Plan to list ABS-CBN Global in Singapore bourse bared

ABS-CBN Broadcasting Corp. disclosed yesterday plans of listing wholly owned international business subsidiary ABS-CBN Global in the Singapore stock exchange sometime in 2008.

The Lopez-owned television and radio network likewise announced that it plans to spend an initial P500 million for a partial migration of analog to digital TV technology sometime middle of next year.

ABS-CBN president and CEO Eugenio Lopez III and company chief financial officer Miguel Navarrete explained that Singapore is a more attractive market to be in Asia compared to Hong Kong. "Aside from it being a more mature market, right now, there are no broadcast stocks in Singapore," Navarrete said.

For his part, Lopez said the possible listing in Singapore does not prevent ABS-CBN Global from doing a dual listing in the Philippines or in Hong Kong.

There were earlier reports that about 20 to 30 percent of ABS-CBN Global will be listed when it goes public, but Lopez emphasized that this figures are still under review. Proceeds from the listing will be used for the subsidiary’s expansion.

ABS-CBN Global, which takes care of the international business for the group (primarily selling ABS-CBN programs to other countries) accounts for about 20 to 25 percent of the parent company’s revenues and Lopez hopes that this percentage will increase to 50 percent in five years’ time. "The local market is not growing so that we are expanding our reach to other countries," he noted.

Because of declining advertising revenues of the entire broadcasting industry, including rival GMA Network, companies have to come up with ways and means to look for other sources of revenues and reduce costs.

In the case of ABS-CBN, Lopez said that ABS-CBN Global as well as its film division have provided the bright spots for the parent company, resulting in positive net income for the last nine months. Cost reduction schemes have also been implemented, including a reduction in the workforce.

ABS-CBN Global has an existing partnership with digital satellite TV giant Direct TV in the US which allows ABS-CBN programs to be aired in that country. Lopez said that the number of subscribers of ABS-CBN in the US is growing at a rate of 5,000 a month, which has been made possible because of Direct TV’s huge dealership of around 120,000 dealers. But aside from Direct TV, ABS-CBN Global also has partnerships with US cable companies but in the case of the latter, only one channel (The Filipino Channel) is being aired. "But we have more subscribers in the US through cable than through satellite TV. Cable is about 20 percent larger," Lopez pointed out.

In other countries where ABS-CBN Global does not have a partnership with either cable or satellite tv companies, Lopez said they will be offering ABS-CBN programs through Internet TV under ABS-CBN Now which currently has 60,000 subscribers, mostly in the US and in the United Kingdom. "Everything will be on IPTV in five years," he noted.

In countries like New Zealand, Korea, Canada, and Japan where broadband penetration is high, Lopez explained that IPTV is the way to go. ABS-CBN Now will be launched in Japan within the month.

IPTV basically involves delivering television content through broadband Internet. It often includes video on demand

Navarrete explained that ABS-CBN Broadcasting has made a strategic move to be in the production of content. "Once we have the product, we are able to sell it to multiple markets abroad, either through cable tv, satellite tv, or Internet TV," he said.