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Brazil Pay TV and Internet Are Booming, Per Report

Brazil’s audiovisual market is outpacing the rest of the world’s, according to PwC’s Global Entertainment and Media Outlook report. Presented recently at Winston Baker’s TV & Film Finance Forum Latin America in Rio de Janeiro, report reveals that Brazil’s pay TV market is expected to grow 13.3% between 2013 and 2017 compared to a global average of 3.8%. Internet access will likely grow by 14.7% in contrast to a global average of 11.1% and filmed entertainment should grow by 6.7% compared to a global average of 3.6%.

Per Alberto Pecegueiro, director general of major Brazilian pay TV company Globosat, pay TV growth in Brazil is driven by the rising upward mobility and purchasing power of middle and working classes in the country. “These are matched by major investments and an aggressive growth strategy from the telcos,” he said.

Distributed to 18 million homes in Brazil, Globosat is seen by more than 20 million viewers daily. Its 35-channel portfolio includes 21 in HD, nine pay-per-view and six on-demand services and an international feed for overseas soccer fans.

Spurred by its film industry’s growth in market share, pic production output and ticket sales in 2013, Brazil’s government kicked off a $540 million funding program this year, which aims to make the country the fifth global audiovisual content market within a decade, up from its current ranking at number 10.

The program centers on four areas: projects and formats development, local content production, professional training and the construction and modernization of movie theaters. This complements local funds such as RioFilme, a lead sponsor in the Winston Baker TV & Film Finance Forum, whose equity participation in the production and distribution of big homegrown pics helped boost local film market share up to 18% in 2013; and the Sao Paolo-based, $33.5 million per year film investment initiative SP Cine, unveiled at the Venice Film Market, which is set to launch first half 2015.

YouTube, Netflix and iTunes lead the region’s internet market growth. Apple tapped Brazil’s Fabio Lima of Sofadigital to aggregate content for iTunes. “We’re releasing four to five titles a week on iTunes and VoD,” said Lima, who secures rights to local as well as European and indie pics.

Netflix reported a growth spurt in Latin America between July 2013 and June 2014. The OTT’s downstream traffic grew 5.1% in the first half of 2014 compared to 1.9% during the same period in 2013. It’s still a far cry from its penetration in the U.S. but the resistance to online payments and the region’s underdeveloped e-commerce infrastructure has hampered growth. Netflix is currently experimenting with various pay structures to address the issue.

Variety was a media partner in the forum held Aug. 13 at the Copacabana Palace in Rio.

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