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Executive Summary
May 2010
The Philippines in View 2010
1 Executive Summary
1.1 | A DTH Shake‐up? The number of TV households stands at 13.5 million.
By far the highest penetration of pay‐TV households
Despite the global economic crisis and the many is in Metro Manila (population 14 million) where
structural problems faced by the Philippines 27% of homes passed by a cable service view
economy, the pay‐TV market should see an overall subscription TV services.
market expansion of around 5% this year ahead of a
2.5‐3.5% growth for the economy as whole. Nationally, 51% of the population is under the age of
25 and more than half live in urban areas. Mobile
Indeed, the Philippine pay‐TV industry should expect teledensity stands at 73 million subscribers, with
some modest increase in revenue over the next few fixed line subscribers at 4 million households. Almost
years but piracy, lack of legislative reforms and all TV households have colour television. Broadband
economics will restrict the pace of growth. Major penetration stands at 4%.
urban centers where there is critical mass are the
main focus for investors. Thus the legitimate pay‐TV market has been slow to
grow with an estimated 1.5 million and 100,000
With a population of 92 million (18.26 million cable TV and DTH subscribers respectively.
households), GDP per person stands at US$1,866,
just below Mongolia and Sri Lanka, and just above A key factor holding back national growth remains
Pakistan and Vietnam. poverty – the World Bank estimates 40% of the
population lives on less than US$2 a day or US$60
per month.
The Philippines: Subscribers by Monthly Household Income
35
30
25
20
15
10
0
Below P8,000 ‐ P10,000 ‐ P15,000 ‐ P25,000 ‐ P60,000+
P7,500 9,999 14,999 24,999 59, 999
% Philippines population Access Any Subscription TV at Home
Source: Synovate Media Atlas Q108‐Q408
The Philippines: Subscribers by Operator
35
30
25
20
15
10
5
0
Any Subscription TV SkyCable
Destiny Home Cable Others
% Access at Home (People 15+)
Source: Synovate Media Atlas Q108 – Q408
But other factors restraining the growth of from basic tier analogue delivery to broadband
subscription TV have been the overbuilding of cable internet and even Pay Per View services.
systems (multiple operators competing solely on
price within franchise areas) and a lack of The majority of cable TV subscription rates remain
enforcement of an already weak intellectual low thanks to the high level of poverty even where
property rights regime (signal theft). there is critical mass in areas such as Metro Manila,
Cebu, Davao City and Baguio. This leaves much room
The weak regulatory environment has led to either for further growth. Monthly cable subscriber rates
outright piracy by commercial entities or endemic vary from P250‐300 (US$5.65‐$6.40) in the provinces
under‐reporting of subscriber numbers by licensed to P1000 (US$22.60) in the upscale areas of Manila.
operators. Both issues are major problems for
legitimate domestic operators and the suppliers of The dominant cable player is SkyCable, accounting
international programming (the bulk of cable for an estimated one third of national cable
content) alike. penetration if we include partial investments in
subsidiaries such as Home Cable and Sun Cable in
However, the gradual deployment of digital systems Cebu, Davao City and Baguio.
should create greater transparency of subscriber
numbers, permit an increase in ARPU as more SkyCable, which launched in the late 1980s, is owned
premium tiers are rolled out and make individual and operated by the Lopez Group, which also owns
line‐tapping more difficult. and operates ABS‐CBN, one of three dominant free
to air broadcasting networks.
Meanwhile, the deployment of new DTH platforms
may energise the nationwide market, buoyed by the The Lopez Group and its related Benpres Holdings
fact that MediaQuest, the media partner of telco until recently held a firm grip on the Manila Electric
behemoth Philippines Long Distance Telephone Company (Meralco), the biggest power company in
Company (PLDT), has recently joined the DTH fray the country with management of a significant
through Cignal TV. percentage of the electricity poles in Metro Manila
(used for electricity and cable TV distribution) and
1.2 | Cable TV Services nearby suburbs and provinces. Through its First
Philippine Holdings and Benpres units, the Lopez
Group controls a 13.4% stake, while the First Pacific
Currently, there are some 700 CATV systems under group, through national telco PLDT and Metro Pacific
management (out of 1,500 entities holding cable Investments, owns 34.7%.
licenses from the National Telecommunications
Commission) that provide a broad range of services,
The SkyCable system has now digitized around 90% Systems, which later changed its name to
of its network in Metro Manila enabling it to better Mediascape. The related MediaQuest also has a
control individual households illegally tapping into minority stake in The Philippine Star newspaper.
its network, among other advantages.
Another relatively new entrant to the DTH market is
Other MSO style operators include Global Destiny G‐SAT, which is owned by Global Broadcasting and
Cable, Cable Link, Central CATV and Pacific CATV. Multimedia (GBMI), a joint venture between cable
operator Global Destiny Cable and the Tieng family’s
1.3 | DTH Services Solar Group. The Solar Group holds rights to sports,
film and TV distribution, production and broadcast
divisions. It controls several free‐to‐air and CATV
A major shake‐up of the Philippines pay‐TV market channels, including ETC, 2nd Avenue, Basketball TV,
could be in the offing, as new investment comes on‐ Solar Sports and CS9.
line from MediaQuest, which in July 2009 launched
its Cignal TV DTH platform. The Cignal TV platform is The third DTH provider is Dream Satellite TV, which
distributed via Ku‐band transponders on the NSS‐11 claims around 45,000 subscribers. Owned by the
satellite. Cojuangco family and operating from the Agila‐2
satellite, the Dream platform comprises some 30
Cignal TV offers 22 Standard Definition channels, of channels, many of which have been available
which 11 are free‐to‐air, plus a bouquet HDTV and regionally via unauthorised IRDs.
VOD channels.
The MediaQuest DTH offering may be strengthened 1.4 | Pay‐TV Content Wholesalers
by the recent purchase of a stake in ABC
Development which operates the country's third‐ Two competing organisations dominate the
largest free to air network TV5 (formerly ABC‐5) and wholesale distribution of pay‐TV content in the
holds a 100% stake in Primedia, which in turn is a Philippines, Cable Boss and ACCION. Cable Boss, its
programme producer and air‐time wholesaler. TV5 affiliate Omnicontent Management, and ACCION
currently ranks third in the Philippines after the represent almost all of the major international
Lopez Group’s ABS‐CBN and GMA Network. channel brands such as HBO Asia, CNN, Discovery,
ESPN and Fox International Channels for sales of
MediaQuest’s other investments include a 30% stake international cable TV programming. (Contracts with
in business newspaper BusinessWorld and a 51% SkyCable are negotiated directly by programmers.)
interest in Nation Broadcasting. In July 2007 it also
acquired licensed DTH firm GV Broadcasting
The Philippines: Share of Viewing in Subscription TV Homes
120
100
80
63 64 62 58 60 67
60
40
37 36 38 42 40 34
20
0
All Youth Upmarket Kids Men Women
% Subscription TV % Terrestrial TV
Source: Nielsen Audience Measurement Q109 – Q209
1.5 | Fixed broadband, Mobile and 1.7 | Regulatory Environment
Internet
Politics plays a significant part in the pay‐TV
Fixed broadband penetration in the Philippines regulatory environment within the Philippines and
stands at 4% of households with PLDT controlling there is not expected to be significant movement on
63% of the DSL market. PLDT also leads the mobile this front until well after early May’s presidential
broadband market through Smart Communications election.
which has 700,000 subscribers.
The late president Corazon Aquino signed an order
PLDT had 1.2 million broadband subscribers at the in June 1987 regulating the operation of cable
end of June 2009 while nearest rival Globe Telecom antenna television (CATV) systems in the Philippines.
had 379,308 with smaller players BayanTel (Benpres)
and Sun Cellular a distant third and fourth. In the meantime, a bill to regulate the pay‐TV
industry (the Convergence Bill) has been stalled in
The NTC announced in June last year it would issue the House of Representatives for 10 years. Under
new rules to liberalize the broadband industry to the current constitution, cable TV is defined as
spur universal access by 2010. "Media" and is thus barred from any foreign
investment. Passage of the draft Convergence Bill
Under the government’s Medium Term Philippine would open pay‐TV infrastructure up for a level of
Development Plan, all municipalities should have Foreign Direct Investment (FDI), at least.
100% access to broadband by 2010. However, the
plan is seriously delayed and a long‐time off At present, industry infrastructure regulation is
becoming a reality. covered by the NTC whose composition is influenced
largely by major operators and political leaders. The
Meanwhile, PLDT’s Smart Communications had 35.3 NTC, much of whose agenda is driven by traditional
million mobile subscribers at the end of 2008. Globe telecoms issues, has had four commissioners in two
Telecom (45% owned by SingTel and 34% by the years, apparently largely due to lobbying related to
local Ayala group) had 25 million mobile customers. the Digital TV standard as well as telco issues.
Intellectual property rights enforcement for the pay‐
1.6 | Digital Transition TV sector remains weak despite a 2006
Memorandum of Agreement signed between the
The transition from analogue to digital terrestrial NTC and the Intellectual Property Office (IPO) to
television (DTT) has moved slowly with the migration cooperate fully on issues pertaining to pay‐TV piracy.
deadline now extended to 2015. The NTC is said to In theory, the IPO is mandated to process piracy
be in favor of the European Digital Video Broadcast complaints and pass them to the NTC for action
Terrestrial (DVB‐T) as the preferred platform for against infringing operators. In practice this has yet
DTT. to deliver a decisive decision in favour of the rights
holders.
The US‐based Advanced Television Systems (ATS)
and Japan’s Integrated Services Digital Broadcast The criminal justice system for copyright issues
(ISDB) technical standards are also being considered within the Philippines remains frozen and, despite
but most of the industry favors the European complaints filed by industry groups on behalf of
platform. content owners, has yet to deliver a decisive result.
ASEAN has already adopted the European standard. The Movie and Television Review and Classification
A number of players have already started testing the Board (MTRCB) is mandated to have oversight of
European platform including the country’s two content issues but is largely passive within the pay‐
biggest television networks ‐ ABS‐CBN and GMA7 ‐ TV sector.
and Smart has tested DVB‐H for mobile TV.
Meanwhile, the technical standard for digital pay‐TV
services seems to have been settled as DVB.
ABOUT CASBAA
The Cable & Satellite Broadcasting Association of Asia (CASBAA) is dedicated to the promotion
of multi‐channel television via cable, satellite, broadband and wireless video networks across
the Asia‐Pacific. CASBAA represents some 130 Asia‐based corporations, which in turn serve
more than 3 billion people.
Among the highest priorities for CASBAA are the promotion of free and fair markets and the
protection of intellectual property rights, as well as the development of thriving and
competitive domestic communications industries.
The Association is also dedicated to the development of regulatory best practices which assist
the interests of both domestic and international participants within the multi‐channel and
communication communities.
CASBAA undertakes a number of initiatives including the pursuit of copyright enforcement,
promotion of cable and satellite as a key advertising medium, lobbying activities, the
promotion of regional technical standards, regulatory roundtables, and educational seminars.
CASBAA Executive Office
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Central, Hong Kong
Tel: +852 2854 9913
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