[ad_1]
Ever since Netflix hit the mainstream in the mid-2010s, traditional television was doomed to extinction. The rise of video streaming created the perfect storm for classic networks that also faced another challenge: the growing influence and presence of social media platforms.
The announcement by ABS-CBN, the Philippines’ largest television network, to duplicate digital efforts should not have been met with a whimper. After all, it just meant that the company was ready to take on the challenge of innovating and pioneering the local market.
Unfortunately, digital platforms weren’t the only challenges the broadcaster faced – political monsters were on his fence too.
On July 10, the House of Representatives rejected the network’s franchise offer, forcing the station off the air. Congress delayed its decision, although ABS-CBN applied for renewal as early as 2016. In the Philippines, television networks have to renew their licenses to operate every 25 years.
When the franchise expired in May without an opinion from Congress, ABS-CBN was given interim authority until a decision was made. In the end, the legislative body denied the station to go back on the air.
“We will continue to face tough times in 2020,” said Chairman and CEO Carlo Katigbak on Sept. 24 at the first shareholders meeting after the blackout. In August, the network had to lay off 5,000 employees, implemented pay cuts, and reduced scheduling efforts.
ABS-CBN decided to continue broadcasting its programs online. It currently has a presence on the main social media platforms (Twitter, Facebook and YouTube) and the last two attract the largest audience. According to data from the social media monitoring platform Social Blade, the two YouTube channels managed by ABS-CBN already had more than 40 million subscribers at the end of September.
Refocus on streaming
Even more promising has been its iWantTFC streaming platform, a renowned entity formed by combining its two over-the-top (OTT) products. “We merged them to cut costs mostly,” Katigbak said at the shareholders’ meeting.
ABS-CBN launched iWant as early as 2015 in an attempt to compete in the streaming service game. But it was only in the last two years that the company began funneling more money into this segment. In 2018, iWant rebranded and regularly produced exclusive shows for the platform. By 2019, the company had spent PHP 347 million ($ 7.17 million) on the streaming platform alone, according to data in its annual reports.
The effort seems to be paying off. ABS-CBN recently said that iWant already had 1.6 million monthly active users, although it was unclear how it defined ‘active users’. The company previously used different metrics. In 2019, it claimed that iWant had 11.3 million registered users. ABS-CBN declined to be interviewed for this story.
To encourage more subscriptions, the company introduced a three-tier subscription plan in September: free, standard, priced at PHP 60 ($ 1.20), and an ad-free premium plan of PHP 120 ($ 2.40). ). But despite increased numbers of subscribers, advertisers remain in a wait-and-see mode.
Advertisers are not convinced
“ABS-CBN TV’s previous ad spending will not carry over to other networks or digital,” said Hermie de Leon, managing partner of Havas Ortega Media Group.
De Leon believes that consumer brands still prefer traditional TV commercials, which is where their target audiences tune in most often. However, he sees more advertisers exploring digital video, especially online, “to make up for the lost reach of the ABS-CBN shutdown.”
De Leon further said that the industry is closely monitoring ABS-CBN’s performance online and that initial findings show that loyal ABS-CBN viewers are following them. “If the company has its [subscriber] validated data, more advertisers will be interested, “he added.
Andre Santiago, senior digital manager at Gobo Creative Philippines and a digital native, echoes the sentiment. He believes the company may have long-term potential, especially as the advertising industry is already moving in a “digital first” direction.
“I think the first thing they have to show is that they really attract the eyes,” he said. “Other platforms like YouTube and Facebook really show statistics, so once they have the same capabilities, brands can be more attracted.”
A long road to profitability
ABS-CBN will likely have to burn more money before making a profit. While revenue increased on average 14% year-on-year from 2016 to 2019, the segment has yet to gain weight. It also represents only about one-tenth of the company’s total revenue in the last two years.
The performance of the iWantTFC peers in the region – Viu and iflix – also shows no signs of encouragement. While the two have collectively raised around $ 460 million in the past five years, the platforms are not yet profitable. This is despite considerable growth in its subscriber base of 41 million and 15 million respectively.
For iWantTFC to survive, it has to attract more viewers to the platform quickly.
As for the tech-savvy population of the Philippines, there is reason to be optimistic. The country has at least 73 million Internet users, roughly 66% of its total population, according to social media agency WeAreSocial. Filipinos are said to spend 9 hours and 45 minutes online every day.
Read this: This startup wants esports content to be viable for everyone: Startup Stories
The biggest challenge to iWant’s success may be the cost of an internet connection. According to the World Bank, the Philippines has the fourth highest price in Southeast Asia at $ 6.30 for 500 megabytes of prepaid mobile data. That’s a lot for a country with a daily minimum wage of about $ 12. And the majority of ABS-CBN viewers come from the lower income classes.
The company will have to compete for the attention of those who can pay for its shows, a challenge considering big-name streamers like Netflix and HBO Go are also making forays into the market.
But the company could have found a back door. In a disclosure statement to the Philippine Stock Exchange on Tuesday, October 6, ABS-CBN announced that it will now broadcast some entertainment programs and movies on a recently renamed A2Z 11 channel, after signing an agreement with ZOE Broadcasting Network, the media arm of a local church called Jesus is Lord. No further details have been shared.
It’s safe to say that ABS-CBN has to capitalize on what it does best, local entertainment production, to survive. After all, it was the most watched television channel just a few months ago.
