SM Prime Holdings Inc. will form a video-on-demand streaming-service venture with a unit of Solar Entertainment Corp., signaling the Sy family’s first venture into the digital-media space.
SM Prime President Hans Sy signed a memorandum of agreement with Solar unit Omni Digital Media Ventures Inc., leading to the formation of a joint venture that will operate the video-on-demand business under the existing brand Blink.
SM Prime, through SM Lifestyle and Entertainment Inc., which runs SM cinemas and other entertainment facilities, will take 60 percent of the venture, with Omni Digital owning 40 percent. Omni Digital will operate Blink.
Officials said the two parties will invest about $20 million for the venture that seeks to expand the services currently being offered by Blink, such as offering movies right after their showing runs in theaters were finished.
“I don’t see an impact [on the SM theaters]. As a matter of fact, what we’re trying to do is to make the pie bigger. We’re reaching out to a lot more other [audience]. So we’re very positive about this and there’s opportunity,” Sy told reporters when asked if it will affect the company’s cinema business.
“Our goal is to reach out to more people as possible. Remember the early times, rent-a-betamax became the in-thing. It was so rampant then. So we just felt we do it on a digital space now,” he added.
SM officials said initially, Blink services will be bundled with other SM products such as its movie houses, skating rink and bowling, among others.
According to Ronan de Guzman, director and COO of Omni Digital, the company is targeting to make money in about two years, although it needs to educate people on how to use the system that is relatively new to the country.
“We can’t have revenues immediately. And the reason for that is because people need to be taught on how to use it. This is not like a text [short messaging service] that you already know. We’re also investing in a lot of education,” de Guzman said.
As early as March next year, he said SM may decide on what movies it will show exclusively on Blink, which has been operational for more than a year now, offering mostly Hollywood-produced moves and television shows, secured by the Solar Group.
“Solar has been in the content business since 1973. So we know how to look at content, especially how to get it to Filipino consumers,” he said.
Video-on-demand streaming service, which can be accessed online and through desktop or laptop computers, tablets and even smart TVs, is more popular in the West and other developed nations due to their high Internet speeds. The said service is harder to implement in countries such as the Philippines where Internet speeds are low.
Solar, however, said it has partnered with carriers Smart and Sun Cellular, and it also has know-how to detect a bandwidth speed in order to properly show a movie or a television show even on low bandwidth.
SM Cinemas generated P913 million in ticket sales during the third quarter of the year, up 16 percent from P789 million last year. This brought the nine-month ticket sales to P3.3 billion, an increase of 21 percent.