Fewer ads take toll on GMA’s profitability

MANILA, Philippines — Broadcast giant GMA Network Inc. booked fewer advertising placements in the first quarter, causing its revenue to fall and consequently squeezing its profit.

Based on its financial report, GMA said its net income declined by two-thirds to P204.12 million in the three months to March, from P603.57 million a year ago.

This as revenue went down by nine percent to P3.66 billion, while expenses picked up by six percent to P3.47 billion during the period.

The free TV leader registered a nine percent drop in advertising income in the first quarter to P3.36 billion, with much of the decline attributed to the schedule of the Holy Week this year, falling in March instead of April.

“Television broadcasting had a slower start this quarter and it missed last year’s top-line peg. The presence of the Holy Week break this March 2024 as opposed to April last year also factored in the revenue reduction this year,” GMA said.

Meanwhile, GMA’s production costs rose by eight percent to P1.8 billion as the company produced new programs, particularly for the primetime block.

Likewise, general and administrative expenses jumped by seven percent to P1.6 billion, with the network paying more for its personnel, facilities, services, taxes and licenses.

In spite of this, GMA closed the first quarter sitting comfortably in the driver’s seat, benefitting from the absence of a competitor as large as it on free TV.

Further, GMA expects its online segment to sustain growth for the rest of the year. The network increased its online advertising by half between January and March, as the network expanded the reach of its digital platforms, such as YouTube, where it is nearing 35 million subscribers.

GMA is set to return to expansion mode after enduring a profit decline in 2023. GMA hopes to do this by capitalizing on its free TV leadership and growing reach online.

GMA ended last year as the undisputed leader in free TV with an audience share of 47.5 percent in Mega Manila and 45.2 percent nationwide.

Before 2023 ended, GMA brought in a new CEO in Gilberto Duavit Jr., as Felipe Gozon gave up the post to focus on his duties as chairman of the board.