In-Sight

Unleashing Philippines’ digital opportunities

MANILA – As of end-2014, TV penetration stood at 76% in the Philippines, which is equivalent to 17.1 million households with TV sets, according to the Philippine Statistics Authority.

While the media landscape may represent a market set for growth, digitisation means the Philippines, like other growing markets, is facing challenges, said Christopher Slaughter, CEO of CASBAA.

Speaking at the CASBAA Philippines in View 2017 conference held in Manila last August, Slaughter explained: “Driven by new technologies, easy access to online video content and changing viewership habits are some of the issues media operators today have to address.

“And with its unique geographical features and peculiarity in content consumption, alongside the satellite industry’s expansion into the mobile broadband environment and accurate audience measurement, all these are playing a key role in developing a healthy ecosystem for the pay-TV and broadcast industries in the Philippines.”

Carlo Katigbak, president and CEO of ABS-CBN Corporation, agreed with Slaughter’s point on the rise of online viewing, and reinforced that online viewing is a “great opportunity” for media operators to broaden their reach. He elaborated: “Although our subscriber base remains strong, we’re also seeing our viewers being engaged in multiple services. For instance, besides being pay-TV subscribers, viewers are also accessing content from other over-the-top (OTT) services.”

ABS-CBN, a Philippine media and entertainment group, has been moving its content to online platforms, in order to cater to viewers who prefer watching video-on-demand (VoD), Katigbak shared. “We’re also thinking about creating content specifically for digital platforms. This is not just repurposing the content, which we’ve already created for TV or movies, and shifting them online. It’s really about creating creative content that is designed to be distributed on digital platforms.”

And with multiple OTT players entering the Philippine market in the past several years, Katigbak urged both industry regulators and associations to revise the regulatory environment surrounding the broadcast industry.

“Traditional TV is still a heavily regulated industry, but both distributors of pirated content and OTT providers are operating with less restrictions, including foreign ownership. It is time to think about whether regulations for pay-TV are out-of-date, and need to be revised,” he concluded.

Supporting Katigbak’s appeal was Jane Jimenez-Basas, president and CEO of Cignal TV, who suggested that pay-TV is capable of achieving further success if regulators were to take the opportunity to level the playing field. She continued: “When it comes to content, we can’t be as ambitious as OTT service providers because we are subjected to stricter regulations.

“There is a real need for regulators to review what are now dated regulatory rules. Right now, OTT providers are enjoying a free ride, but eventually the regulators will catch up.”

Direct-to-home (DTH) player Cignal TV, who overtook Sky Cable in 2015 to become the largest pay-TV operator in the Philippines by volume of subscriber, has attained a 1.6 million subscriber count as of end-2016, Jimenez-Basas revealed. As part of Philippine telco PLDT, Cignal TV markets its services with other relevant PLDT brands such as PLDT Home and Smart to sell bundled packages with DTH and IPTV solutions.

Calling OTT the third wave of TV, Mark Lay, vice-president, Singa­pore, CASBAA, commented that the combination of broadband and mobile devices has brought TV into a “whole new era”, and asked his panellists — comprising speakers from Viu, iflix, Sky Cable and HOOQ — to share about the role and focus of mobile devices in their business.

“Over 80% of consuming time is via mobile devices,” said Sheila Paul, head of marketing for HOOQ. “Initially, we tried to balance between desktop and mobile, but we noticed usage was weighted towards mobile, so we redeveloped our product and relaunched it last year. Moving forward, we foresee growth of mobile viewing on a Wi-Fi connection, as broadband penetration is getting better and more affordable.”

With consumer power continuing to grow, the market “is getting more affluent” as viewers might be subscribing to more than one service, Paul elaborated. Hence, there is definitely space for operators to grab a share of their viewers’ attention throughout the day, she predicted.

Another mode of video consumption is via mobile data, which Philippine telco Globe Telecom has been delivering since 2012. Nikko Acosta, senior vice-president, content business, Globe Telecom, commented that the digital lifestyle of a Globe subscriber, both at home and on mobile, is now shifting along with the waves of data.

Mobile data has always been one of Globe’s core businesses, he highlighted, and the wave of mobile data enables consumers to access the services and media content at their convenience, thus complementing their consumption habits.

He also revealed that the company has started to commercialise creative products and experiences that are data-related, and has been establishing strategic partnerships in order to enhance the overall “digital, connected lifestyle” for Globe’s subscribers.

As broadband services are currently being rolled out across the Philippines, Acosta declared that “broadband will be the blue sky for everyone to tap into” going forward. He explained: “In the future, consumers will be demanding services anytime and anywhere, regardless if it is on mobile or on home-sharing devices. Thus, the investments to accelerate mobile and wireless broadband infrastructures must be in place, to enable us to better serve our customers.”

Acknowledging Acosta’s point about the growth in broadband services, Virat Patel, managing director of Pioneer Consulting Asia, who also authored the CASBAA Philippines in View 2017 Market Report, pointed out that the fast-evolving business environment for pay-TV and broadband video is no longer being driven by standalone pay-TV services.

According to Patel’s report, 75% of new video connections within the Philippines are for broadband alone, or broadband bundled with pay-TV, with room for growth as traditional pay-TV services retain a penetration rate of just 14% of all TV households.

Patel continued: “Apart from the larger players who have been selling broadband services aggressively, we found out that some members of the PCTA (the Philippine Cable TV Association) in the provinces were selling more broadband than pay-TV, to the extend where TV is even bundled in for free. Therefore, it is broadband driving the market forward, instead of TV.

“And with the combination forces of 3G, 4G and 5G, as well as fixed broadband increasingly moving into fibre, there will be many more broadband connections than pay-TV. We definitely see significant growth in broadband, and with government and operator initiatives, the roll-out of fixed broadband is going to be more aggressive.”

The consumer experience was highlighted in the Looking to the Future Revenue: Advertising Viewing and Measurement panel, with representatives from Kantar Media and Nielsen who both emphasised their companies’ work towards including measurement of online video consumption. Stuart Jamieson, managing director of Nielsen’s emerging markets South-east Asia cluster, said: “The challenge with the industry is to rethink the way of using data, the types of data obtained, and look at them in a different perspective.

“Having silo measurements does not work, and create internal competition for resources. Media companies need to start looking at what Nielsen calls Total Audience to understand their audience, identify who they are, what they like, and how they interact with content — everywhere across all platforms.”

While the journey of digitisation is a natural progression for the broadcast industry, Jamieson commented that the Philippines is one of the few markets where Nielsen have not seen “great deal of loss of viewing to digital”, unlike some of the more developed markets where there is significant reduction in linear viewing.

“It’s about embracing digital services and platforms, instead of viewing them as a competition,” he added. “The Philippines is going to see more mobile consumption from the younger population, and the speed of getting content into the country is going to be much faster. Hence, it’s time for traditional players to embrace digital offerings, and make a new distinction of their service.”

Declaring the Philippines in View 2017 conference a success, CASBAA’s Slaughter concluded: “As part of our ‘in View’ series, which we’ve been doing for several years, we go into a particular market to look at as many different aspects of the market as we can. It is also an opportunity for media companies to take a closer look and really dive deep into one specific market.

“For instance, telcos such as Globe Telecom have been in the media space for quite some time, and they have set up IPTV and other services that go along with their broadband and data services.

“With Globe’s venture into media content, it is a recognisation that smartphone penetration is accelerating. This also supports the fact that 3G and 4G services are perfect for the transmission of video and streaming media, hence acknowledging the changing consumer preferences of how they want to consume their video content.”

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