Broadcast networks post lower revenues, earnings

MANILA, Philippines — The largest broadcasters in the Philippines are suffering from a revenue decline as economic headwinds linger, consequently hurting their bottom lines in the nine months to September.

During the period, media giant ABS-CBN Corp. widened its net loss by 77 percent to P3.15 billion from P1.78 billion in the same period a year ago. Although it was able to cut its expenses by eight percent to P16.13 billion, it also sustained a six percent drop in revenue to P13.52 billion.

The company attributed the revenue drop to the non-recurring sales from election placements last year, amounting to P757 million. It also endured an eight percent decrease in consumer sales to P8.69 billion as a result of fewer subscriptions to Sky Cable and The Filipino Channel.

Despite this, ABS-CBN proceeded to pursue its expansion, spending P1.1 billion for capital expenditures. It also broadened its reach in the digital space and international scene, distributing more than 381 titles to broadcast channels in Asia, Africa, Europe and the Middle East.

ABS-CBN’s financial struggles can be traced back to when lawmakers denied its bid for a fresh franchise to air on free TV in 2020.

Since then, ABS-CBN has moved most of its operations online, signing partnerships with digital giants Netflix, Spotify and Viu where it screens its films, music and shows.

Similarly, broadcast giant GMA Network Inc. saw its profit fall by half to P2.47 billion in the nine-month period from P5.1 billion during the same period in 2022.

Revenue declined by 18 percent to P13.77 billion, while expenses went up by five percent to P10.6 billion. The network blamed economic factors for this, saying advertisers are reducing their commercial placements due to elevated inflation.

“Household spending, which is one of the biggest contributors and key drivers of growth in the local economy, has weakened amid elevated inflation and rising borrowing costs. As a result, the major fast-moving consumer goods clients of the company which largely bank on the individual purchasing power have likewise scaled down their ad spending,” GMA Network said.

Inflation has averaged 6.4 percent as of October, well beyond the target range of two percent to four percent set by the Bangko Sentral ng Pilipinas.

Similar to ABS-CBN’s experience, GMA Network also attributed its revenue drop to the absence of political placements that lifted its earnings in 2022.