MIAMI — The main markets of Latin America are already dominated by local media conglomerates that are trying to leverage their various holdings in broadcast, pay TV and online media. But in most countries, greater degrees of consolidation and convergence are still in the very early stages.
For dominant players Globo in Brazil and Televisa in Mexico, the two top territories, broadcast TV remains the key revenue source.
Argentina is the region’s most heavily cabled market, but its severe recession has resulted in canceled subs.
The pay TV industry overall has seen stagnant or declining subscription revenue and if the region’s economies continue to soften, consumers are unlikely to cough up for additional services like Internet or telephony, in which some multiple system operators have been investing.
The biggest consolidation so far is News Corp.’s pending takeover of Hughes and its DirecTV operation. Latin America is the only region where News Corp.’s Sky and DirecTV compete, and this has proved to be a stumbling block in negotiations.
News Corp. partners Televisa and Globo are the majority owners of the local Sky platforms in Mexico and Brazil, respectively, and News Corp. topper Rupert Murdoch is said to have assured them of continued control after a merger. But regulators in those two countries may object to even greater control over the pay TV sector by the two congloms, which own the largest cablers as well.
At the broadcast level, declining ad spend is cutting into buyers’ budgets. “It is impossible to try to raise prices right now,” says one Latin distributor.
At the same time, in a number of Latin territories, broadcasters have upped their investment in local production, which has reduced their need for purchased programming and cut into budgets as well.
“It’s much harder to sell (film) packages, especially of made-fors and other smaller titles,” says one U.S. distribution exec. “I’ve had people tell me if they buy a package, they won’t be able to run some films for four years.”
But constrained skeds have, at the same time, spurred competition for blockbuster and event pics that can pull in auds.
| TV homes:105 million (est.)
Cable homes:14 million (est.)
Satellite homes:3 million (est.)
Local programming:80% in Brazil; 66% in Argentina
Top show:Brazil: Globo’s telenovela “Porto dos Milagres” (46% share); Argentina: Telefe’s talker “Susana Gimenez” (28% share); Mexico: Televisa’s telenovela “Amigas y Rivales” (25% share)