ABS-CBN saw its net income increase by 44% in the last six months as it reaps the rewards of veering away from traditional income streams to focus on its now booming consumer business.
Revenue has increased 3% to P16.4 billion in the January-June period compared to last year after removing election-related ad spending. Net income has grown at a much faster pace from P663 million to P995 million for the comparable period.
Ad revenues still accounted for the bulk, equal to 54% of total revenue or $8.8 billion. But the surprise for the media conglomerate’s first semester is the rosy performance of its consumer business, now just a few notches from its breadwinner.
At $7.5 billion, consumer sales now contributes 46% of ABS-CBN’s total revenues for the period, up 8.5% from 2013. In comparison, ad sales have actually slipped by 13.6%.
Among big drivers behind the trend is Sky Cable, ABS-CBN’s pay TV network, which hauled in P3.82 billion, a 12% increase from last year’s P3.4 billion.
Strong sales of Star Cinema movies also supported the period’s revenue hike with P876 million, a 15.3% increase from last year’s P760 million. ABS-CBN touts that three out of its eight movies raked in over P300 million.
ABS-CBN began rapidly expanding its portfolio outside of its core media business last year. In June, the company entered a network sharing deal with Globe Telecom in a bid to enter the telco industry with ABS-CBNMobile. A year after, ABS-CBN touts that the venture now as over 537,000 subscribers to date.
Another business ABS-CBN entered in 2013 was O Shopping Channel, a P200 million partnership with Korean shopping giant CJ O Shopping Corporation to revive its home shopping business that flopped in the 90’s. The network reports that it is generating over P1 million in daily sales.
ABS-CBN chairman Eugenio Lopez III said last May that consumer sales will eventually exceed its ad revenues in the next five to 10 years.
“We are moving away from reliance on advertising to consumer revenues. There is only so much growth you can get out of advertising. We want to monetize our content beyond just advertising by directly relating it to what consumers want and let them pay for it directly,” he adds.
Anticipation is now mounting for Kidzannia, ABS-CBN’s venture into theme parks. The P1-billion miniature city targeting kids is schedule to open in Bonifacio Global City next year.