TV Record buys its way to the top

Upstart broadcaster invests millions in telenovelas

On May 1, 2005, TV Record’s telenovelas division general director Hiran Silveira arrived at the net’s recently acquired thRee-studio production center in Rio, and was greeted by the facility’s only employee.

“He turned the lights on, and I entered the empty administrative building,” Silveira recalls. “Five months later, we had 400 people working in our first telenovela here, and now our team amounts to more than 1,600.”

The production center, named Recnov (short for Record Novelas), is at the core of the most important development in Brazil’s television industry in a long time. Thanks mainly to the two primetime telenovelas made there, TV Record managed this year to seize the No. 2 spot in primetime from rival SBT.

According to the research firm Ibope, TV Record had, in the first half of 2007 on primetime, an average audience of 8.4 points and an average share of 14.4%, against SBT’s 7.2 point audience and 12.3% share. TV Globo kept its comfortable leadership with an average 32.7 point audience and 55.8% share. On the 7 a.m. to midnight ranking, SBT still holds the No. 2 slot, but TV Record is rapidly closing the gap.

TV Record has invested heavily to improve all aspects of its programming. For films and series, the net has inked volume deal agreements with Universal and MGM. In terms of unscripted shows, it will launch in 2008 the fifth edition of local version of “The Apprentice.” And it outbid TV Globo for the exclusive Brazilian rights to the 2012 Summer Olympics in London for an eye-popping $60 million.

TV Record’s big investments revived charges that something was unethical about its money.

TV Records is owned by Bishop Edir Macedo, the head of the evangelical Universal Church of God’s Kingdom. Macedo’s church, which is known for its ceremonies to exorcise demons, has several million Brazilian followers and is now present in more than 100 countries.

The nonprofit religious institution is supported by donations from followers, and the charges are that part of this money funded the investment of TV Record, a commercial operation, which would be illegal.

The net’s execs deny the charges and add that the only coin they receive from the Universal Church goes to the purchase of air space for the institution’s daily religious programming on TV Record after 1 a.m.

But the main investment is in telenovelas, as the net toppers realized they had to copy the highly successful telenovela-based programming of TV Globo to advance in ratings and pocket more ad spending.

According to Silveira, the net invested 80 million reais ($40 million) to buy the three-studio center, build an additional five studios at the site and supply it with topnotch editing and lighting equipment. The broadcaster has, since October 2004, produced eight 200-episode telenovelas at a total cost of $170 million. The net’s total investment in telenovelas, including the costs with talent, amounts to $300 million since 2004.

It initially attempted to hire an indie producer to make its telenovelas, but production house Casablanca’s “Metamorphoses” had disappointing rating in the first half of 2004, and TV Record decided to implement a studio-systemlike structure similar to the one of TV Globo.

Recnov is even located in the rural western district of Rio near TV Globo’s Projac. TV Record also has hired a permanent cast of actors and scriptwriters, in addition to producers and crew members, following TV Globo’s model. More than 140 actors have exclusive employment agreements with TV Record for more than three years.

The net hired much important talent from TV Globo — such as actors Patricia Franca, Luiza Tome, Bianca Rinaldi and Marcelo Serrado, and writer Lauro Cesar Muniz — which is one of the reasons why it set Recnov near Projac.

The competition from a second major telenovela producer led to an overall increase in wages for all types of telenovela workers, including stars, writers, camerapeople and technicians of all sorts.

The No. 1 broadcaster fought back, increasing wages and managing to keep the bulk of its permanent casting.

TV Record’s plans are ambitious: “Record made the strategic decision of reaching the market leadership, and every single step that is taken in the company is aimed at achieving this goal,” Silveira tells Variety at his Recnov office. “We understand it is a process that will not take less than three or five years, but we are sure we will eventually get there.”

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