The decay of TV Globo’s media empire has been prophesied many times.
The flagship business of Brazil’s No. 1 media group, Organizacoes Globo, was expected to sink in the mid-1980s along with the military regime the net had supported. Naysayers said it would not survive a financial crisis, which it managed to overcome by July 2005 when the company finished renegotiation of its $1.3 billion debt. It was also believed the net would not be able to keep its outstanding ratings, what with competition from the Internet, DVDs, pay TV and other entertainment options.
But the truth is that TV Globo, which was founded in 1965, is stronger than ever, and has managed to keep its ratings supremacy, which it first captured in the early 1970s. And above an average audience share of more than 50% and ratings above 30% on primetime, the net airs all of the 30 most-watched shows in the country, which allows it to receive about two-thirds of the entire ad spent on open TV in Brazil.
The successful programming structure of TV Globo has not changed since the 1970s: in primetime Monday through Saturday it airs four telenovelas and the newscast “Jornal Nacional.” The four telenovelas, along with other productions are made in the net’s Projac, the largest production center in South America. Inaugurated in 1995, “Brazil’s Burbank” produced 2,450 hours of programming last year. More than 2,500 people work in Projac, including 641 actors, 227 writers, 106 directors and 156 crew members.
“People ask us: ‘When will you change your programming?’ But there is no reason to change it. Our programming is diversified and fulfills the demands of our viewers,” TV Globo general director Octavio Florisbal tells Variety in his office at the net’s Southern Rio headquarters.
But the “quality” of telenovelas, stresses Florisbal, has sharply increased since the 1970s: “We now have 100 to 120 actors in a telenovela, against 30 in the past. We need about 40 scenarios, including several scenario towns, three times more than before. Plot situations, which lasted months in the past, are now resolved in a week. We have five directors shooting simultaneously, against just one, maybe two, in the old days,” he says.
He adds that the cost of each telenovela chapter ranges from $100,000 to $175,000, above international standards.
The net also makes more sophisticated series and miniseries, with a cost per chapter reaching $250,000.
TV Globo is an established exporter of telenovelas and series, and are considered to be of a higher quality than the productions of nets in other Latin American countries. “The Clone,” one of TV Globo’s big hits, was sold to 74 countries and dubbed to 17 languages.
The prophets of TV Globo’s demise have now turned their focus to TV Record, which is rapidly advancing in ratings, while Globo remains stable. But the ratings gap between the two nets is still wide: 24 points on primetime during the first half of this year. Additionally, Florisbal says, TV Record is so far drawing mostly viewers from third net SBT.
But with TV Record heavily investing in telenovela production, the gap may grow smaller in the near future. TV Record recently ponied up $60 million for the exclusive Brazilian rights of the 2012 Summer Olympics in London. And in 2007, for the first time (as long as perhaps the history of open TV in Brazil,) TV Globo will not air a top sports event here.
“We paid $15 million for the 2008 Olympics in Beijing,” says Florisbal. “The rights for Brazil for the Summer Olympics should not cost more than $20 million. Record will lose a lot of money. I can only understand it as a marketing investment. Record is growing, but so far we have not been affected. Of course, we will keep our eyes open.”
But the real rival of TV Globo might not be among the existing broadcasters. Some analysts believe the deep-pocketed telco groups in operation in Brazil represent the true threat to the net.
Spanish telco giant Telefonica, a major fixed-line and wireless telephony player in Brazil, has already entered the pay-TV sector. The company has bought the control of a cable operation and launched a satellite net. Organizacoes Globo, through its co-owned operators Net Servicos and Sky Brasil, called for regulations and government action to prevent a foreign group from controlling content distribution in Brazil.
In August, however, Organizacoes Globo’s pay-TV programmer, Globosat, announced an agreement to supply Telefonica’s operations with its top four channels, in addition to pay-per-view programming, including the valuable matches of top local soccer leagues. As part of the deal, Telefonica will also include TV Globo in its lineup. For some analysts, the deal sounded like a truce.