In the Philippines, Fine Line Between TV and Politics

International Herald Tribune – August 15, 2005

Carlos H. Conde

 

 

MANILA ABS-CBN Broadcasting, the largest broadcast network in the Philippines, has often been called one of the most powerful political parties in the Philippines. After all, several of its celebrities have gone on to win government positions, the most popular being Noli de Castro, the vice president.

 

The foray into politics of some of ABS-CBN's talent is in large part a testament to the reach and power of the network. It has dominated the airwaves and set the trend for broadcasting here since 1986, after its owners, who had been persecuted by the dictator Ferdinand Marcos, returned to the Philippines.

 

But starting last year, something changed. Although ABS-CBN still is the most widely watched network outside the capital, it lost its dominance - in terms of ratings and audience share in the all-important metropolitan Manila market - to GMA-7, the second-largest network. Today, not one ABS-CBN program is in the Top 10 list prepared by AGB Nielsen Media Research. And profit has been falling.

 

Some explanations have been offered for ABS-CBN's decline, among them that GMA-7's prime-time programming, which is dominated by several fantasy series that draw on Filipino folklore and mythology, simply got better.

 

Or that ABS-CBN became lax and overconfident. "If you're No. 2, you have greater freedom to experiment," said Chay Florentino Hofileña, a media analyst who teaches journalism at Ateneo de Manila University.

 

"If you're No. 1, you tend to be conservative, to stick to the formula, when what you should be is bold and daring," he added.

 

Another explanation, according to media analysts, is that ABS-CBN became a less credible source of news precisely because of that foray into politics by several of its popular news personalities. De Castro, who has a good chance of becoming president in 2010, could not seem to shake off the perception that he is a puppet of the Lopez family, which owns the network.

 

The Lopezes are considered one of the most powerful business and political families in the country. Aside from television, radio and publishing interests, the family also owns Meralco, the power company that services metropolitan Manila, and Maynilad Water Services, a utility that operates in the capital. Several members of the extended family have held public office.

 

"People are always suspicious of reporters and anchors who enter politics," Hofileña said of De Castro.

 

There is also the observation that ABS-CBN newscasts had become too focused on street crime and celebrity and that the network's anchors and reporters had become celebrities themselves, something that, as many media specialists say, can erode journalistic credibility.

 

In contrast, GMA-7's news and current-affairs programs were more hard-nosed and aggressive, Hofileña said. GMA-7 devoted more time and attention to news. During the 2004 elections, for example, it ran a comprehensive series on all the presidential candidates.

 

In May 2001, at the height of protests against Gloria Macapagal Arroyo by supporters of former President Joseph Estrada, whom Arroyo, his vice president, had replaced that January, ABS-CBN vehicles and equipment were destroyed by Estrada loyalists, and some of its reporters were harassed and accused of being biased.

 

Then, in January 2005, the widow of the actor Fernando Poe Jr., who ran for president against Arroyo, vented her anger on ABS-CBN during an interview with one of the network's anchors, accusing it of bias. Whether true or not, the accusation damaged ABS-CBN's reputation.

 

ABS-CBN's decline led both networks to air more sensationalized programming in a bid for ratings. And both GMA-7 and ABS-CBN reaped some backlash after they showed sex videos of celebrities, one of them of a midget taking a bath. Some advertisers threatened to pull their commercials if the networks did not stop the practice.

 

The result of all this is a decline in quality, viewership and profitability that ABS-CBN is now grappling with. Although profit for the second quarter was an improvement over the first quarter, ABS-CBN's income for the first half of this year - 185 million pesos, or $3.3 million - was still 67 percent lower than in the first half of last year. Airtime and other broadcast-related revenue was down 6 percent, while household ratings in metropolitan Manila in the first half fell to 14 percent from 16 percent last year.

 

"I actually downgraded the earnings forecast for ABS-CBN for the first quarter because it was really below expectations," said Laura Dy-Liacco, an analyst at ATR Kim Eng Securities. "I don't think I was the only analyst surprised by the performance."

 

Now that ABS-CBN has been pushed down, it has been forced to experiment, and perhaps to rethink its strategies and outlook, analysts said. Certainly, there was the realization that things need to change in the newsroom. So the network hired Maria Ressa away from CNN, where she had been the chief of the Jakarta bureau. A Filipino-American, Ressa began her broadcasting career at ABS-CBN. Her mandate now is to raise the network's journalism. She began by training people in the newsroom. She also trimmed some staff.

 

Since Ressa came aboard, there has been a noticeable improvement in the way ABS-CBN presents the news. Camera shots are better framed, stories are punchier, and reports on politics and national affairs have pushed crime stories to the middle of the broadcast.

 

She also knocked down what she called the wall between the editorial and technical departments, so the two staffs could work together more smoothly. The network has invested in cameras and other new equipment. The result is a broadcast quality that is warmer and more intimate.

 

Perhaps more important for the news department, Ressa said, is the support given by Gabby Lopez, the network's chairman and chief executive, and Luis Alejandro, the president and chief operating officer, to these changes. "This is headed where I want to go, thanks to these two men," Ressa said.

 

Hiring Ressa, said Hofileña, the media analyst, "is probably one of the best decisions made by Lopez."

 

"Maria has a very clear vision of what journalism is and what a big network like ABS-CBN should be doing," he said.

 

With the network playing catch-up to GMA-7, it needed to improve the quality of its entertainment programs as well as its news. This resulted in a 10 percent increase in production costs in the first half of the year, as it focused on its own fantasy series, which, while popular, are more expensive to make because of their special effects.

 

At the same time, the network is retiring 360 employees, or 20 percent of the work force, by the end of the year as part of its cost-cutting program. The network is confident that it can recoup the cost of the retirements in less than two years; it said the move could save 350 million pesos a year.

 

"We are sticking to our three-point recovery plan," Alejandro said. "The strategies of focusing on prime-time ratings, optimizing production cost and cutting expenses will be continuing."

 

The network is giving more attention to its global operations, mainly in the United States and the Middle East, where most Filipinos who work and live overseas are concentrated. It recently signed a partnership agreement with the U.S. satellite television provider DirecTV. In fact, its net sales for the first half of the year increased 19 percent, mainly as a result of its overseas operations. The network says it now has about 1.7 million viewers abroad.

 

The challenge now, Ressa acknowledged, is to disabuse viewers of the perception that ABS-CBN is, in effect, a political party. For the public, the perception persists.

 

This view is apparently prevalent in the investment community as well, as was demonstrated on July 8, when 10 of Arroyo's cabinet officials quit, calling for her resignation as well. Normally, the stock market would react negatively to such news. But on the Philippine Stock Exchange, the opposite happened: the stocks of ABS-CBN and other companies owned by the Lopezes rose sharply, almost single-handedly propping up the market.

 

The only explanation for that, analysts said, is that anything that shakes the administration is good for Noli de Castro, the former ABS-CBN news anchor and Arroyo's vice president.