MANILA, Philippines - Despite cuts in advertising and rising production costs, Valdueza said ABS-CBN would pursue an "aggressive" spending plan in 2012, even as competitor GMA-7 tightens its belt.
The bright spot for ABS-CBN was the strong 10% revenue growth (P4.3-B)
in broadband as unit Sky Cable grew subscribers 18% year on year.
"It's a sign we have to invest more," said Valdueza.
The financial officer expects capital expenditures to reach about P5 billion in 2012; in 2011, it was P4.2 billion.
"The bulk of that will go towards the cable business for Sky to expand our broadband business," said Valdueza.
He added, "It's a temporary setback last year with the economy down
locally and globally. We continue to invest because we believe things
will continue to improve, our rating continue to improve, we just need
to address our signal problem."
He explained that their analog signal had sometimes put ABS-CBN at a
disadvantage in broadcasting to certain Metro Manila locations.
Valdueza hoped Sky Cable would move them beyond television. He said Sky
"will service all possible potential platforms. It will be available to
the consumer wherever they may be, cellphone, iPad or laptop."
"Our content should be available in all platforms," he added. Drop in subscribers, ads
Consolidated revenues from advertising and consumer sales fell a whopping 13%. Even taking out spending for political ads in 2010, consolidated revenue would have declined 6% year on year.
The company felt the loss since, as Valdueza put it, "roughly 60% of the business is in advertising."
The financial officer explained, "If you look at the local economy it's a bit down… even the global economies are down so there are budget cuts coming from our advertisers."
Even as less money came in, production costs rose 25% year-on-year.
Meanwhile, ABS-CBN's number of viewers remained almost flat at about 2.45 million, with continued growth in Canada, Asia Pacific and Australia but declining viewers in its traditional strongholds of North America and the Middle East.