The broadcasting arm of Lopez Holdings Corp. aims to solidify its lead in the digital television arena by investing more than half a billion pesos in infrastructure and programming rights this year to strengthen its network’s digital coverage in key cities in the Philippines.
After the successful launch of its digital box ABS-CBN TVplus on Wednesday, executives of the media conglomerate said the company now intends to cement its primacy on the digital space by capturing roughly 5.1 million television-viewing homes in the next couple of years.
“We started to invest in digital space in 2008. Our investment since then is pegged at P3 billion, which covers Mega Manila, Central Luzon and North Luzon. Definitely our focus is on areas where our signal is not that strong,” ABS-CBN Group CFO Rolando P. Valdueza said.
He added that, “As we grow—and we’ll grow nationwide—definitely it will require some additional investments. This year, we have to go to other provinces, like Cagayan de Oro, Bacolod, Iloilo and Davao, the key cities and other provinces. Based on our estimate, it will require about P600 million.”
The investments needed to completely “digitize” the entire
country would be higher, he said, noting that his company will still have to study how the market responds to the initial offering.
“The midterm goal is to hopefully address the areas where we have bad signal. Hopefully, there will be upward movements on ratings, which, hopefully, translate to higher revenues,” he said.
ABS-CBN TV plus is currently available in areas, such as Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, Nueva Ecija, Tarlac, Pangasinan, Benguet and Metro Cebu. ABS-CBN Convergence Inc. President Carlo Katigbak said there is a huge potential in the digital space, explaining that the new offering would not shrink the market of cable operator Sky Cable Corp.
“There are 17 million TV homes in the Philippines and 50 percent of that doesn’t get a good TV signal. In a worldwide sense, pay TV accounts for 60 percent the total TV homes. We are far from that. There is room for growth for both,” he said. “The current coverage for TVplus is only 30 percent of the total market. So, we will have 15 transmitters, all in all covering roughly 30 percent of the TV households.”
The new technology promises to deliver “dramatically clear picture and sound that is comparable to seeing a movie on DVD, a far cry from the prevailing analog system.”
ABS-CBN TVplus also airs four more exclusive free-to-air channels that cater to different audiences, plus all the free TV channels available via digital transmission.
Valdueza said his company is aiming to sell 1 million set-top boxes this year, noting that each digital box costs P2,500, but requires no monthly dues.
“We are looking at exploring other potential business models for the box,” he added.
ABS-CBN is the first TV network to offer the product in the country, a few months after the National Telecommunications Commission released the implementing rules and regulations for the country’s migration to the Japanese standard for digital terrestrial television broadcasting.
There will be a “transition period” during the implementation of the new standard. This means that both digital and analog transmissions will be used at the same time. After a few years, the regulator will terminate all the analog television services in the country.