revenue stream from advertisements left much to be desired. Many of its original advertisers moved to social media.

ABS-CBN’s frequencies were withdrawn by the National Telecommunications Commission and awarded to Advanced Media Broadcasting System (AMBS), a company owned by business magnate Manuel Villar, which carries the brand ALLTV.

The initial broadcasts of ALLTV had low audience ratings. Because its shows did not attract the level of advertisements needed to sustain its operations, it was forced to shut down.

Considering the unpleasant circumstances that led to the cessation of ABS-CBN’s lucrative TV programs, it is not far-fetched to assume that the owners of the erstwhile largest TV and radio network in the country would harbor ill or hurt feelings over the takeover of their frequencies by the Villar family.

Aside from its adverse financial impact, the loss of the Lopezes’ crown jewel also meant the end of the influence they used to enjoy in the political scene on account of the wide reach of their TV and radio network.

It looks like the Lopezes have let “bygones be bygones” and had moved on from the heartbreaking loss of their franchise by entering recently into a content partnership agreement with ALLTV, with the evening newscast “TV Patrol” airing in its former frequency.

From all angles, the partnership made good business sense for both parties.

ABS-CBN has the expertise and facilities in producing programs that can attract wide patronage (and in the process, draw in advertisements) which ALLTV is sorely lacking of.

The latter would have to spend millions of pesos to acquire that capability with no assurance that it would be able to successfully replicate it. Besides, it took decades before ABS-CBN reached that stage and ALLTV does not have the luxury of time.

On the other hand, ALLTV has the platform on which those programs can be aired and, in the process, make money on, so the partnership agreement was a “win-win” situation for both parties.

A similar mutually beneficial arrangement has also been forged between GMA and ABS-CBN. Setting aside their long-standing competition, GMA has given air time to the latter’s noontime program “It’s Showtime” and a drama series that has a huge audience.

Like ALLTV, it made good business sense, too, for GMA not to independently produce those shows, whose costs would be enormous, entering instead into a content arrangement with ABS-CBN.

For both parties, there was no point in dwelling on past recriminations about whose network had a bigger audience. That’s water under the bridge, so to speak.

They have to engage in collaborative activities that would enable them to keep their market share in the face of competition from other sources of free entertainment.

With the writing clearly on the wall, they have to set aside whatever differences they had before and work together, lest they both find themselves joining the ranks of businesses that had been rendered obsolete by advances in technology, e.g., telegrams, facsimile machine, VHS tapes and personal digital assistants.

The actions of ABS-CBN, ALLTV and GMA validate the saying that in business, like in politics, there are no permanent enemies or permanent friends, only permanent interests. INQ

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