GMA Network, Inc. High at 55!

GMA is 55 years old and No. 1, what else do you want to accomplish?

Chairman, President and CEO Felipe L. Gozon (FLG): We want to grow the core business of GMA-7. We want to expand the same to other related businesses and areas. We want to maintain and further strengthen its No. 1 position in the country. There are still many things to be done. While we have substantially achieved our Vision, we are not yet "recognized media innovator and pacesetter in Asia."

Executive Vice President and Chief Operating Officer Jimmy R. Duavit (JRD): I would like to see the Company migrate from a total reliance on advertising revenue to a more diversified base of revenue resources. Technologies are enabling broader access to content. As we are primarily a content producer, the objective is for the Network to be, undisputedly and in all genre and format, the content provider of choice not only of Filipino viewers here and abroad but prospectively, a content producer of choice even of other cultures and countries. This, by strategically expanding and optimizing the capacities, competencies and creativity we already possess. I other words, to utilize non-proprietary distribution platforms for our content without necessarily incurring costs related to non-core infrastructure and in the process generate additional revenue from our primary products. We have taken the first step in this direction via GMA Pinoy TV and our growing syndication efforts. Alongside this, of course, would be to dominate the ratings in all other markets outside of Mega Manila and establish Channel 11 as the outright # 3 free to air channel within one year from launch.

When you took over a fledgling broadcasting company in 1974, what were your expectations of the company? Did you expect GMA to be what it is now, a conglomerate that is now establishing its presence in the international market?

FLG: The truth is I did not like to invest in the Company in 1974. But Mrs. Loreto Stewart and Bob Stewart were insistent that I do so. I am glad I did. Obviously, at that time I did not expect that GMA-7 will be what it is now - the No. 1 Philippine TV Company, the most awarded both domestically and internationally, probably the most valuable, etc.

JRD: In 1974, the challenges were two-fold: (1) to elevate Channel 7, which was losing money then, to a profitable broadcast company and (2) to make it the dominant channel in what was then the Greater Manila Area. Beyond that, the key challenge was to deliver its programming to more territories nationally. The international market was not, to my knowledge or recollection, in the periscope then. In fact, if we are to examine our programming at that time, we were predominantly airing canned programs with the grid skewed towards the AB audience. I do not recall any plans then involving diversification or expansion that would lead to our becoming a conglomerate of this size that now counts as part of its revenues international subscription or program syndication.

GMA has grown by leaps and bounds since you took over management of the company in 2000, what did you do to make this happen? What would you say are the three most important lessons you have learned since you took over management of the company?

FLG: I guess we did the right thing and made the right decisions at the right time with the assistance of the people in GMA-7 who are really the best in the industry. We judged by the results. I do not want to specify too much, but it took a lot of study and hard work.

The three most important lessons I learned are: Lead by example; be honest and transparent; and focus on the objectives and assiduously try to accomplish them. JRD: We all played a part in making this happen. Personally, I take pride in being directly involved in efforts towards establishing the strong fundamentals needed to propel growth and create the ability to sustain and manage it efficiently.

One example continues to be truly gratifying as it entails working directly with our people. It involves knowing them and how they have grown, understanding what they do and importantly, how they do it given the realities of the period. Through sessions conducted periodically involving different key operating units, processes are evolved and continue to be revisited and refined to efficiently meet the changing demands. Guided by the question "how can we do better?" this has become a discipline with us and forms the bases for (corporate) structural and operational modifications, both of which I am directly involved with in varying degrees.

Another example related to the first is the role I play in the blueprint and operationalization of approaches pertaining to the accomplishment of key objectives, together with the determination of the enabling (technical) infrastructure concerned. I am proud to say that this continues to contribute to our operational efficiency and forward movement. On the hardware, I can say that the Network's technical complement in our Mega Manila operations is the finest in the industry, particularly on a "bang for the buck" basis.

As to the second part of the question, these are not so much lessons learned as key beliefs I manage by: (1) Always go back to the basics. Growth cannot be efficiently achieved without a firm grasp of the basics. (2) Always keep an eye on the limitations or the weaknesses of the organization and do whatever is necessary to strengthen these areas. This is as important as capitalizing on our strengths in relation to the accomplishment of ever growing targets. (3) Sustainability is grounded in the continuous personal and professional growth of our people alongside our evolving ability to positively develop and orient them. Phrased differently, sustainability results from our ability to consistently bring out the best in our guys in tandem with our ability to "grow our own trees" as an organization.

How does it feel to be No. 1?

FLG: Great! There's nothing like it.

JRD: It is a great feeling more especially since the elation of winning is shared by all of us. It is important, however, to remain cognizant of the responsibilities that come with being No. 1 and beyond that, what is required of us not only to stay No. 1 but to push the envelope further. We have come to the point where we are now competing against ourselves and relating to ourselves as the frame of reference.

What was the most difficult situation you have encountered so far during your stint with GMA? FLG: Changing the culture of the people in the company, the non-cooperation of some key people in achieving our Vision and letting them go.

JRD: The most difficult was not so much a situation but a realization when I first came in. What I discovered was that we are basically not configured, equipped or even oriented to compete. This gave me a perspective on what had to be done to bring us to the point where we could at least start to gain ground. Close to five years ago, there were a host of things that had to be addressed and worked on immediately and efficiently so the organization would not fall into the trap of further disorientation and demoralization.

Policies, systems and processes had to be first examined, validated, refined and/or put in place among a host of other key requirements. A seasoned and competitive HRD team had to be set up, the Engineering Group needed restructuring and re-orientation, a strong and well led Corporate Services Group had to be created and the strain on both ETV and N & PA relaxed so our content producers could re-group, gain better grounding and begin to add more value to our program output, to cite the more glaring.

A monumental task but achieved with the help and commitment of our people.

Since last year and up to this moment, GMA has accomplished so much, among them taking the lead in ratings and revenues, going international and partnering with ZOE Television Channel 11. How do you keep up with these developments?

FLG: Time management, hard work and self-discipline.

JRD: We have a very strong and supportive leader in our CEO. The Network's Team of officers is the finest in the industry. Our employees and talents are highly motivated and are likewise the best in the business. We all move in one direction and stay the course together. Our guys have adopted well to change and are open to it more and more. We remain prudent with resources and have been able to maintain our focus even as we grow rapidly. We have imbibed a corporate culture and have instilled disciplines that bring out the best in all of us. These are the key factors that have allowed me to keep up with respect to the role I play in the organization.

On a more personal note, the support and understanding of my wife Rosanna and the daily smiles and hugs from my twin boys, Javier and Jaime, help immeasurably!

How do you look at the future of the industry? Do you expect new players in the industry? What new opportunities are you looking at?

FLG: Due to technological developments, the future of the Philippine TV industry will be impacted by the so-called "convergence" among TV/radio, computers and telecommunication, digitization, multi-channel and high definition TV, etc. But I believe that those who produce content will be the major players.

In the Philippines, apart from "convergence," etc., I can see the "dechaining" of national from local sales of TV programs, like in the U.S. and in radio. Once the sequestered TV stations are sold by the government, more competition can be expected.

Right now, we're expanding to foreign countries where there are concentrations of Filipinos, making more movies, improving our infrastructure and capability in and outside Mega Manila, programming ZOE Channel 11, preparing for full digitization, looking at or going into other related business opportunities, strengthening our radio, trying to improve further our ratings, gross revenues and net income, etc. JRD: The future of the industry is very exciting.

For one, I believe the industry will become even more competitive. There are two sequestered channels in the wings which have remained dormant but will add to the number of players not long after they are privatized. The advertising pie, which is presently still the sole source of our revenue, is not expected to grow as rapidly as we all would like. In that sense, it will become even more challenging for us to continue to grow at the rate we pegged as a target for the next five years but it is in relation to this that our strengths are most relevant.

The opportunities are many. Our recently announced Blocktime and Co-Production agreement with ZOE Broadcasting is a good example as it not only increases our saleable inventory of airtime but also allows us to further leverage our strengths and capacity while increasing our product menu. Our entry into the overseas Filipino market via GMA Pinoy TV is another example. We are seeing a growing overseas Filipino market with a growing disposable income. Our present focus on that market will generate revenue which is impervious to local advertising spending.

New technologies now allow broader access to our content. In some countries, you don't have to be a homeowner with a subscription to a cable or satellite service to eventually access and, in effect, pay for GMA content. We are already looking at this through GMA New Media.

Another opportunity, which has been largely untapped although we are gaining some inroads, is the syndication of our content to free-to-air channels and pay TV programmers and/or infrastructures worldwide. The challenge here is to create content that their respective markets (beyond the ethnic Filipinos) will actually want to watch or subscribe to. I am very confident that we will see successes here in short period to time. These, to name the more immediate.

What do you think will be the most important development impacting on the television market in the next five years?

FLG: Convergence, digitization, and the Philippine economy and political stability.

JRD: Technological advancements are allowing greater accessibility to content or programs beyond fee-to-air television as a delivery medium. When the enabling technologies become affordable to the mass audience, these will naturally impact not only the viewing levels will naturally impact not only the viewing levels but eventually the free TV ratings. Although not in significant terms within the near future, these may bear negatively on our traditional source of revenue but we are preparing for this eventuality way in advance.

What is the biggest challenge that you face now and in the future?

FLG: How to improve further the No. 1 position of the Company. How to grow and expand its business and value.

JRD: The biggest challenge not only I, but all of us, face today is not only to stay No. 1 but also to deliver optimum results from both the Channel 11 contract and our International business within the shortest period of time. In other words, the challenge of remaining grounded and focused in the face of numerous opportunities while continuously driving growth and value. This is the challenge today and in the future as we incessantly seek and create opportunities for growth beyond those mentioned.

In the endless bid to retain audiences, what would you advise?

FLG: Concentrate on the quality and value of the programs and be always "responsible." This is because we are aware that free to air TV has become the most influential and powerful among media. In GMA-7, whether in Entertainment or in New and Public Affairs, I am proud to say that there is a line below which we do not descend in trying to increase the ratings of our programs. This is a matter of Company policy.

JRD: First, my advice is for us to continue to keep focused on knowing and understanding our audience better and better. Second, to continue applying innovation and value to our programs or products. We should not fall into the trap of complacency. There is always the need and ability to be, and do, better. (Reprinted with permission from Kapuso Magazine)