ABS-CBN‘s The Filipino Channel marks a decade of steady growth

SAN FRANCISCO, California - Over 8,000 members of the Filipino community in the Bay Area, including hundreds of Fil-Ams who came from as far away as Chicago, were treated to a star-studded show at the Cow Palace last Saturday (April 3) when ABS-CBN’s The Filipino Channel (TFC) celebrated its 10th anniversary of service to Filipinos worldwide. It was the largest gathering of Filipinos this writer has ever seen in a single event in this country.

The three-hour extravaganza, featuring song and dance numbers by top ABS-CBN talents, led by Martin Nievera and Vina Morales, was simulcast live in Manila on ABS-CBN’s regular Sunday noon program ‘ASAP Global Mania’ over Channel 2.

Rafael ‘Raffy’ L. Lopez, chief operating officer and general manager of ABS-CBN International N.A., which operates TFC, could barely hide his excitement after the program. He warmly congratulated the staff, crew and performers for a job well done. "This is the first time we have done a simulcast of this duration. There was no trial run and margin for error. And we did it!" he exclaimed.

Indeed, the well-planned and highly anticipated show capped the celebration marking The Filipino Channel’s decade of doing business in America specifically for the benefit of Filipino families living here.

Since April 1994, ABS-CBN, the largest broadcast network in the Philippines, has been bringing its top-rating shows, special programs, live news and big stars to Filipino audiences all over the world through TFC, its international cable and satellite network.

Lopez recalls that when ABS-CBN Global started its cable operations in Daly City 10 years ago, they had a staff of only eight and had to start from scratch. There was no model follow. He said TFC was initially available for only eight hours a day on cable in North America. It launched its 24-hour service on satellite less than a year from its inception due to the enthusiastic response from Filipinos living in the US who were hungry for news and entertainment programs from their mother country.

Today, the company maintains a staff of about 130 in this city, Los Angeles and New Jersey with the main sales force housed in the Lopez Building, a modest three-story edifice in Burlingame just a short distance from the San Francisco International Airport.

‘Building Bridges In The Air’

The Filipino Channel is the realization of a dream that ABS-CBN chairman emeritus Eugenio ‘Geny’ Lopez, Jr. had. He envisioned a long time ago of "building bridges" in the air by reaching Filipinos in North America, the Middle East, Asia-Pacific and Europe. He wanted Filipinos overseas to be closer to the land of their birth via home grown programs to be beamed abroad through the wonders of satellite TV.

At present, TFC reaches about 250,000 households worldwide, close to 200,000 of these in North America alone. Over a million Filipinos around the globe can enjoy the same entertainment and live news programs that are shown in the Philippines via ABS-CBN Channel 2. TFC beams its all-Filipino programming for its broadcast services on cable and on its direct-to-home service TFC Direct! worldwide through the technical facilities of Panamsat’s PAS-8, Sky Loral’s Telstar 5, Lockheed Martin’s LM1 and Eutelsat’s Atlantic Bird 3.

Raffy, a son of the late ‘Geny’ Lopez III and the brother of Eugenio ‘Gaby’ Lopez who runs the ABS-CBN empire in the Philippines, says they now provide Filipinos overseas with a variety of services - from telecommunications (ABS-CBN Sarimanok); long distance direct; an exclusive Internet service provider (with Bayantel); TFC; homegrown satellite business; Starry Starry Store, which offers a wide range of products like music CDs, VCDs, videos, publications and specialty gifts and a remittance business (ABS-CBN Global Money) that enables Filipinos, especially those working in the Middle East, to send their money home. Last October they also went into cargo forwarding which allows TFC subscribers to send their balikbayan boxes through Star Kargo on a door-to-door basis.

Flagship Product

Lopez admits, however, that The Filipino Channel is ABS-CBN Global’s flagship product. "It is the whole bundle!" he says. TFC Direct! is a direct-to-home satellite service started in 1998 when TFC was bundled with other ABS-CBN channels in the Philippines like the ABS-CBN News Channel (ANC), Cinema One Movie Channel, Pinoy Central TV (regional, travel and sports programs), DZMM (news and commentary AM radio station) and DWRR (music FM radio station). Another subscription service targeting Pinoys in the US was launched just last week. ABS-CBN Now is an online service and a joint venture with ABS-CBN Interactive in Manila.

ABS-CBN Global’s The Filipino Channel has been on a steady growth pattern since its launch in 1994. Last year the company posted a net income of $2.7 million exclusively from its North American operations on gross revenues of $47 million. For this year, ABS-CBN Global is targeting $54 million in gross revenues or a 15-percent increase over 2003 levels. As expected a big chunk of its earnings came from its North America operations, as the other units are still described as "young and growing." On a group wide basis, The Filipino Channel contributed about 20 percent to the net income of ABS-CBN Broadcasting Network for 2003. Not bad for a relatively young company with unlimited growth potentials.

TFC Direct! is the largest revenue-generating unit of ABS-CBN Global Ltd. It is basically a subscription-driven business, adding about 2,000 subscribers a month. With The Filipino Channel bundled in, subscribers can now have six channels of variety programming. TFC Direct! has switched from analog to digital transmission for "superior quality broadcast and premium channel options." TFC is available in 21 states on cable or to about 90 percent of all Filipinos living in the US. Alaska was the latest state to have TFC. Although advertising is also a contributor to the bottom line, ABS-CBN International officials like Billy O. Ick, assistant vice-president for operations, views it more as an ancillary product, unlike the parent company ABS-CBN Broadcasting Network which depends on advertising for its bread and butter. The commercials that The Filipino Channel runs are particularly geared towards Filipino households.

Competitive Rates

And how do subscription rates in TFC Direct! compare with other premium channels like HBO, Showtime or The Disney Channel? "We’re very competitive and even on the low side," says sales and marketing director Tom Consunji. "We charge $22.95 for the six channels plus 20 minutes of free calls a month," he adds. Already the company is going into the subtitling in English of ABS-CBN’s more popular telenovelas for the benefit of the second and third generation Filipino immigrants who may no longer be conversant with Filipino or Tagalog. "We are doing this so that the young can watch the programs with their parents and understand it. We want those who watch our shows to have a family viewing experience." says Consunji.

A unique feature that TFC offers its customers is universal billing. This means that subscribers can choose from any of the varied packages that ABS-CBN Global offers and they will be charged the costs to be included in their regular cable subscription billing. The service is meant to give the customer a wide variety of options. One of the firm’s biggest retail selling items and the longest in the business is Sarimanok One, the only rechargeable phone card and rewards card made especially for Filipinos in the US. "There are no hidden charges here and we have a loyal number of customers," Lopez points out.

Asked as to whether the company might be spreading itself too thin by offering a host of products and services, Consunji feels they are not as management constantly reviews each service on an individual basis and evaluates its contribution to the bottom line. "So far we think they are all doing well, although we’d like to see higher margins. But if we feel that any product is not moving according to our expectations, then we will discontinue that line," stresses Consunji.

"We’re more complex than our parent company. We have so many products and so many revenue streams," adds Lopez.

The company is constantly finding innovative ways to do business. "We’re targeting the young Filipinos, the next market and this channel is devoted to them." says Lopez.

Model For Ethnic Broadcasting Services

"We basically pioneered this business creating everything from scratch," he recalls. "Now we are the model in the US for ethnic broadcasting services. They are trying to copy us but nobody owns their own satellite services like us," he proudly points out, adding that nobody in the private sector can match the capabilities of TFC.

Lopez expressed optimism about his multi-million dollar company’s prospects for future growth. "We have the longevity to stay around. We have already marked our tenth year," he says. According to him, others were not as lucky. "GMA with Viva lasted for only a year. Philsat failed after six months and left their subscribers with all the expensive equipment." he recounts. He says that those who embark on a similar venture at this time would find it doubly hard to succeed.

No doubt ABS-CBN’s The Filipino Channel has gained a big head start in this business - 10 years, still growing and constantly improving. And it certainly looks next to impossible for any foreign broadcast outfit to dislodge them from the top spot unless the competitor can offer far superior products and services at cheaper rates.

Asked as to where ABS-CBN The Filipino Channel will find itself 10 years from now and how much it will contribute to the group’s earnings, an exuberant Lopez jokingly replies "Well, maybe we will be big enough by them to absorb our mother company." That is undoubtedly a very formidable challenge although said in jest but who say. An exodus of Filipinos living for abroad and providing a growing market for TFC, very little government intervention, a stronger dollar against a fast-depreciating peso and unlimited opportunities for expansion may yet make his light-hearted comment come true. But one thing is for sure. ABS-CBN’s The Filipino Channel will continue to devote years of dedicated service to Filipinos all over the world.