Industry

GMA Network Partners with PLDT in Bid to Play Catch Up with ABS-CBN in Digital Shift

Can the partnership help the broadcasting company boost its revenues?
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GMA Network Inc. is finally ramping up its shift to digital as it ties up with PLDT Inc., the country’s biggest telecommunications company.

The two firms inked a technology, content, and distribution partnership that will include innovations from the telco giant, which are aimed to spur and enhance the media network’s digital transformation. The signing ceremony took place on January 9, Wednesday, GMA said in a disclosure to the Philippine Stock Exchange.

“This partnership is a clear statement that we are 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,” GMA Network Chairman and CEO Felipe L. Gozon said.

GMA’s decision to pivot to digital is notable, but not unprecedented.

ABS-CBN Corp., GMA’s main rival in the industry, already has a headstart in digital from its traditional broadcasting business by incorporating other products and services in its portfolio.

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Perhaps one of the most notable innovations ABS-CBN has introduced is the TV Plus Box, a television tuner that promises clearer picture and sound made possible through digital transmission. The device also offers free exclusive channels on top of all the free-to-air channels available in the country. The company launched it to the commercial market in 2015.

Apart from this, ABS-CBN has also tapped into customer experience as another business segment to offset falling advertising revenues industry-wide. They opened KidZania, an interactive indoor playground for kids, in 2013. Five years later they also launched ABS-CBN Studio Experience, an indoor theme park designed after the real-life studios of the broadcasting network.

Still, GMA’s effort to shift its business model to digital can help increase overall profits and remedy  falling revenues.

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ABS-CBN’s aggressive push to shift its revenue model has worked out so far for them. In the first nine months of 2018, the company generated revenues of P29.5 billion—with 49.5 percent of it or P14.6 billion coming from consumer sales and production.

This is a stark contrast to GMA’s, which still heavily relied on advertising during the first nine months last year. About 88.4 percent of its sales came from advertisements. (See infographic)

While GMA and PLDT Inc. did not provide specifics of the agreement, their key officials mentioned the partnership includes the upgrading of the quality of content and provision of new digital experiences to Filipino viewers.

“As we transform our business from being a legacy telco into the premier and most trusted digital enabler in the country, this 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,” said PLDT and Smart Chairman and CEO Manuel V. Pangilinan.

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Pauline Macaraeg
Esquire Philippines
Pauline is Esquire Philippines’ data journalist. Follow her on Twitter @paulinemacaraeg.
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