ABS-CBN braces for a Willie Revillame shock wave
AS I WRECK THIS CHAIR By William M. Esposo
The Philippine Star 2010-11-07
It is not our intention to comment on the legal issue between ABS-CBN and its former prized talent — Willie Revillame. Other than it being a case of sub-judice, the matter is of interest only to the two contending parties.

What is not a case of sub-judice is the projected effect Willie Revillame’s transfer to ABC-Channel 5 will have on the duopoly of ABS-CBN and GMA Network on the Television Ratings and Ad Revenues. Of particular interest to your Chair Wrecker and the television viewing public is the looming possibility of ABC-5 becoming a competitive third national network, even possibly displacing either ABS-CBN or GMA Network.

The last time there was a third competitive national network was during my tenure as RPN-9 President and CEO from October 1, 1989 to September 30, 1992. By the time my management team had left the network, RPN-9 primetime sales was already topping industry second placer GMA Network. GMA Network retained overall second place in ad revenues only because we had not yet developed our daytime slots.

The refusal of the Regional Trail Court and more recently the Court of Appeals to grant the ABS-CBN prayer for a Temporary Restraining Order (TRO) opened the way for Revillame’s return to television via ABC TV-5. The ratings that Revillame’s new show on ABC TV-5 — Willing Willie — had generated stirred very noticeable reactions from ABS-CBN.

Per advertising industry media experts whom we consulted, the October 29, 2010 Nielsen Overnight Report showed the following comparative performances between ABC, ABS-CBN and GMA Network in terms of overall Channel Shares and the timeslot where Willing Willie is programmed:

Overall Channel Shares

(National, 6 a. m. to 12 midnight)

ABS-CBN — 36.9%, GMA — 32.2%, ABC — 12.6%
(Mega Metro Manila, 6 a.m. to 12 midnight)

ABS-CBN — 29.8%, GMA — 37.7%, ABC — 15.4%

Comparative Program Ratings


TV Patrol — 13.0% (ranked #5), 24 Oras — 10.4% (#8), Willing Willie — 7.1% (#19)

(Mega Metro Manila)

TV Patrol — 9.0% (#13), 24 Oras — 10.8% (# 8), Willing Willie — 8% (# 15)

What are significant in these ratings are, as follows:

1. ABC has established a foothold in the Top 20 programs with Willing Willie’s ranking of #15 in Mega Metro Manila and #19 nationwide. For over a decade now, the duopoly of ABS-CBN has dominated the Top 20 Programs. Breaking into this once exclusive club is a good indication for the future of ABC.

2. The ABC Channel Share of 12.6% nationwide and 15.4% in Mega Metro Manila is a noteworthy increase. A double digit Channel Share translates to added ad revenues and justifies the raising of the network ad spot rate.

The recent revamp of TV Patrol where Noli de Castro and Korina Sanchez were returned as anchors shows the concern of ABS-CBN over the recent ABC developments. Gabby Lopez and his management team are aggressively addressing the new developments. They will obviously try to nip the ABC offensive in the bud.

The concern of ABS-CBN is not just focused on their program opposite Willing Willie which is TV Patrol. Their greater concern is the propulsion a successful Willing Willie will give the rest of ABC primetime programs. If Revillame approximates his Wowowee rating and revenue successes in ABC, that will provide the rest of ABC primetime programs with a base to get better ratings and revenues.

Being a daily show, Willing Willie has to be worrisome for both ABS-CBN and GMA Network. A daily show that generates across the board good ratings will serve as the foothold for launching a more aggressive marketing campaign to get more of the ABS-CBN and GMA Network shares of market.

When Manny V. Pangilinan (MVP) decided to buy ABC and it was reported that he was ready to invest P10 billion to make it fly, my initial reaction was that Manny should be ready to lose easily another P5 billion before ABC can start to deliver a return on his P10 billion investment. A P10 billion investment will entail a cost of money of around P1 billion per year and there was no way I could see MVP make P1 billion in annual net revenues within the first five years.

ABC’s first major hurdle will be to generate gross sales of more than P1 billion a year. No third network has ever registered an annual gross sale of over P1 billion. It is doubted if ABC is currently generating over P750 million in annual gross sales. Considering the high cost of inputs and operations these days, gross sales of over P1 billion a year may not even result in a net income for ABC.

A stiff tri-network fight will tend to also increase the talent fee demands of the top entertainers. The same will apply to the talent fees or salaries of other key personnel like directors, producers, technicians, writers and so forth. The network costs will go up while the revenues of each network will tend to encounter stiffer resistance in their attempt to acquire a bigger market share.

Thus far, this discussion has been confined only within the realm of the Free TV Market. There is a bigger reality hounding Free TV all over the world and this is the reality of their continuously diminishing share of audience and market. Cable TV, new media, the internet, changing media habits have all eroded the once mighty audience share of Free TV.

It is said that in business the two worst situations your company can find itself in are to have an increasing share in a continuously diminishing market or a diminishing share in a continuously diminishing market. This is what will confront ABS-CBN, GMA Network and ABC in the years to come.

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