Exclusive Interview: GMA Network’s Felipe L. Gozon

PREMIUM: Chairman and CEO Felipe L. Gozon shares with TV Asia how he is positioning GMA Network today and stresses the growing importance of the company’s international business.

TV ASIA: What’s driving the success of your local channels?
GOZON: We have a winning team that puts our audience front and center in developing our content and programming. Our teams are vigilant in monitoring ratings results, audience profiles, audience feedback, as well as emerging trends. This allows us to develop and produce content that is relevant, responsive, and resonant to our market.

We take pride in being the most trusted network in the country. We remain committed to delivering original, innovative and game-changing quality content that delights our viewers.

TV ASIA: With the Philippines being such a mobile-heavy-usage market, how are you serving your audiences on multiple screens?
GOZON: We ensure that our owned and earned media strategies for digital platforms are, first and foremost, relevant, responsive and measurable. We apply content strategies that are relevant to each platform’s audience, with all being accessible via mobile. Our website, which continues to contribute to our digital revenue growth, had 122 million unique browsers and 1.6 billion page views in 2018. Based on January figures, 86 percent of devices used to access gmanetwork.com were mobile devices. We also have a very engaged online community and a strong presence on social media with GMA Network’s Facebook page at 17.5 million likes, Twitter at 1 million and Instagram at 1.1 million. GMA News’s Facebook page [has] 12.8 million [followers], Twitter 5.4 million, and Instagram 964,000.

Full episodes of our select archive titles, as well as mid-form and short-form content, are available for viewing on YouTube and our GMA app. Select current shows are also available for catch-up through our paid OTT platform partners.

Further, we have several things in the pipeline that we think will be highly relevant and responsive to the content consumption needs of the local mobile market.

TV ASIA: How has the local advertising market been?
GOZON: Advertising expenditure mirrors what is happening on the economic front. Concerns about the impact of the Train Law (new tax legislation which took effect on January 1, 2018), especially on fuel and sugar-based products, affected ad spending in the first three quarters of the year. Because of the restored spending in the last quarter of 2018 [and into] 2019, incremental election spending, as well as the 6.5 percent economic growth forecast for the country, we are confident that 2019 will be a good year.

TV ASIA: There is much conversation globally about the viability of the 30-second spot. How are you working with your advertising clients?
GOZON: Though the 30-second spot remains viable for television and online for us, we provide a lot of branded solutions for our clients. GMA is the preferred choice for branded content by our advertisers, and we are seeing more and more of these branded initiatives being renewed season after season. GMA has also won campaign pitches that require the use of relevant platforms (more than just having multiple platforms) beyond the 30-second spot, specifically through targeted executions on digital, radio, on-the-ground, out-of-home, etc. These campaigns, whether strategic or tactical, have consistently been results-driven, which may be the reason why more of these campaigns are rolled out with GMA.

TV ASIA: The Filipino telcos have become quite active in the video business, and major OTT platforms are present in the country. How are these services impacting the overall Filipino media economy, and specifically GMA’s positioning?
GOZON: Today, television remains the preferred source of delivered video content in the Philippines. Free-to-air TV viewing levels in national urban Philippines have in fact increased in 2018 compared to 2017, with GMA’s viewership also increasing.

GMA’s superior audience appeal on television also manifests online. In the same way that we study our television audience behavior, we also apply this discipline to online viewing behavior, and our online video content and distribution strategies are grounded in data analytics and viewer insights. With this approach, we are able to generate both revenues and profits from ad-based and subscription-based OTT platforms.

For ad-based OTT, our YouTube channels’ watch time in 2018 hit 28.5 billion minutes, making GMA one of online video’s top 50 channels worldwide. On the paid OTT side, we license our titles to OTT platforms. iflix shared that one of our top-rating series, Encantadia, has reached over 2 billion views on its OTT platform. Our social media accounts offer bite-size videos that are viewed by millions daily.

Based on Nielsen’s viewership data, what is being affected by these OTT platforms and has seen a steady decline is cable viewership.

A few years ago, we saw the emergence of subscription-based OTT platforms locally but often bundled with other services such as broadband connectivity or as value-added services to mobile subscriptions. Last year, we saw some of these OTT players integrate ad­based plays into their services. This may be because the Philippine market is still largely a free content market where a pure pay-TV play has struggled to show a profit.

TV ASIA: Tell us about your recent deal with the local telco operator PLDT.
GOZON: Our recent deal with PLDT is a technology, content and distribution agreement. We see this partnership as true convergence leveraged on the strengths of both GMA and PLDT. More information about this deal will be disclosed as we progress.

We are optimistic that after our digitization project is fully implemented by the middle part of this year with the added values from our patented digital devices (i.e., recording, messaging, interactive capabilities, etc.), we will be able to generate substantial, additional revenues from it.

TV ASIA: How is your international business? Why do you think audiences as far away as Africa and Latin America are responding to GMA’s storytelling?
GOZON: Our consolidated international distribution business, comprised of pay-TV subscription, syndication and online publishing, contributes substantially to both our top line and bottom line. We distribute both linear and nonlinear content across 60 countries, including North America, MENA, Europe and AsiaPac, on multiple platforms (cable, DTH, IPTV, OTT and mobile). It is truly gratifying to find that the stories we tell resonate in so many other countries. Perhaps it’s because the plots of GMA’s dramas are anchored in universal themes like love, family, courage amidst adversity and so on. These themes reflect our shared human experiences, wherever we may be in the world.

TV ASIA: What are your other major revenue drivers, outside of the free-to-air advertising business?
GOZON: Our geographical expansion through our international distribution business continues to contribute significantly to our core revenues. Radio, OTT licensing and advertising, and online publishing revenues are all growing. We also see growth contributions coming from our movie, music and events productions.

TV ASIA: There have been reports in the past about possible new investors in GMA. Is the company seeking outside investment at present or other strategic alliances?
GOZON: We do seek and are always open to value-unlocking strategic alliances. At present, we do not need outside investors for funding. While the three major shareholder groups of GMA Network are not peddling their shares, they are open to considering offers for their shares at the price acceptable to them.

TV ASIA: What are your key strategic priorities for the company in the 12 to 18 months ahead?
GOZON: Our key strategic priorities are maintaining our position as the country’s leading broadcast network through responsive programming and superior content creation, geographical growth through strategic worldwide and multiplatform content distribution and the generation of new revenue streams via digital solutions, among others.