Inside story: QTV’s phenomenal achievement
HIGH GROUND By William M. Esposo 2006-01-02
It can be called no less than a phenomenal television achievement when INQ7 parent company GMA Network launched its second free television channel – QTV – last November 11, 2005. In two weeks time, QTV overtook over 15 VHF, UHF and Cable television channels that are all competing for ratings and shares in the television ad spend and placed 3rd in overall ratings.
Erstwhile ratings 3rd placer ABC regained its lost position for the week when it hosted the television coverage of the 23rd SEA Games. However, after the SEA Games, QTV regained its claim to being the 3rd most watched television channel in terms of overall ratings.

As of week 47/November 20 – 26, 2005, the overall (6:00 am to 12:00 midnight) ratings of competing TV Channels were as follows:

#1 – GMA-7 - 16.8 %
#2 – ABS-CBN- 2 - 14.7 %
#3 – QTV-11 - 1.2 %
#4 – ABC-5 - 1.1 %
#5 – Studio-23 - 1.1 %
#6 – RPN-9 - 0.7 %
#7 – IBC-13 - 0.3 %
#8 – NBN-4 - 0.3 %
#9 – Net-25 - 0.2 %
# 10 – MTV Philippines - 0.2 %
# 11 – Cable (Total) - 3.5 %

By week 50/December 11-17, the average (total day overnight household) ratings of competing TV Channels were as follows:

#1 – GMA-7 - 17.5 %
#2 – ABS-CBN-2 - 14.6 %
#3 – QTV-11 - 1.3 %
#4 – RPN-9 - 1.0 %
#5 – ABC-5 - 1.0 %
#6 – Studio-23 - 0.9 %
UHF (Total) - 1.5 %
Cable (Total) - 5.0 %

The QTV achievement underscores the following realities in the estimated P15 billion a year (ad spend) television industry:

1. The weakness of the TV industry players – It can only be a measure of weakness and vulnerability when long existing channels like ABC and Studio-23 can be overtaken in two weeks by a new kid on the block like QTV. In a more competitive and stable TV industry, a new channel like QTV would have first taken a beachhead, like an initial #7 position, before reaching the #3 leader position. The ratings disparity between leaders GMA and ABS-CBN and ABC and Studio-23 highlights this weakness.

2. The power of a thematic focus – The QTV focus on the women market/audience allowed it to grab the #3 ratings position. It is not surprising that QTV success architect Manuel “Mekoy” Quiogue took inspiration from the success of the Lifestyle Cable Channel in the crafting of the QTV formula.

Mekoy, who I first met some 35 years ago when he sat down with us during the preparations of the ad campaign of his family’s business, shared with me these insights on how QTV was positioned: “We looked at various possible positioning options, like a news channel, a sports channel, an action channel, a youth channel, like Studio 23 and others. But we concluded that having a channel specifically for women would offer the best potential, one because women watch television the most and two because women’s products comprise the biggest share of ad monies – because women control the family’s purse strings.”

Mekoy added: “We saw the relative success of the Lifestyle Channel and how it had been able to attract advertisers of women’s products despite the lack of ratings. So we saw the potential of the women’s market but broadened it to target not just upscale women like the Lifestyle channel does."

GMA Network had planned to launch a second channel as early as 2001, using their UHF facilities. When Mekoy joined GMA, coming from ABS-CBN where he engineered the launch of Studio-23, the plan for a second front was pursued.

“It has long been the plan of GMA to have a second channel, particularly since GMA programs were starting to achieve full loads most of the year. The major considerations were that the station should result in incremental business and also provide an additional platform for GMA artists." Mekoy revealed.

"QTV was conceived for many reasons – to have another platform for artists, to be competitive to ABS-CBN in attracting stars, to take advantage of the incremental revenues that a second channel could generate, and to offer a channel compatible to GMA’s market and thereby be able to catch advertisers who could not be accommodated in GMA because of its current loading levels." He added.

The launch of QTV carried with it attendant risks – the channel may end up eating into the ratings and market share of its own mother network. In the tight ratings war between GMA and ABS-CBN, should QTV eat into 3 to 5% of the GMA ratings, that development could well allow ABS-CBN to regain the premiere position.

Marketing has been likened to war and we all know about the big German blunder when Hitler opened a second front in Russia during World War II. The cream of the German army was decimated in the Russian Front and doomed the Third Reich. QTV could end up doing the same to its mother network.

It was thus a bold marketing maneuver for Mekoy and his team to launch QTV, as bold as Gen. Douglas MacArthur’s amphibious landing at Inchon during the Korean War or when Alexander battled a Persian force easily ten times larger than his army and won. Mekoy realistically risked producing two spectacular failures.

Like all great battle commanders, Mekoy took the big risk but provided safety mechanisms to prevent the cannibalization of GMA ratings and market share. “We‘re making sure that we are counter-programmed to GMA. We try to promote QTV more heavily outside of GMA like print, outdoor, radio and even non-trad media." Mekoy explained his safety program against cannibalization.

Thus far, the numbers support the wisdom of Mekoy’s daring maneuver. QTV has taken the 3rd place and GMA remains the #1 TV channel.

ABS-CBN, which led the TV industry from 1987 to 2003, has found itself buffeted on top and below by channels that belong to its foremost competitor. ABS-CBN Chairman Gabby Lopez III must feel like Hitler, one week before the German Fuehrer committed suicide, when his capital was being assaulted by Allied forces on the West and Russian forces on the East. ABS-CBN is #2 with GMA-7 on top of it and GMA’s QTV on #3 position right behind it – the stuff paranoia and nightmares are made of.

Theoretically, the more QTV ascends the ratings chart (and gains more market share) – the more it will tend to affect the #2 channel. QTV success hurts 2nd placer ABS-CBN more than leader GMA. It also happens that ABS-CBN ratings are generated more from women viewers, precisely the target audience of QTV.

The developments could not have come at a worse time for Gabby Lopez and ABS-CBN. The Lopez Group has been undergoing financial difficulties. ABS-CBN, which has traditionally been one of the most consistent money makers of the Lopez Group, has already undergone two retrenchment episodes.

Yet the financial problem is a lesser problem compared to the loss of the top general of ABS-CBN, Freddie Garcia, who retired two years ago after having suffered a mild stroke. The absence of Freddie showed how pivotal he was to the network success. In his absence, Freddie’s staff is unable to put together a battle plan that somehow indicates recapturing the #1 position that ABS-CBN lost to GMA.

Gabby can always raise money to cope with a financial shortfall. But where does he get the kind of generalship that Freddie injected into ABS-CBN which it now needs very badly if it is to survive the GMA assault on two fronts?

Mekoy Quiogue, who was with ABS-CBN until 2002, would have been the perfect replacement for Freddie Garcia. What Mekoy could have done for ABS-CBN, he instead now does for GMA.

You may email William M. Esposo at:

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