On the face of it, the Latin American TV market is a dream. Almost
every household has at least one TV set, which is switched on for an
average of eight hours a day and watched actively for at least three.
Local productions or productions imported from other Latin American
countries grab the highest ratings, both at local and multi-channel
networks. US productions are watched only if dubbed in Spanish. So it
would seem that all TV executives have to do in Latin America is to
crank out those telenovelas, game-shows and dubbed movies, and they'll
be dancing salsa all the way to the banco.
Even though Latin American countries do live up to the stereotype when
it comes to telenovelas (Eurodata estimates that there are 32
telenovelas in Latin American countries as opposed to an average of
seven elsewhere), times are tough for TV companies.
The economic slowdown, deregulation and falling advertising rates have
forced local operators to become much more competitive. In some
countries, such as Puerto Rico, broadcast television has always been
primarily commercial in nature and highly competitive. In other cases,
such as Mexico's TV Azteca, previously government-owned channels have
been auctioned off to raise funds and encourage competition. In yet more
cases, new licences were issued. Rock y Pop in Chile and the RCN and
Caracol networks in Colombia are a few examples.
And almost everywhere, media ownership regulations have been relaxed,
allowing foreign investors into the markets. So just as ad money is
beginning to dry up, local networks are facing stiff competition from
In Brazil, the giant Rede Globo still enjoys a virtual monopoly, mainly
due to limited market availability of Portuguese-language
It is now producing approximately 1,100 hours of series and TV movies,
which represents 80 per cent of its total programming.
Consequently, multi-channel television has been slow to make inroads,
accounting for only 28 per cent of TV viewing.
Yet Globo executives are having sleepless nights right now. The drop in
ad revenue has hit the giant hard. From January to April 2001, media
investment stood still in Brazil compared with the same period last
Quite a shock after the 24.6 per cent growth in media investment the
country enjoyed in 2000. Such gloomy results forced Globo to cut its
production prices and to adapt them to its clients.
Carlos Alberto Simonetti, the international sales executive at Globo,
says: "The prices of our products vary according to the country as they
depend on advertising capacity. In a market like Italy, one telenovela
episode can be negotiated at $40 million, whereas in Spain it
could be between $7,000 and $10,000; or in Cuba, we could
sell the same episode for $300."
In Mexico, Televisa, the largest public media company in the
Spanish-speaking world, is also focusing on international development.
But unlike Globo, Televisa centres its attention solely on the US, as
its executives are convinced that growth there will surpass that of
Latin America, Europe and Asia altogether.
This looked fine, until the US was hit by economic slowdown. Televisa's
sales declined 6 per cent in the first half of 2001, and so did its
competitor's, TV Azteca. It wasn't long before both companies started
suffering production cuts, more re-runs and cancelled programmes.
Televisa reacted by refocusing its efforts on Latin America, and on
entertainment. Its approach was comprised of two elements: Televisa
International launched an aggressive continent-wide strategy, based on
new alliances and a total restructuring of its entertainment business,
to remain top dog among telenovela producers.
At the same time, it gained a foothold in the suddenly lucrative reality
TV niche by entering into a joint venture with Dutch Endemol of Big
Brother fame. Televisa then committed itself to buying the rights of
The Big Brother (Gran Hermano) phenomenon has also hit Argentina, where
the four big local TV players - Telefe, Canal 13, America and Azul TV -
all opted for the reality TV format. Indeed, Azul TV turned itself into
a reality show factory by launching three different shows almost
simultaneously: Reality, Reality (starring TV and movie stars),
Confianza Ciega (an Endemol production where couples' relationships are
put to the test) and Popstars, or "how to turn Miss Nobody into a
superstar in no time" as it is commonly dubbed. Some of these shows are
also aired in their uncut and unabridged versions on especially created
24-hour payable channels.
In the latest ratings figures for the first two weeks of October,
America TV was viewed by 5.1 per cent of the population, which boosts
Azul TV to the third position with 6.2 per cent. Telefe keeps its
position with 14.1 per cent of households, followed by Canal 13 with 8.7
Competition among TV networks in Argentina is fierce, and local networks
have learnt how to cope with well-established multi-channel networks
(more than 60 per cent penetration level). But the whole industry has
been badly hit by a 40-month recession. The networks' ad revenues
dropped 15.8 per cent in 2000 and are set to drop further in 2001.
In October, America TV became Argentina's first network to file for
bankruptcy protection in a last-ditch bid to conquer its financial
problems. The channel cited "a drastic and persistent drop in
advertising revenue and the impossibility of reaching out for a
reasonable credit system to overcome it".
Just like elsewhere in the world, Latin America's TV channels are not
without their problems at the moment. But one of the biggest
misconceptions, that the small screen simply showed US re-runs dubbed
into Spanish or Portuguese, is being seriously challenged, as the
market-leaders look seriously at conquering territory beyond their home
TV VIEWING IN LATIN AMERICA (mins)
Per individual per day
Brazil Sao Paolo 229
Brazil Rio De Janeiro 207
Puerto Rico 206