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TV networks’ ties seen to boost their finances

RECENT partnerships among television (TV) networks are expected to improve the media companies’ financial performance and widen their audience reach, but questions remain such as on revenue sharing and content rights.

“For the past few years, the landscape of TV has really changed, and so there are businesses, including us, that have realized that to partner with people who or companies who are very good at their craft will also benefit us,” TV5 Network, Inc. President and Chief Executive Officer Guido Xavier R. Zaballero told BusinessWorld in a recent interview.

“We are all running our businesses. At the end of the day, we are going to perform in terms of our profit-and-loss statements,” he added.

Last month, ABS-CBN Corp. and TV5 forged a content supply agreement that will run for the next five years.

Mr. Zaballero said the longer contract is a way for both networks to show their commitment to each other. The networks’ previous deal needed to be renewed every three or six months.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the partnership could boost ABS-CBN’s financial showing after the company lost its franchise.

“Following the loss of its franchise in 2020, ABS-CBN has indeed been adapting its operations to remain viable in the industry. One of the strategies they pursued was forming partnerships with other local networks, including GMA Network and TV5, to supply and share content,” said Mr. Arce.

ABS-CBN has also inked several partnership deals with GMA Network, Inc. such as the one in January when they signed a co-producing deal for television and streaming provider Viu and the one signed in April, which allowed GMA to stream its programs via ABS-CBN International, Inc.’s iWantTFC.

“These partnerships allowed ABS-CBN to continue reaching a wider audience and maintain a presence in the broadcasting landscape,” he added.

For Mr. Arce, the direction and extent of future collaborations will depend on factors such as the evolving media landscape, market conditions, and individual company strategies.

“However, it is not uncommon for media companies to engage in partnerships to leverage their resources and expand their reach,” Mr. Arce said.

“On the positive side, collaborations can potentially lead to cost-sharing and reduced production expenses, as well as increased advertising revenues through broader distribution channels. Additionally, partnerships may allow companies to tap into new markets or audience segments, which could contribute to revenue growth,” he said.

“On the other hand, partnerships can also involve complexities and challenges. Companies need to carefully navigate issues such as revenue sharing, content rights, and brand positioning. Furthermore, depending on the terms of the partnerships, there may be financial implications related to revenue sharing and investment commitments,” he added.

Mr. Arce said the financial impact of these partnerships will vary depending on the specific agreements and will ultimately depend on the success of the joint projects, and the overall market dynamics.

Meanwhile, Mr. Zaballero said TV5’s first-half results improved versus the prior year in terms of daily ratings and advertising revenues.

“I think what I can share right now is that our overall day ratings have improved. We are actually making a lot of improvements across most of the days in our ratings,” said Mr. Zaballero.

TV5 is currently showing on its network ABS-CBN’s TV programs such as “Batang Quiapo,” “Iron Heart,” and “Dirty Linen.”

Aside from the five-year content supply agreement, TV5 and ABS-CBN have separate co-production deals, which are seen to help the latter in populating specific time blocks.

Asked how the advertising revenues of the network performed over the past six months, Mr. Zaballero said: “Our advertising revenues improved versus [the] previous year. We have really seen an improvement across most of our day parts in which some showed double-digit improvement.”

However, TV5 is still operating in the red, which Mr. Zaballero said the network is planning to turn around in the next few years.

“We have also seen an improvement in our revenue delivery. What’s critical now for us is that we maintain our cost base because as the chairman has always expressed, the goal really is to bring TV5 to a point, of course, we want to be profitable,” he said.

MediaQuest Holdings, Inc. operates TV5. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Justine Irish D. Tabile

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