Atty. Felipe L. Gozon has been steering GMA Network, the country's leading broadcast media network, as its chairman, president, and CEO since the year 2000.
Whatever successes the company is reaping today-ratings winner vis-à-vis other media companies, profitability for its shareholders, recognition locally and abroad for its award-winning programs, among many other things-is due in large part to his vision and leadership.
Although GMA operates arguably the country's most respected news and public affairs network, Gozon himself very rarely grants interviews. But on the occasion of the company's 72nd anniversary, we reached out to the captain of the Kapuso Network to pick his brains on a wide variety of topics, including the closure of their age-old rival ABS-CBN, the network's relationship with the new administration, combating fake news, and succession plans for the company.
We're publishing the interview in full here:
Esquire Philippines: GMA is celebrating its 72nd anniversary this year. Could you kindly tell us about the company's highlights over the past year? What milestones and accomplishments are you most proud of this past year?
Atty. Felipe L. Gozon (FLG): In the past year, despite the lockdowns, new COVID-19 variants, geopolitical tensions, rising fuel and commodity prices, and many other challenges, we are proud to say that GMA Network did not just survive 2021, but it thrived. GMA-7 continued to dominate Philippine television and online platforms, our second channel GTV also emerged as the second most-watched station in the country, and our AM and FM radio stations remained the undisputed number 1 stations in Mega Manila.
Our net income by full year 2021 stood at P7.57 billion or a 26 percent year-on-year increase, which is by far the highest in our history. By the close of the year, our balance sheet was robust with cash and we had no long-term debt. We have also been able to continue to post solid growth this 2022. We returned P6.56 billion of capital to shareholders last year, a 350 percent increase in our dividend yield.
In addition to GMA's stellar financial performance, GMA was included in two new indices launched by the Philippine Stock Exchange, namely the PSE Dividend Yield Index and PSE MidCap Index, which is a testament to our vision of giving the best returns to our shareholders.
Similarly, our other business units also yielded exceptional results. GMA Regional TV stations served more areas across the country and basked in double and triple-digit revenue growth. In 2021, GMA Regional TV launched two regional stations: GMA Bicol and GMA Zamboanga. This year, we also opened GMA Batangas, our 11th originating regional station.
GMA International also expanded to distribute our content in over 100 countries all over the world. It also increased the availability of GMA Pinoy TV OTT, app-based, internet-enabled outlets, and made the content available on Video on Demand.
For the Network's online efforts, GMA has become the first television network in the Philippines and the second in Southeast Asia to receive three Diamond Creator Awards from YouTube, for surpassing 10 million subscribers on three different channels. In 2021, the GMA Network portal amassed close to 2.5 billion views, our podcasts are at the top of the charts, GMA News sustained its viewership lead on YouTube and Facebook, and our social media followers continue to grow.
And as our core business continues to flourish, we established GMA Ventures, our corporate vehicle that will diversify our portfolio by strategic investments in sustainable businesses.
We also devoted our attention last year to fortifying our technology and content. We made substantial investments in commissioning 14 new stations, which brings our signal distribution network to 92 stations nationwide. We are working to ensure that our production and post-production facilities are at par with global technical standards, so we can offer television that emulates cinematic visuals.
Our homegrown creatives produced groundbreaking programs in various genres. We also pursued new partnerships and welcomed into our fold some of the country's most talented individuals who have taken our storytelling and talent management to the next level.
And just this May, our GMA News and Public Affairs personnel along with our 51 internal and external partners successfully delivered the most accurate, the most comprehensive, the most objective, and the fastest coverage of the recently concluded Eleksyon 2022 on television, radio, and online.
The company's net income surged 26 percent in 2021 driven by the strong showing of advertising and production revenues. Do you see this trend continuing for the foreseeable future? What other avenues are you exploring to diversify revenue streams?
FLG: GMA is optimistic that the Network's performance will continue to be strong because advertisers will always gravitate to platforms that provide the most efficient reach and, without question, GMA's unparalleled reach across its platforms is able to provide this.
However, it must be noted that 2021 was an exception given that the Company was temporarily affected during the onset of the COVID-19 pandemic in the first half of the year 2020 when revenues retreated to low levels.
Beyond mainstream broadcast revenue, we are seeing revenue gains in our digital assets and in being able to sell our content and export our programs to other global markets and strategic partners of content distribution. We are also seeing promising growth in service-based products sourced from new media and production, from external clients as well.
In terms of diversification, it is important to future-proof the corporation and identify additional viable sources of income on non-broadcast and media-related businesses. The Company incorporated GMA Ventures (GVI) last year to lead the diversification of the GMA Group. This allows flexibility and concentrated efforts into exploring and investing in emerging companies that have been deemed to have high growth potential.
Further, GMA is also looking into digital R&D-based opportunities through GMA New Media, Inc.
Your main rival ABS-CBN has been off free-to-air TV for nearly two years now. Did its closure have a significant effect on GMA's ratings and operations? How so?
FLG: GMA was already ahead of ABS-CBN in the ratings game even before the latter's shutdown in May 2020.
And during that period, operations did change. But it was more because of the COVID-19 pandemic than ABS-CBN's shutdown. Production of programs halted for a while, which affected the Network's programming. While we had to adjust to the quarantine levels in the country, we did not stop our efforts at improving our content and delivering the news as our commitment to the Filipino audience.
In addition, we continued to invest in strengthening our infrastructure beyond Channel 7, so that even our second free-to-air channel, GTV, and our other newly launched DTT channels can reach more people, especially in the provinces.
GMA recently announced an initial partnership with ABS-CBN to air some of its film titles on GMA. How did negotiations for this partnership start and are you eyeing more collaborations with ABS-CBN in the future? Is GMA planning more partnerships with other broadcast or media networks in the coming months?
FLG: Since we have already broken the ice with ABS-CBN, the door is now open for more possible partnerships. We are currently in discussions for another collaboration with them and we will announce this as soon as everything is finalized. Also, we continuously strengthen existing and explore new partnerships with different entertainment firms.
GMA's News and Public Affairs team is well-known and well-respected for delivering fast, accurate, and reliable news and information to the general public. What challenges are you addressing in maintaining the high standards of the news team in the face of rampant misinformation and "fake news?"
FLG: The biggest challenge for GMA News and Public Affairs is the speed by which false information spreads. As Jonathan Swift noted: "Falsehood flies, and the Truth comes limping after it."
To address this, we are constantly making sure that Filipinos here and around the world are able to access news and information they could trust-whether on their television, their computers, their mobile phones, whatever their device of choice may be. Our flagship newscast 24 Oras streams worldwide live every night, and Filipinos everywhere can catch Express versions of all our news programs on our website and YouTube channel. We have a Digital Video Laboratory that constantly works on new formats to keep our viewers informed and engaged. We embrace new platforms to reach younger audiences; in fact, the top four most-popular Philippine news accounts on Tiktok are all from GMA News and Public Affairs.
But while the medium may change, our team is committed to keeping the trust of our viewers the same way we have always done: with quality journalism that provides "Serbisyong Totoo" to the Filipino people.
How is GMA's working relationship with the new administration? You mentioned during the last shareholders meeting that you see no reason for any legal problems with members of the First Family. Do you see this continuing over the next six years of the new administration?
FLG: Our answer remains the same since we maintain being compliant with government-mandated requirements. As long as we continue to follow the law, we do not expect to have any problem with the new administration.
GMA also introduced GMA Ventures, your investments and diversification arm, last year. Could you tell us more about this? What sort of investments are you looking at?
FLG: GMA Ventures, as the GMA Group's diversification arm, seeks to identify new revenue streams that have sizeable target addressable markets, substantial growth horizons, and strong potential to be profit pools of the future. Aside from startups, GMA Ventures also looks at potential M&As (mergers and acquisitions) and investments in local and international funds with portfolio companies that can potentially operate in the Philippines.
GMA is also well-known for developing on-camera talents that entertain Filipino audiences. Are you personally involved or do you provide input when it comes to picking new stars to hone and develop as well as developing new TV entertainment formats? What are you looking for when it comes to new talents?
FLG: We have a very capable talent development and management department, which we now call Sparkle GMA Artist Center, that does the work of looking for talents to hone and develop. I trust them in choosing and honing our Network's future stars among thousands of aspiring artists and their recommendations are always elevated to my office for approval.
When it comes to TV entertainment formats and even News and Public Affairs, I continue to head our Program Committee meetings where GMA content producers, other officers, and I discuss GMA's (and even GTV's and our DTT channels') programming.
How do you see the future of broadcasting in the country? Streaming and on-demand video services are continuing to see massive growth in markets worldwide. How is GMA harnessing these game-changing technologies to remain relevant and competitive?
FLG: The future of broadcasting in the country remains bright. It may have become multi-platform, but it will remain predominantly free access and advertising-based.
We also take advantage of opportunities offered by evolving technologies and emerging platforms. Today, we produce content not only for analog and digital TV, radio, but also for digital streaming, program derivatives, and original content that are available online via our website, our apps, and various video and social media platforms.
In this day and age of fake news, given the democratization of content creation and distribution via social media, GMA's long-standing credibility will play an important role. As in any relationship, trust will be crucial.
What GMA programs do you personally enjoy watching? Outside of GMA, what TV shows do you watch during your leisure hours?
FLG: I always watch the news programs 24 Oras in GMA and Balitanghali in GTV whenever I can. I enjoyed watching First Yaya and now I enjoy watching Family Feud in GMA.
Sometimes, I watch CNN, Knockout, Asian Food Network, and Discovery Channel on cable.
You've done an excellent job of steering the company all these years, turning it around and making it not just a world-class broadcast entertainment network but a diversified and profitable media company. What else are your dreams for GMA? And although you still have many more years ahead of being captain of the Kapuso Network, I'm curious if you have already started thinking about succession plans if and when the time comes for you to take a step back from the company?
FLG: Our aspirations were long ago expressed in our Corporate Vision as follows:
We are the most respected, undisputed leader in the Philippine broadcast industry and the recognized media innovator and pacesetter in Asia.
We are the Filipinos' favorite network.
We are the advertisers' preferred partner.
We are the employer of choice in our industry.
We provide the best returns to our shareholders.
We are a key partner in promoting the best in the Filipino.
I would like to believe that we have already achieved almost all, if not all, of our Corporate Vision. I suppose we can dream to be one of the recognized media innovators and pacesetters in the world.
Yes, we have been thinking about our successor for some time now and we are prepared to recommend to the Board who our choice will be at the proper time.