“To remain No. 1, we have to continue to produce world-class quality content for our audiences here and abroad”
(At the special stockholders’ meeting on Dec. 9, 2021, via zoom, which approved the increase in capital of GMA Ventures, Inc., GMA Network CEO Atty. Felipe “Henry” Gozon entertained questions from stockholders and the media. Excerpts:)
Anthony Gilbert Antiquiera, stockholder
What is the effect to the minority stockholders of GMA subscription to GMA Ventures, Inc.’s increase in capital stock from P50 million to P1 billion?
The management and major stockholders of GMA Network believe that it will be beneficial to GMA’s minority stockholders, likewise beneficial to the major GMA stockholders, that the subscription by GMA to the increase in the capital stock of GVI be made.
Jason Ducaris, stockholder
Will the increase in authorized capital stock affect GMA-7’s cash dividend declaration?
We don’t think so. The cash dividend declaration of GMA is not based on its cash flow but on its net income after tax. As you know, GMA has no long-term debts and its cash flow is very healthy.
Jayvee Reyes, stockholder
Is GMA Ventures looking for a major acquisition that will require a substantial amount?
That is the purpose why we have organized GVI. If a good opportunity presents itself for the company to earn considerable revenues and net income even if that will require the investment of a substantial amount, then GVI can invest in it provided not much risk is involved in the business to be invested in.
Miguel Camus, Philippine Daily Inquirer
Why is GMA turning into a new business now and how does it set into the company’s overall strategy?
Well, the simple answer to that question is we want to earn more revenues and net income for our stockholders.
Are there prospective targets for acquisitions or ventures?
Yes, there are already offers made which are being evaluated.
We would like to get a profile of GMA Ventures, Inc.
The profile is almost the same as the GMA Network’s. I am the chairman and CEO, Mr. Duavit is the vice chairman. Our first vice president for corporate strategic planning, Ms. Regie Bautista is the president and chief operating officer, Mr. (Philip) Yalong is the treasurer, and Annette Gozon-Valdez is the corporate secretary. We are still building up the organization because it’s just very new.
“We have already made small investments in one or two start-up companies.”
At this point, we have not really defined but I can tell you that we have already made small investments in one or two so-called startup companies.
But at this point, we prefer not to identify them.
Darwin Amejolar, Manila Standard
Can you give updates on the diversification plans of GMA Network? Is there any new acquisition or investment?
Our diversification efforts to invest in businesses that are not related to our core business of broadcasting will be carried out by GVI.
Richmond Mercurio, The Philippine Star
How do you see revenues and net income by year-end and are you likely to finish within targets or are you going to exceed targets?
The way things are going now we will fall short on our consolidated gross revenues target, but we will exceed our net income target for this year. We are hoping that the COVID restrictions will continue to be relaxed, or even eliminated, and that our economy continues to recover and grow.
Can you share some of your growth outlook and prospects for next year and do you expect to carry the momentum we have this year and what potential challenges could stop your growth trajectory?
As you know, the situation about the pandemic is improving. That’s why we expect the momentum in the latter part of the fourth quarter of this year to continue up to next year. And next year being a presidential election year, we have reason to be optimistic. However, it still depends on how far and fast our recovery will be and also whether the pandemic will surge or not.
How much CAPEX will you be earmarking for next year and for what will it be used for?
For next year the CAPEX earmarked is a little less than P2 billion which will be for the expansion of our digital transmission network, upgrading of our post-production capabilities, and of our content layout facilities, and expansion of our regional TV network, etc., etc. We have not yet started the construction of our new building and studios. And it does not include our investments in content and other investments.
“We don’t have any plan to enter the cable business.”
Do you have plans to enter the cable TV business?
As you know, the cable TV business in the US and other parts of the world are on a downtrend. So, we don’t have any plan to enter into this kind of business.
“We remain ready for the competition as before.”
How do you see the competition in the next two years given the anticipated return of ABS-CBN?
This time, to answer your question, I have to put our modesty aside. I have to say that even before the ABS-CBN shutdown GMA was already the No. 1 free TV station in the Philippines. And after ABS-CBN was shut down, we continued to improve our reach and content in all aspects like creative, production quality, technical. And so, we feel that we remain ready for the competition as before.
Arjay Balinbin, Businessworld
Is there any update on the GMA Now, our digital TV mobile receiver? How many units have you sold so far? How’s the demand and what’s your yearend target?
I checked on that and as of Dec. 5, 2021, we have sold something like 31,000 units of GMA Now. It was launched only in February of this year. What affected the sale was the lockdowns and quarantine because the GMA Now device is used to watch digital free-to-air TV programs on the go by people outside their houses. But we are still optimistic that its sales will gain traction as soon as people can leave their homes and our economy recovers and grows.
Thank you Atty. Gozon but Mr. Balinbin would like to get an update also on our GMA Affordabox. How many units were sold in the first nine months of 2021 and how significant is the figure and comparison to the same period last year?
Okay. The same lockdowns and quarantines have affected I think the rollout of the digital transmission which is necessary for our Affordabox. But despite this, Affordabox still sold 740,000 units this year. Last year we sold a little less than 1 million units. Again, we see that the sale of our Affordabox will increase next year.
As the biggest broadcast network today, how much growth on the upcoming political campaign season bring to the company?
When I checked in the last 2019 elections political ad sales only contributed 5% of our total consolidated sales. With the pandemic and the Comelec imposed increase 40-50% discount on published rates for political ads. We don’t think that the share of political ads will significantly change from prior elections. In other words, our main source of revenues will still come from recurring advertisers.
What are you looking forward to most in the coming year?
Well we are really looking into more exciting and compelling original content in the coming year and to the continued developments in technology that will bring us closer to our consumers.
Even now, we are already enhancing our reach in the rest of Luzon—in the rest of the country not only for our free-to-air broadcast platforms but also on the digital like desktop or mobile and even on the direct to consumer product.
Tony Lopez, BizNewsAsia
We’d like to know your initiatives and GMA’s initiatives to remain No. 1, to expand, and to diversify.
To answer specifically the question, we think that to remain No. 1 we have to continue to produce world-class quality content to our audiences here and abroad.
We have also to invest heavily in talent management and development and continue to put up more digital stations nationwide so more Filipino homes can enjoy digital TV viewing. We have to continue to pursue new platforms and partnerships to deliver content to more Filipinos abroad etcetera, etcetera.
Now to answer the diversification (question), that is why we have organized GMA Ventures, Inc. — in order to focus on businesses other than broadcasting that have substantial growth horizons and have strong potential to beat profit pulls of the future.