Brazil pay TV uncertainty

Execs struggle with difficult economy, flat sub growth

SAO PAULO — Although pay TV is marking its 10-year anniversary in Brazil, the mood at the annual Brazilian Pay TV and Telecom Assn. (ABTA) confab last week was anything but celebratory.

Execs are struggling with a difficult economy, flat subscriber growth, a falling local currency and the threat of new taxes and fees that some fear will cripple the industry.

The Brazilian Assn. of Pay TV Programmers is preparing to seek a legal injunction against the presidential decree signed last month that creates new taxes and fees to finance local film production, distribution and exhibition.

The decree affects most media, but foreign programmers fear the taxes could decimate their operations.

Carriage fee hike

TAP Brasil prexy Abel Puig estimated new fees and taxes would necessitate an increase in carriage fees of 34%-41%, depending on the type of channel.

“U.S. channels will have to leave the Brazilian market. We will continue selling programming to the local broadcasters, but could no longer distribute pay TV channels,” Puig said. He is the regional director of Canal Fox, Fox Kids and National Geographic Channel in Brazil.

The programmers org — mostly reps of U.S.-backed networks — is trying to build a broader-based coalition that will include the Motion Picture Assn., the ABTA, the local advertisers’ association and leading local programmer Globosat to lobby Congress for changes.

The decree is “obviously a step in the wrong direction. It will hold back the market expansion,” said Elisabet Blanco, VP of sales for Claxson Interactive Group, which distributes seven pay TV channels in Brazil, including the popular Playboy TV.

But the foreign programmers are not the only ones in trouble.

New model needed

The consensus among ABTA 2001 participants is that the pay TV industry needs a new business model.

The industry is overbuilt, they say, and dominated by media giant Organizacoes Globo: Its cabler subsid Globo Cabo is the largest MSO, with 70% of subs, and its programming subsid Globosat will not sell channels to MSOs not controlled by or affiliated with the group.

Yet both Globo Cabo and satcaster Sky Brasil (in which Globo is the majority shareholder) are bleeding red ink.

In a sign that Globo may be retrenching, Roberto Irineu Marinho of Organizacoes Globo told a local trade pub that the group is ready to cede control of Globo Cabo, the only publicly traded cabler in all of Latin America.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety

Loading