SAO PAULO — Latin America’s sleeping giant, Brazil, seems to be rubbing the sand out of its eyes and is starting to flex its cable TV muscles. The country has only about 215,000 pay TV subscribers at present, of which 70,000 are cable (compared to 3 million in Argentina), but some insiders believe the number of subs could mushroom to 500,000 by the end of the year and hit 3 million by 1998.Should Brazil ever gets it economic and political acts together — a big if at this point — it could outstrip its southern neighbor as a cable market with a population five times that of Argentina. Two megagroups are vying to control cable in Brazil. First is an offshoot of TV Globo, the broadcaster that controls about 65% of the TV market in Brazil. The other is the powerful Abril publishing empire, already involved in various media areas, including homevideo. Both outfits started with scrambled over-the-air delivery systems, UHF for TVA and C-band satellite delivery for Globo. Now, however, the major cities are fast being wired by Net Brasil (the Globo affil), TVA and a third contestant, Multicanal. Globo launched its operation about two years ago by setting up Globosat in Rio. Last July, Globo’s operation was divided into two separate offshoots. Globosat remained as the Rio-based programmer and Net Brasil was set up in Sao Paulo to handle the actual cabling. “We already have 49 cable franchises, of which 23 are now operational, with the remainder due to be launched soon,” says Net Brasil topper Alberto Pecegueiro. “… In all, the government awarded 102 franchises around the country.” Luiz Gleiser, Globosat’s program director in Rio, says four of Globo’s own channels — Telecine, Top Sport, Globosat News and Multishow — are using product from ESPN, Tele-Uno, NBC News and Turner. These form part of larger package to subscribers. Pecegueiro claimed Globo already has 75,000 subscribers, about 12,000 each in Rio and Sao Paulo and 50,000 scattered throughout the rest of Brazil. The charge to homeowners for a package of 24 channels is $ 32. In Rio, there are 18 basic channels and six premium ones, among them the Movie Channel, Cartoon, Tele-Uno and Canada’s TV-5. Peregueiro says supplier prices will drop as much as 50% starting 1996 when present contracts expire. The competing heavyweight, TVA’s programming topper, Roberto Rios, claimed the Abril operation already has 160,000 subscribers, 100,000 in Sao Paulo, with the rest in Rio, Curitiba and Brasilia. Operation started on Sept. 15. 1991. Abril is presently huddling with Dutch conglomerate Richmond, which has cable in Holland, South Africa and elsewhere. Rumors are that the Richmond group would invest $ 80 million in the business as a minority partner. TVA programs six of its own channels, using programming from ESPN, Turner, etc. with a maximum price of $ 40 to subscribers. “We’re increasing our subscriber base by around 3,000 to 4,000 per month,” says Rios. “Especially useful are the campaigns in Brazil’s largest weekly magazine, Veja, owned by us.” Rios adds that Abril is in conversations with Disney to hammer out new partnerships. Abril has been the Brazilian publisher of Disney comics for 40 years, and its Abril Video banner releases Fox and Disney product. Abril also publishes the local version of Playboy. “By the end of this year, we expect to have 200,000 subscribers in Brazil,” said Rios. The third cable company is Multicanal, associated to a mining group, CMA, owned by entrepreneur Antonio Dias Leite, who has recently established a partnership with Globo for wiring operations. Systems being installed have a capacity to deliver 70 channels, 24 of which are already filled with local programming plus an international mix including CNN, Deutsche Welle, TVE from Spain and ESPN. Globo and Bandeirantes TV set up a partnership to launch Sport TV last January. Cost of purchase of cable franchises from their owners reportedly range from $ 500,000 to $ 5 million. Net Brasil now controls nearly half of the 102 licenses. Multicanal and TVA have almost 20 each. Multicanal has wired three large areas in Sao Paulo, while Net-SP (a subsid of Net Brasil) and TVA are wiring seven other neighorhoods. Net-RJ, the only cable operation in Rio, is already into affluent areas such as Leblon and Tijuca.
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