ADVERTISING RATES TO DROP BECAUSE OF TV5?

With tougher competition imposed by TV5 advertising rates in the free-to-air industry is expected to fall if the Kapatid Network continues to improve in the numbers game. According to Astro Del Castillo, managing director of First Grade Holdings, like any industry pressured by tighter competition consumers get to have advantage. As what happened in the Telco industry when the Gokongwie-led Digitel introduced the brand sun cellular, pricing became the name of game that hurt the bottom lines of the mobile operators. The same will eventually happen as GMA-7, ABS-CBN and TV5 struggles to get a better share of the advertising pie. Because of the competition, the three networks will provide more quality programs and less commercials, Del Castillo said.“Competition will be good not only for the viewership but also for the advertisers. Ad rates will go down,” he added.

TV5 eats up ABS-CBN's viewer share

In a blog entry Jun Calaycay of Accord Capital Equities Corp. agreed that TV5 has begun to get a decent share of the viewership pie.“Based on my interpretation of the numbers, the Kapuso network has benefited from TV5’s entry, and, obviously, is bad news for Kapamilya. The numbers suggest that TV5 has been drawing Kapamilyas more than Kapusos into its fence. If I remember correctly, TV5’s share—based on GMA-provided materials—is now in double digits, in the high tens,” Calaycay said.

Gilberto Duavit Jr., GMA president and chief operating officer, said the effect of TV5 on GMA is “so minimal” compared with what they had expected.“Definitely, competition has heated up, but GMA is leading now not only the key market of Megal Manila and Luzon, but nationwide,” Duavit said.

Vivian Tin, head of ABS-CBN Research and Business Analysis, however has a different take on the matter, saying TV5 has taken some market share both from her network and from GMA.“But ABS-CBN continues to do well in primetime nationally and even in Mega Manila where we have reception problems,” Tin said.

Citing data from Kanta Media, Tin said ABS-CBN’s primetime had a 41 percent nationwide audience share in February compared with GMA’s 31 percent and TV5’s 16 percent.For overall national audience share, ABS-CBN cornered 36 percent in the first two months of this year, while GMA’s share went up to 35 percent from 34 percent over the same period.TV5’s national audience share stayed at 13 percent for both months.

GMA however claims otherwise. Using Nielsen TV Audience Measurement (NUTAM), the network said the nationwide audience share of rival ABS-CBN fell to 32 percent in February this year from 44.9 percent in the same period last year. 

In contrast, GMA’s nationwide audience share in February this year stood at 34.2 percent, slightly higher than the 31.5 percent in the same month last year.

Similarly using NUTAM, TV5 recorded a huge increase in audience share at 14.9 percent in February this year from only 7 percent in the same period last year.

But while TV5's emergence tends to affect ABS-CBN's viewer share, GMA-7's advertising share tends to suffer more from the entrance of the new player.