ABS-CBN unaffected by merger talks between 2 rivals, says network exec

ABS-CBN Corp. is unfazed by the possible merger of its two main rivals, saying that it was good content, not financial strength, that makes television networks succeed.

At the sidelines of the company’s annual shareholders’ meeting on Thursday, chairman Eugenio Lopez III said the expected merger of TV5 and GMA 7 would pose little threat to ABS-CBN’s position in the industry.

“It does not change what we have to do. We are focused on our own strategy. The number of channels that we have to compete with will not change,” Lopez told reporters.

He said ABS-CBN would continue to differentiate itself by producing better content, especially for its primetime segments. The bulk of advertising spending goes to primetime shows that air from 6 p.m. to 9 p.m. on weekdays.

“Combining channels will not give any group any inordinate advantage,” Lopez said. “There’s no such thing as economies of scale in broadcasting,” he said, saying that the Manuel Pangilinan group’s deep pockets would mean little if it would fail to produce content good enough to attract viewers from ABS-CBN.

The Pangilinan group runs the TV5 network. The group has also confirmed that it was in talks for the possible acquisition of GMA 7, owned by the Gozon, Jimenez and Duavit families.

Proof of ABS-CBN’s better content, Lopez said, was the company’s dominance in primetime ratings. He said the network would easily dominate total-day ratings if not for the lackluster performance of its noontime program, “Showtime.”

But even for the noontime slot, Lopez expressed optimism that “Showtime” would eventually overtake perennial lunchtime leader “Eat Bulaga.” “If you take into account the rural ratings, “Showtime” is almost at par with “Eat Bulaga,” Lopez said.  “It’s really just in Metro Manila where ‘Eat Bulaga’ has a big lead,” he said.

For 2012, Lopez said ABS-CBN would stick to its profit goal of P1.3 billion, roughly flat from 2011 levels, if one-time gains are stripped out.

He said that although airtime and consumer sales revenues have improved significantly, the company has felt pressure on its margins stemming from the more competitive environment for talent.