Latin America: The Low-down on localism, fees and what sells

In the early 90s, the face of television in Latin America changed. Signal encryption put an end to the pirating of u.s. satellite services, which had been the backbone of an illegal broadcasting industry for decades. With the promise of a...
May 1, 1998

In the early 90s, the face of television in Latin America changed. Signal encryption put an end to the pirating of u.s. satellite services, which had been the backbone of an illegal broadcasting industry for decades. With the promise of a fair playing field, the region attracted big players like Fox, nbc, Discovery, espn, hbo and mtv, to name a few. A market once tightly controlled by government agencies was deregulated, and an estimated 100 million television sets were up for grabs.

Even with this Latin version of Glasnost, the region remains a paradox. Non-Latins have a tendency to treat the multi-national area like one country, which invites failure. Brazil, for example, is a massive and modern country of almost 200 million people that shares a border with Paraguay’s five million, but doesn’t share the same language or culture.

With satellites and modern technology, no market is too small to exploit. Like Asia and the Middle East, relationships and persistence are key to breaking into Latin America. Just getting calls and faxes through can be an exercise in frustration. Getting deals done is another matter entirely.

Where the buys are >>

Who’s there and what they acquire

A quick survey of factual distributors reveals that most are doing steady business with the big three: Argentina, Brazil and Mexico. The more adventurous have tried their hands at Chile and Venezuela, but not many venture beyond that. Luckily, the question of what to sell is more simply addressed than where to sell.

Born in Puerto Rico and involved in the Latin market for almost nine years, Salsa Distribution’s managing director, Lisa Hryniewicz, has a special insight into what kind of programming the market demands. ‘In Latin America, the documentaries can’t be too intellectual, too slow, too pedantic. Something that’s fast-moving and has a modern look to it, whatever the subject is, is more likely to be successful. In general, there’s so many options on television that it’s harder and harder to keep audiences fixed on something.’

In the land of telenovelas, it isn’t surprising that Hollywood movies draw the most viewers, followed by local news and sports. Natural history programming ranks fourth among audiences, and both science and technology programming find their way into the top ten. The demand for wildlife is somewhat dulled by the fact that many broadcasting outlets are already tied to deals with Discovery, National Geographic and the bbc, but it remains a healthy market.

Among the more difficult sells are cultural docs, which have to be Latin-specific, and tend to get picked up only as 13-part series. Similarly, travel programming, although formerly a big attraction, looks like it has hit its peak.

Non-fiction related to American features and news programming does well. Biographies, especially those about Hollywood figures, enjoy wide popularity. Reality and disaster-tainment, cheap and easy to produce, are huge, although some distributors are making noises about the genre approaching saturation.

Just prior to press time, however, Studio City’s GRB Entertainment announced its biggest-ever deal in Latin America (rumored to be over us$1 million) with long-time partners Discovery Communications. The Hollywood and disaster-tainment producer will provide Discovery Channel Latin America with over 100 hours of programming, including titles such as Movie Magic, Anatomy of Disaster, What Went Wrong, Storm Warning, Micro Invaders and Sea Tech.

One of the reasons grb has enjoyed as much success as it has in Latin America could be the modular format of its product. Ranging from five to seven minutes in length, with almost no talking heads, grb’s blocks of programming are inexpensive to reversion and can easily be cut into a variety of local current-affairs productions.

Kim Relick, vp of distribution and business development at grb, sees the demand for her product expanding as regions develop. ‘When you get into a competitive market, and when advertising revenue has increased, [broadcasters] can’t make product fast enough, or cost-effectively enough. That’s when our product comes into its own.’

Satellite and Pay-TV Services

‘The Latin American market is very much similar to the u.s. market,’ explains Ed Galton, director of international sales at Fox Lorber Associates in New York. ‘Terrestrially you just don’t see the documentaries on free television. How many documentaries do nbc and abc and cbs broadcast a year?’ Very few docs can command the audiences to which networks try to appeal.

A deal like the one grb struck with Discovery is the dream of most Latin American distributors. Whether Discovery’s competitors like to admit it or not, every distributor asked picked dci as its choice for first window into the region. With four networks (Discovery, Discovery Kids, Animal Planet, and Travel/People and Arts), Discovery is offering the highest fees and, perhaps more importantly, a quick and painless pan-regional buy. While no vendor would go on record with a licence-fee figure for fear of alienating the cablecaster, one suggested that a top-notch, Discovery-style doc can reach as high as us$15,000 per hour for Latin-market rights. That’s a respectable figure, even by u.s. standards.

Few domestic services can compete at that level. Mundo Olé, a two-year-old pan-regional service begun in Mexico by Venezuela’s Olé Communications and hbo, was pegged as the service most likely to try, but has chosen to go in a different direction from international competitors. Last year, a third of Mundo Olé was purchased by a&e, which brought with it a library of high-quality historical and biographical programming that might make Mundo Olé’s task easier. Almost 60% of its slate is now filled by a&e, with the balance supplied by programming partners, Columbia Tristar, bbc, Fremantle, cbs, Reuters, Warner Bros. and Spanish Television. Disney also recently joined the hbo-Olé group venture, putting even more docs within Mundo’s reach. It will begin airing ABC/Kane’s Living Edens in May.

Tony Salanova, marketing and brand manager for Mundo Olé, explains the difference in approach between his company and dci. ‘Two years ago, there were no special slots on pay television for documentaries. There was only Discovery, and all they were doing was animals. We didn’t want to do the same thing that they were doing. We wanted to give people documentaries about people and history. At the beginning, it was very difficult for us because it was new in pay tv. People thought it was really strange: ‘Do you think people are going to watch this stuff? It’s boring. No one turns on a tv set to learn.”

Mundo Olé does have the advantage of being part of the hbo satellite bouquet, packaged with Sony Television Entertainment, the Warner Channel, the E! Entertainment Network, Cinemax and hbo. With the access that premium group has afforded them, they have been one of the few services able to compete with dci for viewers. With encouragement from a&e, Mundo has even begun planning locally produced episodes of Biography, which should begin to hit the air in Latin America at the end of this year.

Even with the backing of some big names in international broadcasting, Mundo is reported to be paying only a fraction of dci’s fees. The typical range suggested is between us$1,000 and $5,000 per hour.

Argentina’s Imagen Satelital is also a likely outlet for factual programming. With several stations under the Imagen umbrella of services, including Orbital and Space, the operator has a need for a high volume of programming, but generally only pays about us$1,000 an hour for non-fiction.

A thousand dollars appears to be the average fee for satellite and pay documentary programming in the region. The fringes of the genre fare a little better. With the huge demand, disaster-tainment (or ‘commercial shock programming’ as it is more properly designated), pulls in better hourly rates. The price put on flood, fire and earthquake footage ranges from us$8,000 an hour in Mexico to us$5,000 and up in Argentina and Brazil.

Free Television

Even if they’ve managed to find space on one of the pay services, distributors have only scratched the surface of the free-tv market. Most satellite and pay services will not take free-television rights (terrestrial rights), or will only require a six to 12 month hold-back, allowing vendors to try their luck on the free market a few months after the program has aired on pay. The free-television market can be lucrative, but it generally involves a more determined effort to reap its rewards.

Raking the region territory by territory is something many companies are not in a position to do themselves, therefore a market has sprung up for sub-distributors who do the legwork and handle the Spanish or Portuguese dubbing for a cut of the profits. For their efforts, most agents will take the income from a single territory and a 30% cut from the rest, or ask for a 50/50 split on everything they sell. It’s an option many foreign distributors are considering. For those others daring enough to try their luck with the local stations, success varies depending on genre and size of the catalogue.

Brazil, Mexico and Argentina are also the best markets in which to make free-television deals, with typical fees ranging between us$1,000 and us$3,000 an hour for top docs, with the outside possibility of us$5,000 for something really special. Names most mentioned by factual programming distributors include Brazil’s TV Cultura, TV Quality in Argentina, and Mexico’s Channel 22.

There are opportunities in all of the Latin markets, but fees drop off quickly when you stray from the beaten path. Licence fees for docs in Chile and Peru, or for the Education and Culture Channel (Channel 10) in El Salvador, for example, can range from as little as us$200 to us$400 an hour.

If the local-language version is already made, or if programming is packaged in a substantial quantity, even these figures can add up quickly. If the only cost is for the dub, then even small Latin markets represent profit, if they can be tackled efficiently.

Carriage & Competition

‘Right now it is like a tornado down in South America,’ cautions Salanova. With so many outside interests rushing to capture the limited number of profitable broadcasting slots available, the television landscape in Latin America has become a vortex of acquisitions and station launches.

It has been suggested by more than a few local parties that Discovery’s purchase of the Travel Channel last year was a thinly veiled grab for the five million subscribers and the carriage the channel enjoyed. People and Arts, a co-venture with the bbc, has been seen by many as an attempt to beat other cablecasters (like a&e) to the punch for personality and historical programming.

Regardless of motivation, dci and the other u.s. mega-interests have become the horses to beat in Latin America. Max Weiner, international sales director of Belgium’s CDC United Network, sees two ways competitors can hold their own against the Discoverys of the region: fees and programming.

Localization is the route most Latinos have chosen to stave off foreign invasion. ‘To compete with the Discoverys, they’re trying to make more relevant local programming. This is the standard approach to free television when trying to compete with a pan-regional broadcaster,’ says Weiner. Making programming that is more immediate and relevant to Latin viewers will give domestic broadcasters an edge, at least temporarily.

Money management, however, remains the traditional method for survival. According to Weiner: ‘The only way someone can compete is to offer tiny amounts in terms of licence fees. If they can get 24 hours of programming for 10% of what it costs Discovery to do the same thing, they can survive off 10% of the subscriber base.’ Given the fees most distributors quote, this is the method of choice for most Latin broadcasters.

Brand identification is also a problem for many Latin companies. International recognition, and a cultural predisposition to emulate things American, gives u.s. brands an advantage. Ultimately, the best-known name will pull in the most viewers, and, in this, even dci might have to be cautious.

‘I think National Geographic will pose Discovery a problem, in as much as they have a brand which is very well known in Latin America,’ explains Weiner of the ever-pending Nat Geo launch. ‘The only way someone is going to compete with Discovery is if they have a brand they can leverage off of. Someone coming out tomorrow with an unknown channel without any brand is going to have a hell of a fight.’

How much room there is for new players in the market is open to debate. ‘I think that there are only so many channels that you can have in a country, or in any area,’ observes Hryniewicz, ‘and there is a huge amount in Latin America. I can’t imagine that this rate of growth could continue indefinitely.’

Cesar Diaz, general manager of Telefe International, describes the future for services in the region in a single word: ‘Tough.

‘The law of Darwinism is still in effect.’

Programming: the Latin Approach

With the huge amount of competition for viewers in the region, broadcasters have to be pragmatic about the amount of time they can realistically spend in homes. Telefe, an Argentinean network that launched an international satellite arm on the 13th of April this year, has experience in both terrestrial and satellite broadcasting.

‘We’re not expecting people are going to tune in and stay in,’ explains Telefe International’s general manager Cesar Diaz of his new satellite service. ‘As soon as they find out what the schedules are, people will tune in to watch their local news, or a specific program they like, and then get out.’

Guerrilla viewership is the norm for Latin satellite audiences. On the ground, however, Diaz says Telefe does everything it can to keep viewers, and has been the number one network in the market for the last seven years.

How They Do It: Broadcasters talk about their approach to the market


Rick Rodriguez, vp, programming,

Latin America/ Iberia

Launched in 1994, Discovery Latin America is a Miami-based cable and satellite network providing 24-hour service, pan-regionally, for four networks. Now transmitting eight signals (for different language services and dedicated regional services), Discovery has the capacity to broadcast up to 21 signals.

- ‘The critical thing was focusing on customization and making sure the product was as tailored to the market as it could possibly be. It wasn’t just a matter of dubbing it, it was a matter of customizing our on-air promotion, recognizing the region we were in and appealing to the nationalist interest.’

- ‘I don’t want Discovery to ever be perceived as a cultural imperialist. It was critical that we be seen as investing in the region. Appealing to my own pride as a Latin American, I wanted to make sure our stories were being told as well.’

E! Entertainment Television

Jon Helmrich,

vp, international development

E! Entertainment Television was launched pan-regionally in November 1996 on the HBO Olé bouquet. Its strongest markets are Mexico and Argentina, but it has begun expanding efforts in Brazil. E! had not offered a Portuguese-language feed until last summer.

E! has two feeds, uplinked from its facilities in Caracas, Venezuela, and currently produces about 100 minutes of local production per month. Local content is increasing on a monthly basis.

-’It’s a timing game. I think some channels went in too early. We made a conscious decision to do a full channel later. We could have done it five years ago, but by coming in when we did, the economic base and the potential was, and is, stronger. I do think there will be some fall out. I think we will see some channels disappear, but we’re seeing that in as sophisticated a market as the u.k. and Europe.’

ChumCity International

Stephen Tapp, vp & general manager

Toronto-based ChumCity began its involvement in Latin America (with local partners) with the launch of MuchMusic Argentina, in 1994. ChumCity signs format-licencing deals, offering partners proven content, tested advice and, to a large extent, self-control. As its philosophy centers around local content, over half the station’s programming is domestic and is entirely decided upon by its local partners.

ChumCity has just received a license for Channel 21 in São Paulo, a uhf station serving a market of 17.5 million people. With local broadcaster TV Bandeirantes, ChumCity is beginning plans to reformat the station into the ‘storefront’ that is the City trademark.

- ‘Localism is what we’re all about. We’re grounded in a grass-roots philosophy of being a mirror on the society that we’re serving.’

- ‘We’re covering issues that are relevant to that culture, as opposed to some imported culture from North America, dropped into Latin America, and trying to force it to be relevant to the people there.’

- ‘In a lot of these countries, they’re fiercely loyal to their history, their people and to their culture. Yet nobody, even the local services, were paying attention to that, or celebrating that. We go in, saying: ‘We’re Canadians. Here’s our history. Here’s how we do business. What do you think of it? What works for you? Let’s figure out a way to celebrate your culture.”

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