There is a common notion that in the television and broadcasting industry, high rating means profit, meaning, networks have to please the market in order to establish their credibility as a brand, hoping that eventually companies will choose to advertise through them. But how exactly do they please the market? There is one concrete answer to that: give them what they want. However, as people, we are subjected to whims and difference in our preference, so it’s really hard for the networks to know what exactly sells and what doesn’t. Eventually, these networks have developed a system, varying minimally but are still essentially the same. It can be easily describe as, “If it works, then let’s do it again.”
Aside from market research, which is not exactly a simple task or a probable sustainable strategy, there are only a few ways of determining what exactly the market wants. So, networks stick to what they know is effective. One strategy is when they bank, even sometimes solely relying, on specific personalities to carry the ratings of program for them, the network grows dependent on the celebrity rather than the quality of the show. As some people say it, it’s all about packaging. However, sometimes this strategy bites back; networks would have to pay for some costs when their talents go against them, even if it means putting it in legal hands.
Last July 15, a GMA actress filed a case against an executive of GMA-7 for alleged perjury, saying that the libel case against her was fallacious. In short, GMA’s strategy of honing, packaging and showcasing talents backfired. They are now facing a legal case from an internal conflict that should have been resolved even before it came public. This is not the first time that this type of disagreement came to surface newspapers and even to courts. We can recall how the 486 Million peso case of Willie Revillame against ABS-CBN for breach of contract, was such a big issue. Eventually, Revillame won but he had to find another network where he can make use of his popularity for profit. This case definitely took a toll on ABS-CBN and their financial statements.
Networks invest a lot in their talents, showed in how they are able to package it in such a way that the public will build a fan base. They have even built their own talent centers to easily facilitate workshops and trainings for artists; some networks even create shows specifically for their talents. However, as recent issues have surfaced, there is no assurance to the effectiveness of this. When a network relies too much on one strategy in increasing their ratings, sometimes, it poses problems to them. As how some people put it, they create their own enemies. So how can they avoid these internal antagonists? In the level of the artist-network relations, professionalism should still be observed, despite the nature of the industry; contracts, boundaries, due process and hierarchy should be respected when making transactions. Networks could also try to delineate from their original approach and develop quality shows as their main strategy to improve ratings.
The television industry is a ratings game; networks see celebrities as their main strategy in winning this competition. However, what drives ratings is public entertainment. Whichever that may mean to networks is of no concern to the public, as long as good quality entertainment is what they receive. Maybe networks should evaluate their approaches on how to provide this and they might be able to reduce legal costs and eliminate any possibilities of creating their own enemies.
News link: http://entertainment.inquirer.net/104603/gma-7-asks-court-to-summon-actress-sarah-lahbati-on-breach-of-contract-case
Members:Delos Santos, Reynaldo
Mertalla, Nathalie JoyMoraña, SarmielynZornosa, Maria Nauriz Rizel
News article from Philstar.com by Zinnia B. Dela Peña
Now that everything is about to be fulfilled, the Pangilinan group of companies draws closer to the acquisition of GMA Network, Inc. via their current assets through Mediaquest Holdings, Inc. and Associated Broadcasting Co. (TV5). Pangilinan even mentioned last week that his group is willing to acquire GMA-7 at a much-higher price than the network’s capitalization, which amounts to P33.95 billion (as of July 20).
According to the article, Pangilinan’s acquisition of GMA Network will catapult his group up into the top position of the competition, thus, garnering the advantage of having the majority market share in the television broadcasting industry. Furthermore, it asserts that this will cause a virtual duopoly within the structure of the industry - a rivalry between GMA Network + ABC (TV5) and ABS-CBN. However, there is a high possibility that this deal might turn GMA7-TV5 merger into a monopoly in the television broadcasting industry, which could greatly affect the advertisers through higher advertising rates. This also leads to the fact that barriers to entry for the said industry increased, which will have a great impact on the structure of the market - whether it will become more or less free. With less competition, the leading companies in TV broadcasting industry could greatly control the said rates. MVP’s acquisition of GMA 7 is also a threat to existing competitors as the merger strengthens the incumbent’s diversification of products and services. This implies the possibility of the merger engaging in a cut - throat competition strategy, primarily speculating upon the aggressive investment approach of Manny Pangilinan. With these circumstances in mind, we can zero in on the underlying goals of the merger. Is the acquisition of GMA Network seen as a channel of innovation development between the TV broadcasting industry as well as the technological advances of the telecommunications sector? Or is it another profit-driven measure by the Pangilinan group of companies to acquire further monetary gains?
Collamar, Mark Lester
Lavapie, Jestine Dale
Pinto, John Rudolph
News article from Businessmirror.com.ph by Lenie Lectura
In a follow-up report to last week’s commentary on Manny V. Pangilinan’s prospective endeavor on the acquisition of majority of the shares of GMA Network Inc., the news article implies a higher probability of success for the endeavor as it states Pangilinan’s hopes of closing the investment deal before the end of the year.
In addition, it was also stated in the previous commentary that upon acquisition of GMA Network, Inc. alongside MVP’s previous acquisition of the ABC (TV5) broadcasting TV network, the merger will result in a market capture of more than 50% in audience viewership which will imply greater monopoly power over its competitors. However, another aspect to be speculated upon is the potential innovation of the television broadcasting industry. Bear in mind that upon the acquisition of GMA Network, there is a possibility of technological diversification and innovation through the network of companies under Pangilinan (PLDT, ABC – TV5, and GMA). There will be a potential base and foundation for the establishment of multimedia and multi-platform broadcasting activities in line with the current advancements in advertising such as blogs, social media sites, and photo hosting services.
“Video killed the radio star” as the famous song goes. And in today’s technology, it is not far that the power of the internet may take over the technology of television broadcasting. For Pangilinan and his party, the prospective merger may prove to be a significant stepping stone towards the reinvention and innovation of the whole broadcasting industry. Adapting externally to the modernizing elements of broadcasting and advertising may be one of the most crucial factors for any firm in the industry. Innovation is good as it promotes comprehensive development and advancement of any technology. However, fair competition must also be taken into consideration in any market play of a particular industry.
Lavapie, Jestine Dale
News article from Inquirer.net by Doris C. Dumlao
The news gives the readers a clearer picture on what is currently happening in the television broadcasting industry. Having said this, the group is interested to know the effects of the possible merging of GMA 7 and TV 5 to the whole industry most especially to ABS CBN.
Manny V. Pangilinan, after acquiring Sun Cellular, is now eyeing one of the country’s leading television networks, GMA Networks, Inc. The controlling stockholders’ share is at P52.5B which means that anyone who will be able to acquire these will have larger voting rights than the others, making him the major stockholder. To show his eagerness in buying GMA 7, MVP has started to make his aggressive moves by organizing bank finance to prepare for the prospective buyout, Mediaquest Holdings Inc. starting to prepare to issue Philippine depositary receipts to PLDT as well as the expected offer of MVP to buy the shares of the minority shareholders. MVP also reiterated that his group is willing to pay in cash.
This issue enables the researchers to formulate hypothesis about its effects in the future based on the given information and data. Combining the viewership of GMA7 and TV5 will capture approximately more than 50% of the TV audience placing these two corporations at the top spot. This will also allow merged companies to have greater monopoly power thereby controlling and lessening its advertising rate. Once this happens, it is expected that more advertisers will come to them thus affecting the sales of other networks especially ABS CBN. Also, the group sees this as a strategic move by MVP to have PLDT, Channels 5, 7, 11 and 13 as well as Meralco under one corporate umbrella to be able to cut down his expenses in advertising these corporations while at the same time having bigger sales than the previous years.