ABS-CBN Cuts Costs to Meet Profit Target

ABS-CBN Corporation, the Philippines' largest multimedia firm, said Thursday it is investing in a state-of-the-art sound stage in an effort to cut production costs.

The company has purchased a 15-hectare property in Novaliches, Quezon City, located north of Metro Manila, to house the sound stage, according to ABS-CBN chairman and chief executive officer Eugenio Lopez III.

"This will radically change our production costs. Today, 80% of our production is remote and 20% is studio, when the sound stages are done... it will be 80% studio and 20% remote."

ABS-CBN produces most of its soap operas and other television shows, which it also exports to other countries.

The company spends about P100 million annually on location rentals alone. Sudden changes in weather and bad traffic in the capital also add to costs.

"We believe there is a potential for sales to foreign content providers that want to shoot in a sound stage so we want to build state-of-the-art sound stage so that we can attract other foreign content providers to do their productions here," Lopez added.

This year, ABS-CBN eyes to match its record profit of P3.2 billion in 2010 even in the absence of election-related advertisements.

"Our ratings have improved significantly, so we expect that to drive revenues moving forward," said Lopez.

"We're confident to hit full-year P3.2 billion income. If you look at the regular ad minutes, they've slightly slowed this month but given the state of the economy, we see these picking up in coming days. We continue to manage our costs aggressively," added ABS-CBN chief finance officer Ron Valdueza.