Philippine broadcaster ABS-CBN continues to build out new revenue streams with scope to diversify even further in the future, as it makes the most of developing experiential and digital touchpoints in what is currently Southeast Asia’s most dynamic economy.
"We’re slowly moving from a broadcast-driven network to a network that is more consumer-driven and so today maybe 50 percent of our revenues are more consumer-led,” said ABS-CBN chairman Eugenio “Gabby” Lopez III, speaking during APOS 2015.
“We expect that to continue into the future, as we find ways to take our content and bring it directly to consumers as opposed to just strictly advertisers,” he added.
Robust economic growth, the strongest in Southeast Asia with GDP growing 6-7% annually since 2012, is generating plenty of momentum within ABS-CBN’s core revenue streams while opening up new opportunities at the same time.
The company shows no signs of slowing down, as it rolls out strategies to further monetize these ventures.
The broadcaster, which traditionally has made most of its money from TV advertising, now oversees a virtual mobile network, a theme park to be launched in June and a home shopping channel, in addition to longer established pay-TV and merchandizing businesses.
Assisted by the buoyant domestic economy, ABS-CBN has emerged as an investor favorite in recent years, which Lopez attributes to a blend of ambition of financial restraint.
“I think we’ve convinced them that our approach of trying to be ubiquitous and investing in all the new platforms that come out, so we can really give the consumer what he wants, is really the proper approach,” he said.
“At the same time, we’ve been able to manage our production costs and they’ve seen that going down. They really like to see that kind of discipline in a content company.”
ABS-CBN will invest for the future however, spending more than 1.8 billion pesos (US$41 million) on a theme park, Kidzania Manila, which is scheduled to open in June.
"That's our first foray into amusement parts, to give us an understanding of how that whole business works out," Lopez said.
"Our aspirations used to be a lot like Disney, taking our content and leveraging it to all the various platforms. Amusement parks is one of them."
Deeper into pay-TV
The ambition is also evident in ABS-CBN’s plans for pay-TV, seeking to reclaim its lead as the country’s biggest pay-TV operator by subscribers.
Lopez set out the gameplan, to revamp channel packaging on ABS-CBN’s incumbent cable network SkyCable ahead of a new DTH service (anticipating a license to be issued soon), while adding pay options to its emerging DTT and OTT platforms over time.
“A slimmed down version of basic is an important component of the way we’re going forward,” Lopez said.
“Sky is also going to be launching a DTH service which is coming out this September, so we will be able to offer this on a nationwide basis,” he added. “That’s a key component for us to grow that business.”
The company is also busy rolling out its free DTT service, selling about 500,000 boxes by April after commencing a marketing launch in February, initiated after the country formally adopted the Japanese ISDB-T DTT transmission standard last December.
Ad revenues from DTT should start to flow at the million-box mark with double-digit ratings, Lopez noted, while a paid offering will come into play further down the road.
“There’s a lot of other activities that we're going to be able to do with the box that we're going to put in people's homes," added Lopez, who expects the service to reach 5 million households over the next few years.
“That is an opportunity for us to build very new revenue streams that we don't have today.”
The company is also looking to ramp up revenues for over-the-top (OTT) video distribution. It is currently operating an online catch-up service that includes an authenticated multiscreen offering for its pay-TV subs (iWantv), as well as a standalone subscription platform for overseas Filipinos (tfc.tv).
The company wants to introduce a paid OTT offering too with revenues likely shaped around prepaid sachet pricing, leveraging ABS-CBN’s broadband offering and content partnerships.
“We’re working with several foreign companies to launch; it will have our own local content and we will also have foreign content,” Lopez said.
“I think that combination is going to be an interesting one.”