From 2007, Marcos Santana has built up Telemundo International into the second-largest distributor of Spanish-language content in the world, which can draw on Telemundo shows and also those from a multiplicity of strategic TV alliances across Latin America. Telemundo International made the running in Latin American biz announcements at October’s Mipcom, for instance, unveiling international distribution-co-production alliances with HBO Latin America and top Chilean broadcaster, Mega. Equally, on March 29, Season 4 of “El señor de los cielos (“Lord of the Skies”) a Telemundo Super Series – a concept of faster-scripted, action-packed and shorter-scripted drama series that return for multiple seasons – bowed on Telemundo to the biggest total viewer premiere ratings in its network history: an average 2.79 million, caked by a social network engagement tie-up with AT&T. An institution in the Spanish-speaking TV business – Santana launched distribution company Tepuy Intl. as far back as 1989 – and a bridge for many operators between their local operations and the U.S. and international, Santana talked to Variety about vertiginous change in Latin American TV viewing habits, production and distribution.
From your privileged viewpoint, what are the two- or-three key current changes in Latin America’s TV business, especially in drama?
Marcos Santana: Young viewers who traditionally watched Latin American series five years ago have changed, their minds have opened up, primarily thanks to Internet and the wide offer of content therein. They’re more open to seeing primetime fiction from most anywhere in the world, be it Korean, Turkish, American, etc. This has forced us, as producers, to raise the bar on quality notably over the last five years.
The Internet has also intensified competition…
For 40 years, Latin American product has been rather flat: same cast with the same production values. Over this span, we’ve moved from B/W to color to HD: These have been the major changes. But it was always the same type of stories. Now we’re faced with competition, pushing us to make different stories and significantly improving production values; a major game changer. The two largest producers, with the greatest resources, are Televisa and Telemundo, and each has had to invest a great deal of money and more resources, whilst adapting their outlook. In the past, we sought native actors for each role whereas today, the origin of the actors doesn’t matter as long as they’re talented, whether they are Spanish, French or whatever. We now see a mixture of nationalities in our productions from Argentine to Mexican to Venezuelan, Colombian…
The change in budgets and production values, has spurred a change in potential markets?
Yes, these very big series, that have two or three times the budget of a telenovela, are in a different style and involve actors of all nationalities and help open new markets. Primarily, they open the OTT market. The most widely-sold Netflix series today [in Latin America] is “Lord of the Skies” and prior to that “Queen of the South”. For this reason, conventional series have a harder time succeeding, because the consumer looking for something on Netflix or Amazon or Telefonica’s Movistar Plus in Spain is seeking high-quality productions- they just don’t watch free TV anymore.
Telemundo International has been actively advancing the overseas interface of Latin American series via agreements announced at Mipcom with HBO Latin America and Chile’s Mega. Both before made, respectively, regional and local series. Could you explain their deals’ rationale?
Those agreements work in various ways. For example, Mega in Chile has good writers and a project development center. We signed in October and now in April we are going to start production of a Mega series for Telemundo.
That’s a remake for the Latino market?
Yes, a remake shot in Miami, in Spanish for the Latin American market. These agreements not only secure the producer but gives us distribution rights to sell its original productions, as well as various other types of deals. With HBO the agreement not only envisages distributing original HBO product but also co-producing with HBO.
One factor stressed at this year’s MipTV, by RTL’s co-CEO Guillaume de Posch, for instance, is scale. Some companies have achieved that- Endemol was a pioneer, for example- by inorganic growth, buying up companies around the world. Your business model’s different, I think.
Yes, I’m responsible, amongst other things, for international co-productions for the company. At the moment, we have a long-term deal to produce short series with Sony Mexico, under which we have worldwide distribution rights- we are taking advantage of Sony’s know-how to produce something different, with a different texture. We are also producing with the company Fox has in Colombia and we do a series every year with Disney in Mexico. Our model isn’t at all like Endemol’s, one that I believe is outdated. We would rather work from the basis of the story to find the best possible producer for each project, where the script itself would dictate the country where it should be shot. Telemundo has approval over everything from cast to production budget and pays the company a production fee for its services. When buying companies who have to ensure you have several projects to amortize the investment or the productions could become very costly in order to maintain the company’s infrastructure.
As Latin American broadcasters develop OTT services – Televisa’s Blim, Globo Play- the logic is that this could help build a stronger independent production sector in Latin America, where so much TV has been produced by broadcasters in-house. How will this affect your co-production policy?
We are the only Hispanic company with a very American mentality. We work with whoever has the best idea and can provide the best service for any given project, throughout Latin America. Telemundo is the only Spanish-language broadcaster in the U.S. that generates its own content. The only one- and we generate a great deal of content!
As more consumers consume content first and foremost online, on mobiles for example, how will this affect the kinds of drama series you make and how you make these shows?
For every series we do, “Lord of the Skies” for example, there is a team simultaneously producing capsules, content and stories for mobile. They have their own production budget and are getting good traffic.
That’s the world of content today. I don’t know if it will be that of tomorrow as well. What I do know is that the focus is evermore on seasons. Humans have the ability to create unconscious fidelity. Movie-goers see “Fast and Furious” and they want to see the other six films. We wait for “House of Cards” every year. With “Lord of the Skies,” we are releasing season 4 whilst writing and producing season 5. It’s about the franchise and the brand created. We want to follow stories and have the sense of being experts in the field!
And yet, despite huge change, as Dominique Delport, Vivendi Contents head, observed in his MipTV keynote, when it comes to turnover, revenues from TV advertising and pat TV still dwarf those from the SVOD sector.
Yes. The future reality of television is yet to be seen. The advertising sector still hasn’t reacted. Companies, agencies, their representatives are still putting money into [traditional] advertising. 80% of ad money continues to be in lineal television and 20% in digital, i.e. mobile and Internet. When advertising changes, and it becomes 80% digital and 20% lineal, some cable companies will likely disappear, some free TV channels will as well. There will be fewer free-to-air networks broadcasting big live events and news. Content will become either blockbuster premium or low-cost. The entire middle ground is going to disappear. And who wants to watch low-cost TV productions? No one. Young kids want to see premium, although these days they aren’t up for more than 10 minutes of viewing.
So this is your main challenge?
Our main challenge is to preserve the presence of our product across all viable platforms and adapt to the changes that are already happening, i.e. to ensure our content remains in the new media. The second challenge is trying to win back young audiences.
Throughout the world, television is increasingly for older viewers, whether it be cable or free-to-air, mainly viewers 30-40 and above. The challenge is how to reach the younger viewers, via any platform. They are simply not coming back to traditional TV.