GMA Network, Inc.

GMA to introduce 'cheaper, smaller' digital TV device in June

The listed broadcast giant says its digital transmission device is now being manufactured in China, with over one million units seen to be released in a year's time

MANILA, Philippines – Broadcast giant GMA Network Incorporated is set to commercially launch a digital transmission device in June, which according to its chief is "cheaper and smaller" than that of its rival network.

"It is patented. Our device has so many features. What is available in the market just connects in one way – from TV station to the TV set. There is no return. In our device, you have data. What you can do in your smartphone, you can also do there. You can communicate, record, wherever and whenever," GMA chairman and chief executive officer Felipe Gozon told reporters on the sidelines of an annual stockholders' meeting in Quezon City on Wednesday, May 16.

GMA Network is adapting the Japanese Digital Terrestrial Television Broadcast (DTTB) standard, in line with the rules and regulations of the National Telecommunications Commission (NTC).

It was in December 2014 when the Philippine government cleared the way for the country's shift to a DTTB system. Broadcast companies were told to simulcast DTTB and shut off analog TV by 2019.

Barely two months after the digital shift order, GMA's rival ABS-CBN Corporation pioneered the digital shift by selling "black boxes" for P2,500. These are meant to replace the analog antennas installed in 17 million TVs in the country.

"[Our device] is now being manufactured in a factory in China," Gozon said, adding that GMA targets to release over one million digital transmission devices in a year's time.

Before the end of May, Gozon said GMA's digital TV signal will be available in other key areas in Luzon and the Visayas. (READ: Hardware boom comes with PH shift to digital TV)

"By June, our digital operations will already reach Mindanao. After we are through with our digitization project, we will be covering 83% of the Philippines. For the 27% balance, there are only trees and farmlands and no TV sets," he added.

Better profit for 2018
Gozon said GMA has allocated a total of P700 million to P800 million for its Japanese DTTB adoption, which is much lower than ABS-CBN's about P3 billion. (READ: PH telcos, TV networks ride double-edged digital wave)

As the network remains "very prudent" when it comes to managing operating expenses, it expects to have a higher net income this year than the P2.560 billion recorded in 2017.

"Based [on] the sales in April and May alone, we are confident that we will exceed our gross revenues in 2017 because we have been very prudent in controlling our operating expenses. Our projection is we will have a bigger net income in 2018 than in 2017," Gozon said before the GMA shareholders.

"We funded our digital [TV] project without borrowing anything, and yet, we were still able to declare cash dividends this year. I think that says a lot on how we manage our expenses," he added.

Gozon told the network's shareholders that he expects the 2nd quarter financial results to offset the 49% decline in net income during the 1st 3 months of the year.

"In the 1st quarter, we were behind by about P400 million because big advertisers did not go in the market right away – unlike in 2017. They (big advertisers) waited. But in April, we were ahead by around P170 million," Gozon added.

In 2017, GMA saw its net income plunge by 30% from the 2016 level, due to the absence of election-related advertisements.



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GMA Network income increases 13% in 2nd quarter

GMA Network, Inc. recorded a 13% increase in its attributable net income to P800.344 million for the second quarter, as revenues recovered slightly.

Despite a positive turnout for the April to June period, the media company’s six-month attributable net income is still 21% lower at P1.219 billion.

In a regulatory filing, GMA Network said net revenues inched up by 1.19% to P3.97 billion in the second quarter. However, the six-month revenue figure fell 6% to P7.24 billion.

“The first semester result was boosted by revenues during the second quarter which came up 22% better versus the recorded topline in the opening three months of this year. Nonetheless, the industry continued to be beset by the downsizing in television ad spend of major clients, consolidated revenues of the Company recorded a 6% decline from same period in 2017, albeit an improvement from the 13% shortfall posted by the end of the first quarter this year,” GMA said.

Consolidated airtime sales, which account for 88% of total revenues, slipped 7% to P6.4 billion in the first six months of the year.

“This year saw a notable contraction in television placements from advertisers, which was felt across the broadcasting industry. Mixed results were seen among airtime-revenue generating platforms, with Radio and Regional TV operations managing to pull ahead in their topline year-on-year, while Ch-7 and GNTV-11 had lukewarm sales in between periods,” GMA said.

GMA’s other revenue sources, which include international operations, subsidiaries and other businesses, went up by 3% to P855.9 million.

The company said its total operating expenses for the first half was flat at P5.573 billion, as the “escalation in general and administrative expenses was mitigated by the drop in production spending.”

Total production costs dropped 4% to P2.929 billion due to reduced spending for production supplies and transportation and communication expenses.



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ABS-CBN, GMA Network 3rd quarter earnings decline on lower ad revenues

MEDIA companies ABS-CBN Corp. and GMA Network, Inc. reported lower earnings in third quarter, due to a slump in advertising revenues.

In a regulatory filing, ABS-CBN said its net income attributable to equity holders of the parent company dropped 19% to P776.9 million during the July to September period.

The Lopez-led media company said its third quarter revenues grew by 4% to P10.6 billion, as advertising sales fell 2% to P5.302 billion.

For the first nine months of 2018, ABS-CBN saw its attributable net income decline by 32% to P1.627 billion.

Consolidated revenues for the January to September period was flat at P29.49 billion, from P29.51 billion a year ago. Advertising revenues also dipped 3% to P14.87 billion, while consumer sales rose 3% to P14.6 billion on a 24% rise in sales of TV Plus boxes.

ABS-CBN recorded a 5% rise in direct costs and expenses during the nine-month period at P28.190 billion. This was attributed to a 8% growth in production costs at P9.56 billion and 8.4% hike in general and administrative expenses at P8.892 billion.

Meanwhile, in a regulatory filing, GMA Network reported its attributable net income went down 4% to P738.28 million during the third quarter, as revenues declined by 5% to P3.892 billion.

During the January to September period, GMA Network reported its attributable net income slumped 15% to P1.9 billion, amid 6% lower revenues to P11.142 billion. Consolidated operating expenses dipped 2% to P8.4 billion during the first nine months.

GMA Network said its year-to-date sales from television and radio airtime, which is 88% of the company’s revenues, dipped 6% to P9.845 billion.

“[T]he contraction in airtime advertising was felt across the broadcasting industry thus providing the main drag for the revenue shortfall. Nonetheless, mixed results were seen among airtime-revenue generating platforms, Radio and Regional TV operations remained steadfast, managing to pull ahead in their topline year-on-year, while Ch-7 and GNTV-11 succumbed to lukewarm sales in between periods,” it said.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said the drop in earnings for both companies only shows that advertisers are shifting to online platforms.

“Looking at both companies’ stock prices even for the last 24 months, you can see that both have been declining steadily because of this. That said, both companies have also begun shifting and diversifying into the online space,” he said in a text message on Thursday.

GMA said sales from international operations, subsidiaries and other businesses led by its digital arm GMA New Media grew 2% to P1.297 billion in the nine-month period. For ABS-CBN, its digital platforms delivered consolidated revenues of P627 million, up 46% from last year. 



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ABS-CBN, GMA claim top ratings in 2018

RIVAL networks ABS-CBN Corp. and GMA Network, Inc. both claimed the top spot in television ratings in 2018, using different audience measurement reports.

Citing Kantar Media, which measured ratings from 2,610 urban and rural homes, ABS-CBN said it trumped all networks in 2018 with an average audience share of 45%, excluding data during the Holy Week.

In a statement, the Lopez-led company said it dominated the Metro Manila and Mega Manila markets where it gained an average audience share of 42% and 36% respectively.

Across islands, ABS-CBN said it also won over the households in Total Luzon with an average audience share of 40%, Total Visayas at 53% and Total Mindanao at 52%.

But challenging ABS-CBN’s claims is GMA, which said its total day people audience share for the whole year reached 40.8% in the National Urban Television Audience Measurement (NUTAM), using data from Nielsen TV Audience Measurement.

In a statement, GMA noted Nielsen’s data covers “a greater number of sampled homes nationwide in comparison to Kantar Media,” with around 900 more households surveyed in Total Urban and Rural Philippines.

GMA said aside from NUTAM, it also dominated Urban Luzon where it tallied a 45.9% total day people audience share for the full year, and Mega Manila with 47.7% share from the start of 2018 to Dec. 22.

But in terms of time block ratings, ABS-CBN said it led the market across all time slots: the morning block (6 a.m. to 12 p.m.) with 38% average audience share, noontime block (12 p.m. to 3 p.m.) with 44% share, afternoon block (3 p.m. to 6 p.m.) with 43% share and prime time block (6 p.m. to 12 a.m.) with 49% share.

It also noted that 16 of its shows made it to the country’s 20 most watched programs in 2018, led by its three-year-old prime time drama “FPJ’s Ang Probinsyano,” with 41.2% average national TV rating.

GMA did not present its time block ratings, but noted its magazine program “Kapuso Mo, Jessica Soho” ranked first in most-watched shows of 2018.



PLDT, GMA team up for digital television

PLDT, Inc. and wireless unit Smart Communications, Inc. are working with GMA Network, Inc.’s New Media, Inc. (NMI) to assist the television network in its digital transformation.

In a statement, the listed telecommunications giant said it signed on Wednesday a technology, content, and distribution agreement with GMA that relates to the latter’s plans for digital television.

PLDT-Smart Chairman, President and Chief Executive Officer Manuel V. Pangilinan said the partnership with GMA Network helps its goal of transforming “from being a legacy telco into the premier and most trusted digital enabler in the country.”

“[T]his partnership will enable us to power GMA’s digital pivot and help deliver to our millions of fixed and wireless subscribers GMA 7’s unique and compelling content, as well as exciting new digital experiences to more Filipino families,” he said in the statement.

GMA Network Chairman and Chief Executive Officer Felipe L. Gozon said the agreement is a step towards the media company’s goal of “welcoming disruption and embracing digital with open arms.”

“By riding the wave of disruption with PLDT and Smart as partners, we will not only upgrade the quality of content we are producing but we are also setting the stage for a new age of digital television,” he was quoted as saying.

For years, PLDT and GMA Network have been engaged in on-and-off negotiations for the telco to acquire a controlling stake in the media company. In 2017, both Messrs. Pangilinan and Gozon said they were open to revive the talks, but no progress was made.

PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. currently holds all television and print media interests of Mr. Pangilinan. This includes TV5 Network, Inc., Cignal TV, Inc., the Philippine Star Group, and BusinessWorld.



ABS-CBN, GMA Network still locked in television ratings dispute in January

ABS-CBN Corp. and GMA Network, Inc. continued to tussle over television ratings in January, with both media giants claiming the lead but citing different measurement providers.

In a statement, ABS-CBN claimed its nationwide average audience share reached 45% in January versus its rival’s 30%, based on a report from Kantar Media. Its audience measurement provider obtained its data from 2,610 urban and rural homes nationwide.

The Lopez-led firm said its dominance was spread across the country’s capital and the three main island groups, as it recorded 44% average audience share in Metro Manila against GMA’s 23%; 37% in Mega Manila versus GMA’s 28%; 40% in Total Luzon opposed to GMA’s 32%; 54% in Total Visayas edging GMA’s 25%; and 55% in Mindanao beating GMA’s 26%.

On the other hand, GMA said its average total day people audience share in the National Urban Television Audience Measurement (NUTAM) was 37.8% for the first month of the year, higher than ABS-CBN’s 35.9%, with data from Jan. 27 to 31 based on overnight ratings.

GMA had tapped Nielsen TV Audience Measurement, which gathered data from 900 more homes than Kantar, covering the total urban and rural Philippines.

Nielsen’s data showed GMA won 41.9% share of the total day people audience in Urban Luzon against ABS-CBN’s 30.1%. For Mega Manila, GMA also beat its rival with 43.7% share versus 26.8%, based on data from Jan. 1 to 26.

In terms of time slots, both ABS-CBN and GMA once again claimed dominance.

ABS-CBN said it reigned supreme across the board with 50% average audience share for prime time (6 p.m. to 12 a.m.) against GMA’s 29%; 37% for the morning block (6 a.m. to 12 p.m.) versus GMA’s 27%; 42% for the noontime block (12 p.m. to 3 p.m.) versus GMA with 31%; and 44% for the afternoon block (3 p.m. to 6 p.m.) against GMA’s 33%.

Its rival GMA challenged this, saying Nielsen data showed it garnered 34.8% audience share for the morning block versus ABS-CBN’s 30.9%; and 40.1% share in the afternoon block against ABS-CBN’s 34.2%.

Both networks likewise claimed to have produced the most watched shows for the month of January. ABS-CBN said its “FPJ’s Ang Probinsyano” had the number 1 spot with an audience share of 39.1%, while GMA said its “Kapuso Mo, Jessica Soho (KMJS)” topped Nielsen’s list for top-rating shows in the NUTAM.



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