LATIN AMERICA: THE HUNT FOR ELDORADO - Caroline Carlson goes behind the scenes at some of Latin America's biggest TV stations to explode common myths

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

new players.

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

that show.

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

per cent.

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



Per individual per day

Mexico 263

Brazil Sao Paolo 229

Argentina 212

Brazil Rio De Janeiro 207

Puerto Rico 206

Peru 199

Panama 192

Venezuela 185

Uruguay 176

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