GMA Network sees 2-digit growth this year

MANILA, Philippines - GMA Network Inc. said it expects double-digit growth in its profit numbers this year as the economy picks up and the company recovers from the problems that beset it in 2010.

GMA chairman Felipe Gozon said they are very optimistic about 2011 as the revenue numbers for the month of January and for the first week of February looked promising. “We are booking very good revenue figures so far,” he noted.

The company ended 2010 with consolidated revenues of around P13 billion, and a net income of a little over P2.8 billion, which are around two to three percent and four percent higher, respectively, compared with 2009 levels.

Gozon explained that the problems that the company experienced last year have already been addressed, thus they expect a better performance this year.

“We were able to surmount all the problems last year, such as the resistance to the increase in our advertising rates implemented last year, as well as the ratings. We started negotiating with the volume advertisers as early as November last year so that we have already signed up more than half of our advertising revenues. That has never been done before. Signed revenues already amount to more than P7 billion. And lately, we have been overtaking our competitor unlike before when we were behind. And looking at the general business environment, everybody is optimistic. And this is one thing that advertisers look at. When the advertisers expect more consumption, they advertise more,” he pointed out.

Gozon noted that the advertising budget is a good weathervane for economic ground. “There are around 10 advertisers with big volume accounts who signed up with GMA last December. One company, who boycotted the network, went back and signed up bigger accounts relative to before,” he said.

He said their flagship TV station Channel 7 maintains a small lead in nationwide ratings and a comfortable lead in Mega Manila and Luzon ratings.

GMA increased its advertising rates for 2011, on top of the increase made in 2010. The new ad rates are effective February/March this year.

Gozon also said though ratings and revenues dropped in the third quarter of 2010, these started to recover in the last quarter.

He likewise disclosed that GMA’s international operations have been growing, with the subscriber base increasing 17 percent to end 2010 with 275,000 subscribers.

Meanwhile, Gozon disclosed that the recently signed memorandum of understanding with the Manila Jockey Club Inc. (MJCI) will entail subsidiary GMA New Media providing technical expertise to the gaming operator.

He said that should the venture with MJCI become successful, NMI has the potential to be a very big income generator since its market extend worldwide.

In another development, GMA introduced to the advertising community at a trade launch Monday evening GMA News TV (GNTV) on Channel 11, a free-to-air news and public affairs channel. It will begin airing Feb. 28.

“We are responding to viewers’ requests for timely news updates in Filipino and for public affairs shows in primetime with this groundbreaking news channel,” GMA News TV head Nessa Valdellon said.

Gozon, for his part, said GNTV is also the company’s effort to convert the losses of QTV Channel 11 into profits.

He explained that GNTV’s programming cost is smaller compared to QTV’s. “We can reduce the losses because producing a news program is less costly than entertainment. At the same time, we know that news and public affairs is our strength,” he added.

QTV’s loss of P100 million last year is smaller compared to the losses recorded the previous year.