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Streaming Changes the Game for Latin American TV

New streaming services are coming to Latin America, and with them come both huge opportunities and huge competition. Apple TV Plus launches in Latin America on Nov. 1; HBO Max sometime around or after spring 2020; and Disney Plus in October 2020.

“There won’t be money in the world for platforms to 100% finance all the content they need, targeting each and every demographic,” says Manuel Martí at Argentina’s Pol-ka.

So, he argues, two strong business models will thrive.

One is “work-for-hire for platforms in a global environment, where they buy all rights and fund 100% of production costs”; the other, “co-production, where production companies work as studios, sourcing co-funding in other countries from other channels, networks and local operators, where no one owns 100% of the IP and platforms buy a stake in shows.”

“I think that platforms, networks with studios, should be open to different business models. The key is flexibility,” says Marcos Santana, Telemundo Global Studios president. “TGS produces series we make ourselves, others are co-financed, or have minority producers or are pre-sold.”

Latin American TV production once predominantly targeted national markets. A streaming universe is creating new markets, such as a pan-Spanish language market on pay TV and especially SVOD.

Already, in terms of scripted shows currently in production or development by language, Spanish rates as the third largest in the world, its 160 shows 52% up on French (105 shows) and nearly doubling German (85), according to a study by Ampere Analysis.

Responding to current and anticipated future demand, the region’s strongest pay-TV players are ramping up production to not only face off with, but also feed, current and future streamers. Turner Latin America used to produce 20 hours a year of high-end scripted series; now it produces around 120 hours, of some 8,000 hours of total programming, including Chilevision and sports channels, says Tomas Yankelevich, Turner Latin America exec VP and chief content officer, general entertainment, Turner Latin America.

Producing 900 hours since the beginning of 2018, following Viacom’s purchase of Argentine network Telefe and Brazilian online comedy show Porta dos Fundos, Viacom Intl. Studios expects revenues to grow 60% in 2019, says Pierluigi Gazzolo, president of Viacom Intl. Media Networks (VIMN) Americas.

He cites banner deals such the English-language remake of the Telefe/Underground-produced hit “100 Days to Fall in Love” (by VIS and Paramount TV for Showtime) and the creation of a Mexican version of Porta dos Fundos.

OTT is also changing the balance of power between markets in Latin America. Turner Latin America is producing much more in Mexico than the rest of the region.

“Mexican pay TV average revenue per user has been traditionally relatively low,” says Yankelevich. “With close to 40 million Mexicans living in the U.S. and HBO Max going direct to consumer, however, Mexican content is now very valuable for the new market.”

As free-to-air advertising languishes, only co-production will allow players to attain efficient production values to compete with, produce for or sell to streamers. So co-productions and larger production alliances now abound: Telemundo with Spain’s Movistar Plus; Globo with Sony; Turner with Mexico’s Dopamine, Spain’s Mediapro Studio and Argentina’s Telefe, Canal13 and Cablevision.

Facing growing competition in and from the OTT space, Latin American players are forging their own event series, whether in scale (“Hernán”); novel distribution (Globo’s Netflix-style global distribution for “Aruanas”); English-language production (Globo’s “The Angel of Hamburg” and “Rio Connection”); or remaking legendary novelas (Televisa’s “Fábrica de Sueños” short-format series).

New players are entering the fray, such as Telefonica Movistar, with its first three original series: “Un día eres joven,” “El día de suerte” and “Ruido Capital.”

Globo’s OTT service Globoplay is “producing ever more original content,” with six new series this year, not to mention returning titles, says Globo CEO Carlos Henrique Schroder. “This effort aims at offering an ever broader range of options,” he adds. Bowing three new soundstages in August at Globo Studios, Globo has increased its production capacity by 50%.

Mediapro has announced its first production in Chile and appointed seasoned TV producer Juliana Barrera to power up production in Colombia.

The tenor and genre of output is also evolving:

“Latin American action series used to have the highest production values. Drama and comedies were not treated as high-quality content. Now, we’re trying to make them at the same production level, as high as action series or thrillers,”says Yankelevich, at Turner Latin America, citing romantic drama “Amarres” and bio-series “Bronco.”

The question for many operators is if they want to try to go global, or target their home market.

Series such as Globo’s three English-language shows with Sony are global plays. Other players are practicing step-by-step internationalization. Pol-ka  from a long-format producer for Argentina to a premium producer of global markets (on HBO’s “The Bronze Garden,” Disney’s “Violetta”) to a producer of great shows outside is native Argentina, where Pol-ka brings talent, some talent and above the line teaming with writers, directors from other countries, “We believe that’s the true future,” Martí says.

The Spanish-language market is huge and increasingly receptive to other accent, however. In all, 90% of people who have seen Spanish-language series “Money Heist” and “Cable Girls” have done so outside Spain, Netflix’s Francisco Ramos said at the launch of Netflix’s first European production hub.

However, many series are Latin American targeted, not global market plays, says the Wit’s Bertrand Villegas. “The main market TV operators have to care for is their own.

Operators could lose it if they focus too much on international. Latin America is working more and more with Latin America,” Villegas adds, citing a burgeoning pan-regional remake business.

One thing seems certain, however. Says Santana: “The TV [model] which functioned for 60 years making low cost novelas is dying. Latin American audiences have migrated to quality TV made in their language. It’s irreversible.”

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