Europe-PH News

Bloomberg Media Group and Cignal TV, Inc. signed yesterday a multiple-year contract for a partnership that created Bloomberg TV Philippines, a 24-hour English business news channel that analysts said could eat into the pie where homegrown cable network ABS-CBN News Channel (ANC) currently has the largest share.

The pay-TV channel is scheduled to begin broadcast in June at the earliest, or in the third quarter of the year, MediaQuest Holdings Inc. President and Chief Executive Officer Emmanuel C. Lorenzana said during the launch.

Bloomberg TV Philippines, which will be exclusively carried by Cignal, will feature more localized content to differentiate itself from the Bloomberg Television Channel that is already on Cignal’s grid.

TV5 may also carry 35-40 minutes of content from Bloomberg TV in English, Mr. Lorenzana said.

“The partnership with Bloomberg Television heralds a new era in Philippine television, in which business information is set to be in the front and center of a rising Philippine economy,” PLDT Chairman Manuel V. Pangilinan said in a statement.

Launched only in 2009, Cignal -- the cable TV business of MediaQuest, which is owned by Philippine Long Distance Telephone Co.’s (PLDT) Beneficial Trust Fund -- has already threatened SkyCable Corp.’s dominance in the world of pay television.

Cignal Chief Operating Officer Enrico A. Reyes, Jr. said the country’s direct-to-home pay TV provider had 600,000 subscribers at end-2014. Its Philippine rival, SkyCable, which exclusively carries ANC, has 842,000 subscribers, including via broadband, according to parent ABS-CBN Corp.’s regulatory filing.

“What it can do to Cignal by offering more content is it might attract viewers to switch to Cignal. By extending its offerings and adding new channels, it becomes more attractive especially for more people,” Alexander Adrian O. Tiu, research analyst at AB Capital Securities, Inc., said in a phone interview.

Cignal’s subscriber base is 65% pre-paid and 35% post-paid, with the latter being the higher-end segment, according to Cignal’s Mr. Reyes.

Its subscriber count could breach the one-million mark in the middle of the year and 1.2 million subscribers by the end of 2015, he said.

“A lot of people want to switch but they ask, do you have a news channel? So they keep asking that. So now we provide a news channel. So we’re able to provide something they want and also grow the higher market segment,” Mr. Reyes said.

‘THE MORE, THE MERRIER’
SkyCable President and CEO Carlo Joaquin Tadeo L. Katigbak and ABS-CBN Corp. Chief Financial Officer (CFO) Aldrin M. Cerrado could not be reached for comment for this story.

In a briefing last week, however, ABS-CBN Chief Strategy Officer Raymund T. Miranda, had said that the broadcast giant welcomes competition in light of the recent launch of CNN Philippines, the localized version of the CNN news channel.

“We don’t necessarily think of these developments. It allows us to focus on what we’re delivering on our audience. We’ll see if there are opportunities to expand, tweak, grow, expand, etc.” Mr. Miranda said.

“The more the merrier,” ABS-CBN Group CFO Rolando P. Valdueza had said during last week’s briefing.

CNN Philippines President Benjamin V. Ramos declined to comment on the partnership, only saying yesterday: “Ours is general news, while theirs is business-focused. And we provide CNN Philippines through free TV, while they will provide through pay TV. Let us just leave it like that for now.”

Luis A. Limlingan, business development head at Regina Capital Development Corp., said in a phone interview that the battleground for the cable networks may be narrow, with only half a percent of the over 100-million Philippine population investing in the stock market.

“To be quite honest, it might be difficult [to have several news channels]. There’s enough market base, but it’s pretty small for another new channel,”Mr. Tiu said.

At the same time, he said, TV business has a tremendous upside. “If you divide the total population by an average of four people per household, that’s around 25 million. That’s still a penetration rate of less than 10%. There’s a lot of potential if you base it on penetration rate,” Mr. Tiu explained.

Astro C. del Castillo, managing director of First Grade Finance, Inc., said: “Demand for pay TV is increasing because of the improving economy, improving purchasing power of consumers.”

The business community agrees.

“Given the country’s increased business attraction for foreign investors, it is essential to get business and investment information regularly and accurate. From that point of view, getting more media mileage is good for the Philippines,” European Chamber of Commerce of the Philippines Executive Vice-President Henry J. Schumacher said in a text message.

The entry of a new player could also mean cheaper pay TV subscription. SkyCable offers a cable TV plan ranging from P299 to P1,999 per month. It also charges a one-time installation fee of P1,599. Cignal, on the other hand, offers plans ranging from P390 to P1,590 a month. It recently launched a high-definition prepaid TV viewing package for P100.

With majority of PLDT’s revenues still coming from wireless and landline services, the Bloomberg-Cignal tie-up will have “minimal impact” on PLDT’s top line, Mr. Tiu said, but it strengthens the pay TV provider and provides the dominant telco another platform to expand its offerings and services.

“They could offer a phone bundle with Cignal and Internet and that might yield higher value than just a SkyCable and Internet. In a strategic perspective, it allows them more flexibility in the future by improving their offerings... Cignal will become much more marketable,” Mr. Tiu said.

Source: Business World Online