ABS-CBN sees continued growth in consumer sales

Posted at 05/14/2014 1:06 PM | Updated as of 05/15/2014 11:13 AM
ABS CBN Corp. Chairman Eugenio Gabriel L. Lopez III (center) answers questions during a media briefing following the company’s stockholders meeting, Wednesday. Lopez is flanked by ABS CBN Group CFO Rolando P. Valdueza and ABS-CBN Convergence head Carlo Katigbak. Photo by Jonathan Cellona for ABS-CBNnews.com

MANILA, Philippines – ABS-CBN Corp. expects that revenues from its consumer businesses will overtake advertising revenues in the next five to 10 years.

“Although a majority of our profits still come from advertising or traditional broadcast sectors, half of our revenues is already driven by consumer sales. We expect that trajectory to continue in the future. We expect that although advertising will continue to grow in the next five to 10 years, it will only represent 25 percent of our total revenues. A majority of revenues will come from the consumer sector of our businesses,” ABS-CBN Corp. chairman Eugenio Lopez III said at the company’s annual stockholders’ meeting on Wednesday.

Lopez said its new businesses, including ABS-CBN Mobile and Kidzania, are expected to boost consumer sales.

“We are moving away from reliance on advertising to consumer revenues. There is only so much growth you can get out of advertising. We want to monetize our content beyond just advertising by directly relating it to what consumers want and let them pay for it directly,” he said.

 

Consumer sales are also being driven by the firm’s paid TV, mobile, films, and merchandising businesses.

In 2013 alone, Star Cinema posted an estimated P1.4 billion in domestic revenues for four movies.

ABS-CBN Mobile was also launched in 2013 while Kidzania, an indoor theme park, is expected to open in 2015.

ABS-CBN also launched Jeepney TV, a channel airing past ABS-CBN shows, on cable last year.

Currently, advertising revenues make up about 57 percent of the firm's total revenues.

Carlo Katigbak, head of ABS-CBN Convergence, said revenues will also come from subscriptions on digital platforms.

“Over time, what you’re going to see is we’ll be producing more content for these platforms, but the revenues derived from that will not be advertising-driven but more subscription-driven,” he said.

These subscription services give ABS-CBN Mobile customers access to exclusive content.

For the first five months of operation, Katigbak said ABS-CBN Mobile attracted 300,000 subscribers. He said ABS-CBN Mobile aims to get 1 million subscribers by end-2014 and 2 million by 2015.

ABS-CBN is allocating P6 billion in capital expenditures this year, of which P2 billion will be allocated for SkyCable.

According to Lopez, ABS-CBN is in talks to sell SkyCable stocks to the public via an initial public offering (IPO), but no decision has been made.

“We’re looking at it, it’s not a foregone conclusion that we are going to do it…It’s just one of the alternatives to raise funds,” he said.

ABS-CBN posted a 25 percent increase in its net income for 2013 of P2.028 billion from P1.618 billion in 2012 on the back of a 15 percent rise in net revenues of P33.4 billion, compared to P28.9 billion the previous year.