Sans political ads, GMA fumbles in H1
Broadcast leader GMA Network Inc. is struggling to grow its business outside the election cycle, nearly wiping out its profit in the first half due to the absence of political ads.
Manila, Philippines — GMA Network Inc., the top broadcast leader, is facing significant challenges in expanding its business beyond election periods, losing nearly all its profits in the first half of the year due to the lack of political advertisements. In its latest financial report, GMA reported a drastic 95% reduction in profit to P89.93 million, down from P1.97 billion a year ago, as the network experienced a decline in revenue.
Revenue fell by 35%, reaching P6.61 billion, primarily due to the absence of campaign ads that typically bring in more than P2 billion. Even without considering the election period, GMA would have still seen a 17% drop in revenue. The network blamed the revenue decline on a challenging economy, advertisers’ reluctance to place placements, and geopolitical tensions in the Middle East, which forced advertisers for fast-moving consumer goods to cut back on spending.
GMA's advertising revenues dropped by 37%, to P5.89 billion, and the government also reduced ad spending as part of its focus on urgent measures. The broadcast leader acknowledged that the overall shift in consumer media consumption from traditional free-to-air channels to internet protocol-based platforms negatively impacted overall advertiser spending.
To cope with the situation, GMA cut its expenses by 11% to P6.71 billion in the six months to June. The network reduced production costs by 14% to P3.65 billion and trimmed program portfolios, while also decreasing general and administrative expenses by 7% to P3.06 billion. Despite the difficulties, GMA maintained its dominance in free TV, with its core channel GMA-7 leading in both urban and total Philippines.
The network's features program, Kapuso Mo, Jessica Soho, remains the most-watched program, followed by 24 Oras and The Master Cutter. Online, GMA holds the highest ranking in Southeast Asia, surpassing competitors like ABS-CBN, Thailand’s GMM Grammy Plc, and Indonesia’s Kompas. Additionally, GMA has expanded its YouTube subscriber base to over 41 million as of June, as the company seeks to diversify its revenue streams through online channels.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
