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RIO DE JANEIRO — The once-unchallenged No. 1 net, TV Globo, suffered another blow recently as No. 2 TV Record announced it has copped the exclusive Brazilian rights for the Guadalajara Pan-American Games 2011. A few days later, TV Record also confirmed a deal with Mexico’s Televisa for the co-production of telenovelas in Brazil.

These two announcements contributed to the perception that there is finally competition in Brazil’s TV market, which since the 1970s has been dominated by TV Globo. At stake is an annual ad spend totaling 5.6 billion reais ($3.3 billion) in the first half of this year, up 15% from the same period last year.

Indeed, there has been some change in audience. In January-August of this year in Sao Paulo, TV Globo had an average rating from 7 a.m. to midnight of 17.8 against TV Record’s 8.7 and SBT’s 6.4. In the same period last year, TV Globo stood at 19.4 against the 7.2 of TV Record and 6.7 of SBT, according to research firm Ibope.

“The initial interpretation is that there is a nine-point gap. But it should be interpreted as a direct confrontation, in which we have to take 4.5 points from Globo to be co-leaders,” Record’s president Alexandre Raposo tells Variety.

Counters TV Globo’s general director Octavio Florisbal: “The variation of TV Globo’s ratings is within the expected range. We kept a comfortable leadership in all regions and periods of the day, and we air all top-30 most-watched shows.”

The bad news for Mipcom sellers is that the programming of both TV Globo and TV Record rely heavily on inhouse-produced telenovelas.

Since 2004, TV Record has invested $340 million in programming, the bulk of it to buy and expand a telenovela production center in Rio and hire exclusive writers, casts and crews. TV Record now makes two telenovelas simultaneously and will soon co-produce a third with Televisa, while TV Globo makes four telenovelas simultaneously, not to mention other program genres.

TV Globo and TV Record will send buyers to Mipcom, but their interest is limited because their focus is on local programming and because they already have volume deals with U.S. studios: TV Globo with Sony, Fox, Disney and DreamWorks; TV Record with Universal and MGM. SBT has a deal with Warner Bros.

Sports rights seem to be the main foreign interest of TV Record and TV Globo. TV Record has bought the exclusive rights for Brazil for the 2012 Summer Olympics in London in addition to several European soccer league rights. TV Globo has FIFA’s soccer World Cup in 2010 (in South Africa) and 2014 (in Brazil) and all of Brazil’s national soccer team matches plus all top local soccer leagues. The nets are expected to be locked in a struggle for the 2016 Summer Olympics and 2018 soccer World Cup.

The big nets are also increasingly facing the competition from pay TV and new media. Brazil’s total number of pay TV homes reached 5.4 million in March, up 13% from March 2007, according to Brazil’s pay TV association ABTA. The number of Web users in Brazil reached 23.7 million in July, up 28% from the same month last year, according to Ibope.

In spite of the significant rise, Florisbal stresses that pay TV is present in just 11% of the country’s households, and just 13% of those have broadband services, while free terrestrial TV has a 95% penetration.

TOP 3

“A Favorita” (TV Globo)

“Jornal Nacional” (newscast) (TV Globo)

“Beleza Pura” (TV Globo)