André Mermelstein is the editorial director of Converge, publisher of Tela Viva, Brazil’s leading magazine on broadcasting and production. He’s also head of the Brazil TV Fórum. Photo by Marcelo Kahn Most of the attention is now drawn to the booming pay-TV market, which has grown an astonishing 30 percent a year over the last three years, reaching 17 million subs in June 2013. 38 A lot has been said about the promising condition of Brazilian TV. How much of it is true? What are the real opportunities within this giant market, with over 190 million people, 17 million pay-TV subscribers and one of the most vibrant FTA television systems in the world? Brazilian FTA television reaches 99 percent of the population, led by TV Globo, which is simultaneously a driving force in the market, as well as a barrier for newcomers. As in most countries in Latin America, Brazilian broadcasters produce most of the content they air, especially drama and comedy, leaving little room for imports, limited to no more than a few hours a week of feature films, doc excerpts and some animation. Most of the attention is now drawn to the booming pay-TV market, which has grown an astonishing 30 percent a year over the last three years, reaching 17 million subs in June 2013. It’s not much, considering Brazil has more than 55 million TV households, but it’s the largest market in Latin America and it counts more viewers than France, Canada, Italy or Spain, for that matter. This growth has been followed by the new PayTV Act, known as Law 12.485/11, which has two different effects: On one hand, it deregulates the distribution market, allowing telcos to compete in the cable marketplace. It also makes it much easier for new companies, such as ISPs, to start cable operations. As an immediate effect, Telmex’s Embratel took over Globo’s share in Net, the country’s largest cable company. Now Net is expanding its network from 200 to 300 cities. Telco giants like Claro and Oi are investing in this business (Oi has just hired the entire capacity of the SES-6 satellite, launched in June) and Dish is expected to join them soon, all competing against the current leader in DBS TV, Sky (DirecTV). On the other hand, the pay-TV act introduced quotas for local content. It establishes that one third of all channels on a given package must be Brazilian (news and sports channels are not counted). That makes it difficult for anyone trying to enter this market with new channels. The law also forces all channels to broadcast a minimum of 3.5 hours a week of independentlyproduced Brazilian content in primetime. This is also not such great news for those trying to sell international content to local networks. At the same time, the law creates a fund with money provided by the telcos from a tax for every new mobile phone sold. This fund, the FSA (Fundo Setorial do Audiovisual), now accounts for almost U.S.$500 million total, to be used in local independentproduction.Thisisagoodopportunity for international producers, becausemoney can be used to fund co-productions as well. So, from an international perspective, the new law will help Brazil continue to grow its market, which is goodnews for thosewilling todobusiness in the country. But it comes with a price, which is the space it saves on programming schedules to local content. There are many opportunities, generated by the upcoming sports events (the FIFA World Cup in 2014 and the 2016 Olympics) and by the public funding available for original production. Brazil is definitely the place to be in the next few years. By André Mermelstein Brazil: A New TV Landscape October 2013 Latin America Brazilian TV Facts & Figures Population: 197 million Total HH: 61 million TV HH: 96.9% TV Broadcast Stations: 138 FTA National Networks: 14 FTA Public Networks: 2 TV Revenues (annual): U.S.$14.1 billion Pay-TV Subscribers: 17 million Broadband Subscribers: 17 million Withholding Tax: 15% Remittance Tax: 10%
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