PCC: ABS-CBN’s free TV exit resulted to market concentration

The commission has examined the current landscape of Philippine television.

Recently, the Philippine Competition Commission (PCC) published the study titled “Blocktiming Practices in the Philippine Free TV Industry”, which examines the blocktiming practices in the free TV industry to assess the effects to competition of industry developments.

Blocktiming, as it was defined in the report, “refers to agreements wherein content producers buy airtime (or “blocks” of time) from TV networks to broadcast their programs and content.”

Discussed among others the non-renewal of ABS-CBN Corporation’s legislative franchise to operate terrestrial broadcast stations in 2020, which caused the network to shut its operations in May of that year.

The PCC study saw the increase in market concentration following the exit of ABS-CBN in the free-to-air sphere, with its rival-turned-partner GMA Network now commanding roughly 93% of the market.

The study also evaluated the ability of a dominant network to engage in input foreclosure, which occurs when a TV network refuses to offer time slots to content producers that are not affiliated with the network; or when it charges exorbitant prices for time slots, making it difficult for non-affiliated content producers to secure them.

“This concentration raises concern about competition, access to broadcasting frequencies, and market diversity. The exercise of market power may harm competition by curbing viewer choices and restricting the entry of content producers,” the PCC report read.

However, the study found that the existing industry practices disincentivize TV networks from foreclosing airtime, with networks already prioritizing their own content over blocktime agreements, as seen in their historical programming choices.

Foreclosing airtime could also reduce audience reach and make networks less attractive to advertisers, impacting revenue as foreclosure strategies limit the range of aired television content.

Hence, this may lead to a decrease in audience reach and reduce the number of potential advertisers and revenue-generating opportunities, according to the commission.

The PCC study also pointed the memorandum of the National Telecommunications Commission (NTC), where the agency aimed to regulate and limit blocktime agreements to 50% of a network’s airtime.

The Philippine Competition Commission said that requiring approval from the NTC “could make it more difficult and expensive for firms to enter the market, raise prices, create regulatory uncertainty, and distort competition.”

Additionally, even prior to the imposition of the limit, most TV networks “did not allovate more than half of their airtime to such deals,” as these stations have prioritized their original content.

The anti-competitive impact of the loss of ABS-CBN’s franchise and the restriction in blocktime programming is mitigated by various factors, such as the availability of free TV substitutes like streaming platforms — namely iWantTFC, Netflix, and YouTube.

“Indeed, the media landscape in the Philippines is undergoing significant shift towards internet-based content delivery,”the PCC underscored.

Additionally, “To thrive in this evolving landscape, industry stakeholders must grasp how these elements impact the sector and tackle competition issues effectively.”

Lastly, “[…]the success of free TV as a content distribution medium relies on robust competition and a supportive regulatory framework. Enforcing regulations that foster fair access to airtime, prevent discrimination, and encourage diversity and innovation can address these competition concerns and protect consumer interests.”

At present, there are measures filed in the 19th Congress that seek to revive the broadcast franchise of ABS-CBN, nearly five years after its shutdown.

Though, the company has largely shifted to a content production and provision powerhouse, as the corporation forged partnerships with surviving TV networks TV5, GMA, A2Z, and ALLTV in recent years.

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