PHILIPPINES IN VIEW PHILIPPINES TV INDUSTRY-IN-VIEW Table of Contents PREFACE ................................................................................................................................................................ 5 1. EXECUTIVE SUMMARY ................................................................................................................................... 6 1.1. MARKET OVERVIEW .......................................................................................................................................... 6 1.2. PAY-TV MARKET ESTIMATES ............................................................................................................................... 6 1.3. PAY-TV OPERATORS .......................................................................................................................................... 6 1.4. PAY-TV AVERAGE REVENUE PER USER (ARPU) ...................................................................................................... 7 1.5. PAY-TV CONTENT AND PROGRAMMING ................................................................................................................ 7 1.6. ADOPTION OF DTT, OTT AND VIDEO-ON-DEMAND PLATFORMS ............................................................................... 7 1.7. PIRACY AND UNAUTHORIZED DISTRIBUTION ........................................................................................................... 8 1.8. REGULATORY ENVIRONMENT ............................................................................................................................... 9 2. PHILIPPINE TV, VIDEO AND BROADBAND MARKET ENVIRONMENT ............................................................ 10 2.1. ECONOMIC ENVIRONMENT ............................................................................................................................... 10 2.2. TV PENETRATION ............................................................................................................................................ 12 2.3. FIXED & WIRELESS BROADBAND PENETRATION ..................................................................................................... 12 2.4. GENERAL TV AND ONLINE VIEWING BEHAVIOR ..................................................................................................... 13 2.5. PAY-TV AND FTA IN RELATION TO PHILIPPINE SOCIAL STRATA ................................................................................. 15 2.6. CHANGING VIEWING BEHAVIOR IN THE PHILIPPINES ............................................................................................... 16 2.6.1. USAGE TRENDS IN CONSUMING VIDEO CONTENT .............................................................................................. 16 2.6.1.1. MOST-USED SOURCES OF VIDEO CONTENT ..................................................................................................... 16 2.6.1.2. NEW TRENDS IN WATCHING VIDEO CONTENT .................................................................................................. 19 2.6.2. DEVICES USED MOST FREQUENTLY ................................................................................................................ 19 2.6.3. SATISFACTION RATINGS ................................................................................................................................ 20 2.6.4. VIEWING SENTIMENTS AND VALUES ............................................................................................................... 21 3. OVERVIEW OF PHILIPPINE FREE-TO-AIR (FTA) BROADCASTING ................................................................... 24 3.1. TV INDUSTRY LANDSCAPE AND KEY PLAYERS OVERVIEW ......................................................................................... 24 3.2. MAIN FTA BROADCASTERS ............................................................................................................................... 25 3.2.1. ABS-CBN CORP......................................................................................................................................... 25 3.2.2. GMA NETWORK INC. .................................................................................................................................. 27 3.2.3. TV5 NETWORK INC. .................................................................................................................................... 29 3.2.4. SOLAR ENTERTAINMENT CORPORATION .......................................................................................................... 31 3.2.5. OTHER PLAYERS ......................................................................................................................................... 32 3.3. FTA CONTENT AND PROGRAMMING ................................................................................................................... 34 3.4. FTA SWITCHOVER TO DIGITAL ........................................................................................................................... 36 3.5. DTT MARKET ADOPTION.................................................................................................................................. 36 4. PHILIPPINE PAY-TV STRUCTURE ................................................................................................................... 37 4.1. PAY-TV SUBSCRIBERS – MARKET SIZE ................................................................................................................. 37 4.2. PAY-TV SUBSCRIBERS – GROWTH TRENDS ........................................................................................................... 38 4.3. PAY-TV OPERATORS’ MARKET SHARE AND SUBSCRIBER GROWTH ............................................................................ 39 4.3.1. SKY CABLE ................................................................................................................................................. 40 4.3.2. CIGNALTV ................................................................................................................................................. 42 4.3.3. GLOBAL SATELLITE (GSAT) ........................................................................................................................... 43 4.3.4. OTHERS – SMALL TO MEDIUM OPERATORS ..................................................................................................... 43 Page 1 of 71 PHILIPPINES TV INDUSTRY-IN-VIEW 4.4. PAY-TV INDUSTRY AND MAJOR OPERATOR REVENUES ........................................................................................... 44 4.5. PAY-TV AVERAGE REVENUE PER USER (ARPU) .................................................................................................... 46 4.6. PAY-TV PRICING – PAYMENT, ENTRY, RECURRING AND TOP-UP FEES ....................................................................... 47 4.7. PAY-TV CONTENT AND PROGRAMMING .............................................................................................................. 48 4.8. BUSINESS DEVELOPMENT AND OTHER INDUSTRY OPPORTUNITIES............................................................................. 50 4.9. TECHNOLOGICAL ISSUES IN THE PHILIPPINE TV INDUSTRY ........................................................................................ 52 4.9.1. ENCRYPTION AND CONDITIONAL ACCESS SYSTEMS (CAS) ................................................................................... 52 4.9.1.1. SKY CABLE ................................................................................................................................................. 52 4.9.1.2. GSAT ....................................................................................................................................................... 53 4.9.1.3. CIGNALTV ................................................................................................................................................. 53 4.9.1.4. DREAM SATELLITE TV .................................................................................................................................. 54 4.9.2. SATELLITES AND SATELLITE BANDS .................................................................................................................. 54 4.9.2.1. CIGNALTV ................................................................................................................................................. 54 4.9.2.2. SKY DIRECT ................................................................................................................................................ 54 4.9.2.3. GSAT ....................................................................................................................................................... 54 4.9.2.4. DREAM ..................................................................................................................................................... 54 5. VIDEO CONTENT PIRACY IN THE PHILIPPINES .............................................................................................. 55 5.1. CONSUMER PIRACY IN PHILIPPINE PAY-TV MARKET .............................................................................................. 55 5.2. STAKEHOLDER VIEWS ON PIRACY IN THE PHILIPPINES ............................................................................................. 58 6. ADVANCEMENTS IN OTT, VOD AND OTHER ALTERNATIVES ......................................................................... 59 6.1.