Economics of Noontime Shows

Recently, our noontime viewing habit was shaken up. TVJ, et. al. left Eat Bulaga, the one that is  produced by TAPE, Inc. and aired on GMA Channel 7. They eventually came back as E.A.T. now aired on TV5 and is now co-produced by TVJ and Mediaquest, the holding company that owns TV5, and replaced It’s Showtime whose blocktime agreement ended the day before the launch of E.A.T.

It’s Showtime were given a choice by TV5 to become pre-programming of their primetime new program, but It’s Showtime declined to take the 4:30 pm time slot. Eventually, it was announced that ABS-CBN and GMA entered into a revenue-sharing agreement, and that It’s Showtime will be aired on GTV, GMA’s sister station, also taking the noontime slot.

Eat Bulaga, the longest running noontime show, the one produced by TAPE, Inc. still airs on GMA 7. The show, which celebrates their 45th year by the end of July has an entirely new set of hosts, who have never worked together as hosts of a noontime variety show and stepped in several days after the original hosts left due to irreconcilable differences with the producers of the show.

Let us analyze this noontime brouhaha using the perspective of Economics. We will look closely at both the supply side and the demand side of the market of noontime shows.

On the supply side, let us first look at the producers of the shows. TAPE, Inc. has been the producer of Eat Bulaga since 1981. For a TV show that has been in existence for more than 44 years, the producers must be raking in revenues from advertisements, etc. Accordingly, the production outfit had financial challenges after a change of management from Tony Tuviera to the Jalosjos family. Expectedly, when there is a change in management, there is a change in the management style as well. There will, of course, be resistance to this change because it was not what they were used to, and TVJ, being practically family with Mr. Tuviera were the most affected. They were after all old dogs being taught new tricks, but they were not able to adapt. They would either shape up or ship out, and ship out they did.

And this is when the slump for Eat Bulaga started. The producers could not pay the TVJ so their appearance in the noontime show became sparse. Job cuts, particularly on some of their hosts, were looming because the new management did not like the artist or the pay was quite high. 

TAPE Inc is a business enterprise, and a business firm’s primary goal is profit. In the most simplistic sense, there are at least two strategies to achieve this. First is to increase revenues and revenue streams. The main source of revenues of TV production outfits are from advertising, syndication and licensing. In the case of TAPE and Eat Bulaga, it was pretty much constant because advertising contracts were already signed early on in the year, so increasing revenues may not be the most feasible strategy. 

Second is to decrease costs. For any business firm, the highest spending is usually on salaries and wages, so this is where TAPE wanted to do cost cutting measures on. The block time agreement which will not expire until the end of 2024 is also a big expense on the part of TAPE. 

Supposedly, some advertisers have since pulled out their placements in the noontime show because of lower viewer ratings (compared to its competitors). The new hosts obviously have a lower pay scale than the former, which may have decreased their costs. Nevertheless, these pay cuts will not compensate for the fast decreasing revenues, thus resulting in huge losses, according to industry insiders. The ongoing battle of copyrights is not helping Eat Bulaga, too. I hope to see a turnaround of events because as they say, sayang naman ang 45 years.

TVJ now has a new show on TV5, E.A.T. which directly competes with Eat Bulaga. Unlike Eat Bulaga, E.A.T. does not have a block time agreement with the network but is a co-production of TVJ Productions and Mediaquest. This means that both production companies are sharing their resources with each other in order to produce the show. As MVP said, TVJ are not simply employees anymore, but are co-owners already. I can imagine that all costs of production will be handled by Mediaquest, while content will be in the hands of TVJ. This would probably be the mutually beneficial strategy, as one will rake in the profits, while the other one has the artistic freedom. TV5 has been looking for the perfect show to turn their financials around and I think E.A.T. is the one. TVJ now has a new home, just proving their channel hopping days were not yet over. 

Anyway, at this point, everybody, at least on the part of TVJ and TV5, is happy, except that TVJ is still running after the rights to use Eat Bulaga, mainly because they wanted the title, “longest running noontime show” and hope to celebrate 50 years a few years down the road. And so the battle continues on. This would probably dampen some excitement from viewers, and I would presume this may be one of the reasons why ratings are falling from the initial spark on their premier episode.

I have watched several episodes of E.A.T. and aside from the exciting first episode, the succeeding ones were quite bland for me. There is nothing much they offer except for a rehash of “Bawal Judgmental” which is now “Babala: Wag Kayong Ganun”, and “All for One, One for All” which is now “Sugod Bahay mga Kapatid”. Different names, same banana. These are really good segments. Don’t get me wrong. I love watching these segments, but I can postpone watching it to a later time. So do other viewers. And maybe that is another reason why their ratings are falling. Let’s discuss more about this viewer behavior in the next edition.

Lastly, since It’s Showtime’s block time agreement with TV5 expired on June 30, they found a new channel that will broadcast their show, which is GMA’s free-to-air channel, Good Television or GTV. Unlike the block time agreement with TV5 before where ABS-CBN is just a content provider for TV5, this time, there is a revenue-sharing agreement between the ABS-CBN and GMA, which would essentially mean that there is a production partnership. 

This could be mutually beneficial for both networks. However, the problem with this agreement is the earlier agreement of GMA with their block timer in their main channel, Eat Bulaga. It’s Showtime and Eat Bulaga are practically on the same yard and competing with each other. Although E.A.T. is still leading, ratings show that It’s Showtime is leading against Eat Bulaga. This may push the ailing Eat Bulaga further down as all support from GMA’s big bosses are on It’s Showtime.

GTV is directly competing with TV5 in the number 2 slot in the network war. It’s Showtime is also shown on A2Z and other online platforms, but this did not take their ratings higher. Beyond ratings, though, the partnership of the two networks was a wise decision as they could put their resources together to result in higher profits for both of them. Eat Bulaga may be collateral damage in this deal. 

Some say that GMA will just wait for the block time agreement to end or for TAPE to go under (due to losses and/or their copyright conflict with TVJ) and cancel their agreement so that It’s Showtime will be transferred to GMA7. That will be a monumental day and a total plot twist. This just proves that television is a free market where the forces of supply and demand are basically at play.

In the second part of this two-part series, we will analyze the demand-side of the economics of noontime shows. We discuss the consumers, the viewers’ perspective on the matter.