‘ABS-CBN closure affects small firms’
Closing down the broadcast operations of ABS-CBN Corp. does not merely affect the company and its employees per se, but it also has adverse effects on small businesses, suppliers, and even large corporations.
Edson C. guido, the data analyst of ABS-CBN, said the denial of a Congressional franchise to ABS-CBN results in negative effects on the economy, employment, surrounding small businesses, advertising-reliant businesses, and competition.
in separate Twitter threads, guido explained that everyone is affected by the closure of the broadcast operations of the network.
He said the closure has two effects: direct and indirect. Direct in a sense that ABS-CBN contributes 11,071 to employment and indirect in a sense that it has a so-called multiplier effect.
“For instance, Juan, who is an employee of ABS-CBN, eats at a restaurant which employs Maria, who then sends money to the province to help Jose. Multiply that to the number of employees at establishments surrounding ABS-CBN and their spending. That’s the multiplier effect,” guido said.
He added that the closure also has a huge effect on companies and industries that rely heavily on advertising. noting that ABS-CBN has a huge reach, guido asked: “How will they reach their consumers?”
“if these companies experience a dampening of their revenues— especially now because of the Covid-19 pandemic—there is a possibility that they will also lay off workers. We should not forget that the economy is interconnected,” guido said.
He also scored critics that say that people still have a choice on which channels they would like to watch.
“in economics, there is a principle that states ‘competition promotes efficiency.’ if there is competition, there are a lot of choices. At the same time, competitors will strive to be the number 1. This results in better service and lower costs. Who wins? The Filipino people,” he said.
Aside from this, in denying ABSCBN
of a franchise, Congress effectively removed a first mover in the industry. ABS-CBN is known to be the first network in the Philippines to do live production, color television, opening of studies, international operations, and most recently, the shift to digital.
“in an industry, there has to be a first mover—one who experiments and takes risks. if you remove the leader who takes forward steps, the whole industry might deteriorate and everyone will be worse off. Who loses? The Filipino people,” guido said.
ABS-CBN has yet to officially answer the questions sent by the Businessmirror, with an official saying that the network will make official disclosures to the stock exchange soon.