ABS-CBN’s Carlo Katigbak

PREMIUM: Carlo Katigbak, the president and CEO of ABS-CBN Corporation, reflects on the rising importance of content exports and co-productions to the Filipino media group.

TV ASIA: The Philippines is seen as one of the Asia Pacific markets with the greatest growth potential. How has the advertising market been, both for your terrestrial outlets and cable?
KATIGBAK: The television ad markets continue to remain stable. Cable ad revenue is declining. There is increasing ad spend on digital platforms, but that is not yet impacting terrestrial ads.

TV ASIA: What are your primary non-advertising sources of revenue, and how are you looking to drive those?
KATIGBAK: Subscription sales are the largest contributor to non-advertising revenues, accounting for 33 percent of total revenues. These are driven mainly by cable subscriptions, broadband subscriptions (fixed line and mobile), and the sales of our international channel TFC.

The next largest source would be box-office revenues from our theatrical releases.

We have [been developing] sources of revenues, including home-shopping sales through a joint venture with the Korean company CJ; theme-park admissions from our current investment in Kidzania, which is a Mexican franchise; and an emerging e-commerce platform for both durable goods and digital content.

TV ASIA: Tell us about the strategy you wanted to put in place when you succeeded Charo Santos-Concio at the helm of ABS-CBN. What were your primary objectives for the group?
KATIGBAK: One objective is the transition to an agile digital company. We are converting nearly all of our analog delivery platforms into digital platforms, including a switch to digital terrestrial television (DTT). To date, nearly 70 percent of the market in greater Manila is receiving our signal on a digital device—DTT set-top box, cable set-top box or satellite set-top box.

We also aim to create new content for the emerging audiences. We’ve put in place a plan to start producing content meant for online viewing and mobile viewing. We are setting our sights on producing content for an international audience as well, believing that Filipino creative and performing talent is truly world-class.

In an era where content creation is increasingly democratized, we want to position ABS-CBN as a hub for creative talent. We hope that anyone with a great idea can come to us and we will offer our help in consumer research, production, distribution and monetization.

TV ASIA: How are you maintaining ABS-CBN’s ratings leading in the competitive terrestrial space?
KATIGBAK: Understanding the audience is key in producing content. ABS-CBN has enjoyed a significant boost in TV ratings with the help of ABS-CBN TV Plus, the country’s first digital terrestrial television product. According to data from Kantar Media, ABS-CBN’s audience share in Mega Manila increased to 36 percent in 2017, compared to 31 percent in 2015, as more households are able to experience a crystal-clear viewing experience with ABS-CBN TV Plus. ABS-CBN’s ratings in Mega Manila also rose to 15 percent from 12 percent in 2015.

TV ASIA: How are your cable assets performing, both the platform and the channel?
KATIGBAK: The platform is performing according to expectations, although we’ve seen a significant consumer shift to broadband services, which now account for most of the growth.

Among our cable channels, five are in the top 15 most viewed, with our all-movie channel Cinema One still leading.

TV ASIA: Content creation is a vital part of your business. How are you maintaining innovation within your production team, and fostering a new generation of talent?
KATIGBAK: We continue to tap and discover new talent for digital content creation, and encourage them to try new ideas in a no-fault environment. Our younger employees are also invited to join our “millennial panel” during content pitches.

TV ASIA: Consumption habits are changing worldwide. What trends are you seeing in nonlinear viewership among your audiences?
KATIGBAK: The market is still small for VOD streaming in the Philippines, as continuous access to the internet is still a barrier (due to bandwidth costs and the consistency of the signal on mobile phones).

We expect a change in viewing behavior once internet access becomes more affordable and the bandwidth is faster.

As Filipinos by nature are very relational, it is important for us to bond with our families. That is why traditional media like free-to-air TV and cable remain relevant to us.

We remain focused on gearing for the future and being ready in the category with [the online platforms] I Want TV (local) and TFC.tv (international).

TV ASIA: Tell us about the gains you’re seeing in your international business, especially in terms of finished program sales and format sales.
KATIGBAK: OTT is the biggest story in Asia. OTT platforms are aggressively tapping us for the licensing of content and various partnerships, including co-production opportunities.

There is also increased awareness and appreciation of Filipino dramas in the Southeast Asian region, translating to multi-year volume deals, and the opening of new territories in 2017.

TV ASIA: What are your key objectives for the group in the next one to two years?
KATIGBAK: Viewing behavior continues to evolve as communication technologies advance. [We aim] to continue to address the changing media and entertainment landscape through content innovation, understanding our audiences and developing deeper and more meaningful relationships with our consumers across all the businesses we are in. It is through these efforts that we can truly be in the service of the Filipino.