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Philippines in View 2021 Executive Summary Philippines in View 2021

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Philippines in View 2021 Executive Summary Philippines in View 2021 PHILIPPINES IN VIEW 2021 EXECUTIVE SUMMARY PHILIPPINES IN VIEW 2021 EXECUTIVE SUMMARY 1. Overall TV Market Environment has resulted in a digital video ad spend year on year growth of 4.8% and a total digital The Philippine television (TV) market has advertising spend in the Philippines being experienced major disruptions in recent years, valued at US$558 million in 2020, despite total including the ongoing effects of the coronavirus ad spend shrinking slightly by 4% year on year. 2019 (COVID-19) pandemic. Nonetheless, the growth of online video continues unabated, The local TV industry has gone through a powered by the increasing number of mobile rollercoaster in comparison. Kantar Group internet users. This puts pressure on an research showed that total TV viewership industry in the process of digitalization as it (traditional or free-to-air (FTA) TV and pay TV undergoes switching to the Japanese ISDB-T or cable and satellite) saw a significant drop standard for digital terrestrial television (DTT), between 2019 and 2020, with afternoon and expected to be completed in 2023. evening dayparts seeing the biggest change (Figure 1). Much of this could be attributed to More Filipinos are turning to the internet, a slew of devastating incidents that captured and alongside traditional modes of viewing, the attention of Filipinos, including the forced almost all of them are accessing online video shutdown of Philippine TV giant ABS-CBN and from mobile devices wherever they want and the ongoing COVID-19 pandemic that put the whenever they want1. That surge in demand country into a nationwide lockdown. Figure 1. TV Viewership (Traditional and Pay TV) in 2020 (By Dayparts) Total TV decreased significantly in 2020 compared to past years The afternoon and evening dayparts experienced the biggest drop. 2017 2018 2019 2020 50 45 40 35 30 25 Rtg% 20 15 10 5 0 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 25:00 Source: Kantar Media Channel: Total TV; Unit: Rtg%; Region: Total Philippines 1 https://datareportal.com/reports/digital-2020-philippines 1 PHILIPPINES IN VIEW 2021 While Filipinos spent more time on TV after a on mobile commerce or mobile advertising, nationwide lockdown was imposed to curb the livestreaming platform Bigo Live and video spread of COVID-19, the bump in viewership streaming subscription service Netflix topped the was quickly offset by the decision of Congress list of apps Filipinos spend money on2. to revoke the franchise of broadcasting firm ABS-CBN in May 2020, forcing the network and According to Kantar, total advertising spend eventually ABS-CBN TV Plus and Sky Direct to on FTA and pay TV from January to September go off-air. 2020 plunged by 20% year on year to around P313 billion. This translated to 1,042,179 Audiences continued to watch other channels, campaign insertions for TV during the period with GMA quickly taking up the market share (down 7% previously), or 420,703 minutes of left by its competitor. Yet, overall TV viewership total advertising time aired. 90% of the spend has not recovered since. By the end of the year, went to FTA networks, while the remaining 10% viewership dropped to almost one hour less went to pay TV. compared to the beginning of the government’s “enhanced community quarantine” (ECQ), However, industry revenue decline is a fallout of recovering only slightly with the entry of FTA general economic turmoil due to the COVID-19 blocktime broadcast network A2Z — the joint pandemic rather than the symptom of a venture of ABS-CBN and ZOE Broadcasting flailing industry. Disruptions in the landscape Network, Inc. — in October. Likewise, TV reach could very well signal a paradigm shift in declined quarter on quarter until it saw a the relationship between consumers and TV significant bounce back in the fourth quarter of networks and, in particular, the manner in 2020. which consumers access media. Over-the- top (OTT) media services, which offer media There is a likely possibility that many TV directly to viewers via the internet, and include viewers are turning to online platforms for their online curated content (OCC) services such viewing experiences. There were roughly 73 as Amazon Prime Video, Netflix, Viu, and million internet users and 173.2 million mobile WeTV have continued to grow, with revenue connections in the Philippines recorded in in the total SVOD segment projected to reach January 2020. Of those internet users, 98% were US$101 million this year.3 With an expected recorded to be consuming online video, 69% compounded annual growth rate (CAGR) of were found watching TV content via a streaming 13.56%, market volume could hit US$167 subscription every month. When ranked by million by 2025. User penetration will be 5.7% total consumer spend excluding revenues made this year and is expected to hit 6.9% by 2025. 2 https://datareportal.com/reports/digital-2020-philippines 3 www.statista.com/outlook/dmo/digital-media/video-on-demand/video-streaming-svod/philippines 2 PHILIPPINES IN VIEW 2021 2. OCC Market Environment Currently there are three leading telecommunications companies in the The COVID-19 pandemic has put the Philippines Philippines: DITO, Globe Telecom, Inc., and into one of the world’s longest lockdowns, PLDT, Inc. (including its mobile arm Smart restricting economic activity and mobility Communications, Inc.). Other major internet among the population. The more-than-a- service providers in the country are Converge year-long (and counting) lockdown and the ICT Solutions, Inc. and Sky Cable. consequent, temporary shutdown of major entertainment establishments, like movie One industry expert noted that there has houses, have led to an increase in the demand been a recent rise of OTT consumers in the for online video streaming platforms. Philippines, as more Filipinos stay at home in accordance with the COVID-19 restrictions. Around 36 million Filipinos consumed OTT Around 55% of OTT consumers are watching content last year. In a 2020 survey about more content amid the pandemic and 65% wish media consumption habits of around 4,500 to continue watching more post-pandemic.6 Southeast Asian consumers, 32% of the Filipino respondents were heavy OTT users — Piracy of video content is still prevalent in the consuming more than four hours of content country, making this another obstacle for OCC daily.4 to thrive according to an industry expert. There were an estimated 73.91 million Filipino In a survey commissioned by AVIA in 2020, internet users as of January 2021, representing YouGov reported that 49% of 1,098 surveyed 67% of the population. Of those internet users, Filipinos still access streaming piracy websites the data shows that the average time they or torrent websites. It also showed that 47% of spent watching TV, including broadcast (linear) consumers who accessed pirate sites cancelled TV and content delivered via streaming and some part of their local and foreign content VOD services averaged three hours and 30 services.7 minutes per day. Meanwhile, the total time spent using the internet on all devices averaged OCC market in the Philippines ten hours and 56 minutes — topping 40 other Among the top ten apps in terms of consumer countries in the survey.5 spend in the Philippines last year, two of 4 https://pages.thetradedesk.com/rs/527-INM-364/images/The Future of TV Report Philippines.pdf 5 https://datareportal.com/reports/digital-2021-philippines 6 https://pages.thetradedesk.com/rs/527-INM-364/images/The Future of TV Report Philippines.pdf 7 https://avia.org/new-survey-shows-philippines-among-highest-in-online-piracy-in-southeast-asia/ 3 PHILIPPINES IN VIEW 2021 them offer online video content — Netflix for an online video subscription whilst the and YouTube, which ranked second and ninth, majority were willing to pay between P151 and respectively.8 According to App Annie, the P300.11 rankings are based on iOS App Store and Google Play earned from paid downloads and Competition in-app purchases and excludes earnings from Competition among OCC players in the in-app advertising.9 Philippines has kept challenging the dynamics and flexibility of these companies. Currently, Nearly all Filipinos aged 16 to 64 watch online there are more than ten active players in the videos while 83% watch vlogs and 82.2% listen market. However, challenges posed by the to music streaming services. This was also pandemic forced some players to pull out of the evident after YouTube took the lead across most competition or shift gears differently. used social media platforms after cornering a 97.2% share in 2020.10 As of April 2020, players HOOQ and Fox+ are no longer accessible in the country. Indeed, HOOQ Meanwhile, more than half of the Filipinos has subsequently struggled globally and closed. surveyed by Ovum in 2019 were subscribed to Meanwhile, Fox+ has announced through its at least one paid online video service bundled telco partner Globe that it is no longer available to either a mobile or fixed phone line. 11% of in the country, in preparation for the new them were willing to shell out more than P600 Disney+ platform. Table 1. Major OCC Players in the Philippines Local players Regional and international players Cignal Play Amazon Prime Video GMovies Apple TV+ iWantTFC HBO Go NBA League Pass Netflix Viu WeTV iflix YouTube/YouTube Premium 8 www.appannie.com/en/go/state-of-mobile-2021/ 9 https://s3.amazonaws.com/files.appannie.com/2101_State_of_Mobile_2021_Methodology_EN.pdf 10 https://datareportal.com/reports/digital-2021-philippines 11 www.amdocs.com/sites/default/files/Ovum-OTT-market-study-2019-20.pdf 4 PHILIPPINES IN VIEW 2021 Mergers and acquisitions have also been as a more competitive pricing strategy against a strong opportunity for OCC players to international players that are also active in the strengthen their market position.
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