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ATF: Philippines Broadcasters Mull Country’s Unique Strengths and Challenges

Top broadcasters from the Philippines gathered at the Asia TV Forum and market on Tuesday to discuss the state of the industry. The Philippines is the country in focus at this year’s Singapore Media Festival.

Participating in the discussion, moderated by HOOQ CEO Peter Bithos, were Vincent Reyes, CEO of TV5, Guido Xavier R. Zaballero, chief marketing officer of Cignal TV, and Carlo Katigbak, CEO of ABS-CBN.

“We have two big strengths,” said Katigbak. “A fast-growing economy. We’ve been registering a 6% GDP growth per annum over the past three or four years. Another strength for us is that the Philippines is largely an English-speaking market, so we take a lot of western content as is.” Katigbak provided the example of the Philippines theatrical business where Western content accounts for a 70% market share.

“On the flip side, the economic growth really hasn’t filtered through to the lower income bracket,” said Katigbak. “70% of the population are considered economically class C or D.”

“We are a country of a 100 million of which 5-10% are financially capable. They have the purchasing power,” Zaballero said. “There are certain policies that prevent foreign companies from really investing in the country fully, as compared to other countries in our region.”

Zaballero sees the Philippines as a large population that is underpenetrated. Katigbak revealed that on the DTH front ABS-CBN tends to serve a lower income bracket. Katigbak said, “We do not see that segment of the market cord cutting. The ARPUs are much lower, $1-2 a month. It’s a stable customer base and there is growth in the sector. At the higher end of the market, where we operate our cable TV business, that’s where we’re seeing cord cutting happening. The subscriber base has been on a decline for the past three years. There is going to be some cannibalization precisely because the purchasing power of our market is quite low. The profit pools in the Philippines are still going to be driven by advertising rather than subscriptions.”

Zaballero said: “With the pricing where it is at right now, Netflix is definitely priced for the more premium market. They really have to take a serious look at that kind of pricing if they really want to drive it down. But with the cost of their content and production I really don’t know if they are looking to go down that road.”

Reyes feels that sport is an underserved category in the country. He pointed out that in Southeast Asia, the average advertising spend on sports is 8%, whereas in the Philippines it is only 4%. And TV5 is betting big on esports.

“We got on the esports horse about three years ago. We were the first free to air network to televise a major international esports tournament. We are doubling down on it,” Reyes said. He also feels that the market for women’s sport is underserved. At the last Asian Games, The Philippines won five gold medals, all of them by women.

Looking to the future Zaballero said: “The task really is to bring an international mindset and skill set to the Philippines. The stories are there, it’s just how we tell them that we need to enhance.”

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