BUENOS AIRES — Claudio Villarruel spends more time these days working on spreadsheets and meeting the finance manager than he does in the studios.
Argentina’s economic crisis has made his job of programming manager at top-rated TV broadcaster Telefe, a unit of Spain’s Admira, a lot about accounting.
Villarruel, like his counterparts at rival broadcasters, has halved his programming budget after a 60% drop in ad spending, the worst on record. The overall ad market is expected to tumble 30% this year, after falling 14% in 2001.
The result for viewers is more low-budget shows, reruns and fewer dramas.
In store for this year on Telefe, for example, is “Gran Hermano 3” (Big Brother 3), and the music-contest “Operacion Triunfo,” a format from Endemol (also owned by Admira) that was an enormous hit in Spain.
Reality shows are cheaper to produce than dramas, and many have been popular in Argentina.
Any drama or soap opera that does make the broadcasters’ lineup will be aimed at snaring overseas sales, the only way to make a profit these days.
Broadcasters also are incorporating hooks, universal themes and foreign actors into their telenovelas to entice international buyers.
One example is “Franco Buenaventura, el profe” (Franco Buenaventura, the Professor). The star teaches tango in Buenos Aires, where the dance was born. Orders have already been placed, thanks to the tango’s global appeal, Villarruel says.
The soap’s setting in neighborhoods founded by Italian and Spanish immigrants also has raised buyers’ interest from those countries.
Ironically, the economic problems have made it easier to sell abroad. The peso, which was fixed to the U.S. dollar for nearly 11 years, has slid 70% against the dollar since devaluation in January. This has made Argentine shows more competitive in export markets — and more lucrative, as costs at home are in pesos.
“Before, when the exchange rate was one to one, the revenue (from exports) was something extra,” says Villarruel. “Now it is a ton.”
Broadcasters are seeking other ways to make ends meet. They are talking to foreign producers to rent their studios because it is now cheap to produce in Argentina, thanks to the slumping peso.
At the same time, Argentina boasts some of the top talent in Latin America.
Broadcasters also are considering co-productions with advertisers. Telefe may do a telenovela with Tsu Cosmeticos built around Tsu’s door-to-door salespeople.
Another strategy is product placement, which has gained in popularity as it is cheaper than commercials, and reduces viewers’ switching channels to avoid ads.
Cuts ‘not deep’
Given the dire ad recession, “the reductions in program spending should have been deeper,” says Gustavo Quiroga, head of media buyer EPM.
But that has not happened for three reasons, he reckons.
The first is that to win foreign sales, a show must succeed at home. The second is that broadcasters carry enormous political weight, so ratings are important.
The third is World Cup soccer, which kicks off May 31. Fourth-ranked America TV and state-run Canal 7 bought the rights to popular matches and half-hour highlights of all 64 games of Argentine’s favorite sporting event.
Hence, Telefe and No. 2 Artear-Canal 13, a unit of local media giant Clarin, will face tough competition in June.
For that reason, Canal 13 and Telefe will keep up program spending despite the ad slump. “They would not want to lose their positions in the rankings, not even for a month,” says Quiroga.