Lopez-controlled ABS-CBN Corp. is investing about P6 billion in a state-of-the-art sound stage facility that will reduce production costs, an official said.
The facility is expected to be completed in three years.
Eugenio Lopez III, ABS-CBN chairman and chief executive, said the company has acquired a 15-hectare property in Novaliches, Quezon City, worth P75 million for the sound stages.
The first two of six sound stages are expected to be completed this year at a cost of P3 billion.
Lopez said the company has been spending P100 million annually for location rentals alone, which make up 80 percent of total production costs.
Studios account for the remaining 20 percent.
Lopez said the company wants to reverse the proportion in favor of studios.
"We also want the state-of-the-art facility to attract foreign tourists who want to shoot their programs in the sound stage," he said.
Lopez said the Novaliches site will house sets for airports, hospitals, schools, theme parks and the like.
The completion of the facility is timely to the industry’s migration of the digital terrestrial television. "We need to produce more content and programs for additional channels," Lopez said.
Lopez said he expects the consumer segment to overtake the growth in advertising. At present, 60 percent of revenues come from ads and 40 percent from the consumer segment.
"Our future is really in consumers," he added.
Part of consumer segment growth would come from the global channels as subscribers’ shift to internet protocol television.
Lopez said the plan is for ABS-CBN to move 80 percent to 100 percent of its overseas subscribers to internet TV in the next five years so they can watch Kapamilya programs anytime.
Rolando Valdueza, ABS-CBN chief operating officer, expressed optimism that, despite the absence of political advertisements this year, income would reach P3 billion this year on the back of higher ratings and strong ad revenues.
In the first quarter, ABS-CBN posted P976 million in net income, down 10 percent from the same period last year due to the absence of political advertisements.
In the same period, ABS-CBN posted consolidated revenue of P6.6 billion from advertising and consumer sales, a 15 percent decline from a year ago.
Less revenues from political advocacies and advertisements in the first quarter of 2010, consolidated revenues in the first quarter of this year increased 3 percent.
Source: Malaya Business Insight