ABS-CBN, DirecTV to sign renewal deal
Lopez-led ABS CBN Broadcasting Corp. (ABS-CBN) said it expects to complete the deal to renew contract with US-based DirecTV Inc. by October next year.
"Our deal with DirecTV will be completed by October next year," Eugenio "Gabby" Lopez III said.
On July 21, 2005, ABS-CBN and its subsidiary, ABS-CBN International, signed an affiliation agreement with DirecTV, one of the leading DTH system providers in the US.
Under the deal, DirecTV will have an exclusive right to air The Filipino Channel (TFC) package on its DTH platform. In return, DirecTV will pay ABS-CBN based on the number of subscribers, new and existing, who will avail of the service during the migration period.
Lopez said the migration period ended last August, which has been a good deal for the company and he added that the new agreement could double the subscriber growth in the medium term.
"The growth of the subscribers is very encouraging. When we are on our own satellite system the number of subscribers that we are generating every month is between 2,000 and 3,000 and we only have 120 dealers and now we have 12,000 dealers all over America with strong satellite system," Lopez said.
At present, Lopez said the company averaged at 6,000 subscribers a month and license fees generated last year by its global operations reached P1.6 billion.
In the first half of the year, ABS-CBN Global contributed 75 percent of total revenues. It also posted a 3-percent decline in sales to P1.704 billion as direct-to-home (DTH) subscription revenues in North America were reduced by half following the deal with DirecTV, which provided for a 50:50 revenue-sharing upon migration to the DirecTV platform.
ABS-CBN profits reached P516 million for the first six months of the year from P211 million in the same period last year and added that it is beginning to reap the benefits of its cost-cutting efforts. Darwin G. Amojelar, The Manila Times
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