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Cignal Powers Up Local Content Push

Philippine DTH operator Cignal, the country’s largest pay-TV service by subscriber numbers, is banking on more exclusive local and Asian content to drive the next cycle of subscriber and revenue growth, while fending off rising competition from low-priced rivals.

The latest moves come as main rival SkyCable, which runs a higher-Arpu cable service in urban areas, is looking to extend its reach with new DTT and DTH services. These are likely to pose a direct challenge to Cignal’s prepaid base, lower-Arpu subs that have to renew each month, which make up around two third of its customers.

While Cignal is looking to expand revenue from its higher-Arpu postpaid services, launching a number of new packs this year, pay-TV penetration in the Philippines remains low, at around 16% of TV homes, leaving room for plenty of expansion at the lower end of the market.

The platform passed the one million subs mark in September, and is aiming to double that by 2018.

“It will be interesting to see what will happen as pay-TV gets more accessible and DTT gets more traction, how that can affect pay-TV,” Cignal TV’s COO, Oscar A. Reyes Jr, tells Media Business Asia.

“Let’s see how that dynamic comes out, especially now with us creating new content just for pay-TV,” he adds.

“We will see if that actually makes some sort of dent in the market. If it does, it’s going to be an interesting second half of next year and 2017 onwards.”

Sari-Sari Network

Cignal is stepping up its push around original local content after tying up with Viva, one of the country’s largest independent production and distribution companies, to create a new entertainment-oriented JV, Sari-Sari Network, earlier in the year.

The JV is prepping a new local entertainment and movie channel, also called Sari-Sari, for launch on Cignal’s basic pack in January.

This will include original film and drama productions as well as content from Viva’s library and shows from TV5, a free-to-air channel also run by Cignal’s parent MediaQuest, part of telco giant PLDT.

Sari-Sari Network, co-chaired by Viva CEO Vicente del Rosario and TV5 CEO Noel Lorenzana, has also been charged with overseeing the entertainment strategy and output for third-placed TV5, to help close the gap on the two free-to-air leaders, Channel 2 (run by SkyCable parent ABS-CBN) and Channel 7 (run by radio and TV broadcaster, GMA Network).

Cignal has exclusive national distribution rights for Sari-Sari, although the JV is allowed to resell the channel to local and regional cable operators.

However, the company is holding off on any more deals for now.

“We want to give Cignal the opportunity to grow the brand first on their channel, to own the channel for the meantime” says Viva’s del Rosario.

“We are partners with them with Sari-Sari,” he adds. “We are quite comfortable giving them breathing space.”

The ultimate goal for Sari-Sari is to ramp up dedicated productions and reduce the amount of library content over time until it airs 100% original content.

“We feel there is an opportunity in the market, both here and globally, to maximize the potential of the channel,” del Rosario says.


Cignal, meanwhile, is adding another exclusive national channel to its basic pack in January: Celestial Movies Pinoy, a Tagalized Chinese movies channel from regional broadcaster Celestial Tiger Entertainment (CTE), with Viva overseeing marketing and localization.

It’s the first time CTE has fully localized its flagship first-run Chinese movies channel, although another offering, Celestial Classic Movies, has been fully localized for Thailand (in partnership with local operator CTH). Upcoming kids channel Miao Mi, meanwhile, will also be fully localized for some markets.

CTE already distributes three of its channels – Kix, Thrill and Celestial Classic Movies – in the Philippines, seeing ratings momentum for English entertainment offering Kix in particular after an on-ground promotional push this year.

The idea for Celestial Movies Pinoy as something with potential mass appeal came out of conversations with Viva, which also distributes films for one of CTE’s shareholders, Hollywood studio Lionsgate.

“We have very high expectations for this channel, as do our partners, both Cignal and Viva,” says CTE’s CEO, Todd Miller.

Celestial Movies Pinoy will air recent hits such as Lady Of The Dynasty.

Cignal's In-House Boost

For Cignal, these new channels follow a tie-up with business news specialist Bloomberg, to run a localized version of Bloomberg TV in basic, which launched in July with a large tranche of locally produced programming.

The company is also looking to bolster the appeal of its two English in-house channels, sports offering Hyper and general entertainment brand Colours, with new programming next year, including exclusive PGA rights for Hyper.

All in all, it’s a big boost for the pay-TV opreator, which will operate five exclusive local channels with the launch of Celestial Movies Pinoy and Sari-Sari in January, up from zero a few years ago.

Such investments will need to generate more revenue to be sustainable, however, either through advertising and/or as a lure for subscribers to upgrade to higher-value packs.

SkyCable, by contrast, has a well-established suite of exclusive local offerings, in both English and Tagalog, giving it an edge in the market.

With much of Filipino content already locked into existing output deals, future growth in this area will have to come from new initiatives, potentially in collaboration with Viva, or more localized offerings from overseas, echoing the tie-up with Celestial.

Reyes is open to both, but the focus for now is bedding down the tasks in hand.

“We already have a lot to take in, and a lot to do,” he says. “We need to make sure these get to a certain level of cadence and independence before we venture into anything else.”

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