PRODUCTION costs, which eat up the lion’s share of ABS-CBN Corp.’s operating expenses, could plunge by as much as 40 percent when the network’s soundstage in Bulacan starts its operations in the last quarter of this year.
Company Chairman Eugenio L. Lopez III noted, however, that this forecast is based on figures booked by companies in the United States. The actual savings, however, will actually be seen by the time the company starts to operate the facility.
A soundstage is an infrastructure that effectively improves a network’s operations by increasing production quality and reducing costs associated with on-location shoots.
Production costs went down by 4.3 percent to P11 billion in 2014, from P11.5 billion the year prior. This amount could go down significantly once the facility starts to be commercially operational sometime in the second half this year.
“Today, 80 percent of our production is remote and 20 percent is studio. We will turn those figures around, meaning 80 percent will be studio and 20 percent remote,” Lopez said in a chance interview on Friday.
He said the quality of productivity increases immeasurably when a television company shoots inside a studio, which requires an entirely different set of operating elements like a backlot—an area behind or adjoining a movie studio that contains permanent exterior buildings for outdoor scenes.
“When we shoot in the new soundstages, the quality of our production would be very different from what it is today. So, it’s not just improving our cost but improving our production, and the quality of our production,” Lopez added. “We’re working with the key consultants from abroad to improve the quality of our production in our TV shows.”
The television giant will spend P8.5 billion in capital outlays this year. The amount is 52 percent higher than the P5.6 billion spent in 2014.
The capital will be broken down into three components: P1.2 billion for program rights, P3.15 billion for the pay TV business, and P4.1 billion for the digital terrestrial television initiative and company maintenance.
ABS-CBN booked P2 billion in net income in 2014, flat versus the prior year’s net profit, which was boosted by election-related spending. The company’s revenues remained strong at P33.5 billion, while expenditures were also flat at P30.7 billion.
Shares of ABS-CBN rose by 0.66 percent to end Friday’s trading at P60.90 apiece.