New Markets, Old Styles, Big Money

Michael Hedges June 26, 2014 Follow on Twitter

Major events always offer journalists vast opportunities to explore a host country, seeking color and controversy. Editors demand new stories, reporters comply. Media business writers have, generally, three themes to chase: money, digital and weirdness.

Television ratings in Brazil for the opening World Cup match against Croatia showed only 37.5% of the population tuning in. Local media watchers compared the result to the 65.7% share for Brazil’s opener in the 2006 World Cup and 45.2% share for the opening South Africa 2010 World Cup match. One might think executives at television network Rene Globo would be singing the blues.

Probably not. Rene Globo is Brazil’s major television network, which underestimates the broadcaster’s imposing strength. Pay-TV audience in Brazil has tripled since 2010. In four years 30 million more Brazilians have subscribed to pay-TV channels, according to regulator National Telecommunications Agency (Anatel). Globosat, also owned by Organizações Globo, is the biggest pay-TV operator in Brazil as well as Latin America.

Globo Comunicação, a subsidiary of Organizações Globo, is 25th in the 2014 IfM top global media rankings with a shade more than € 5 billion in annual revenues, up from a bit more than €3 billion in 2010. (See IfM rankings here) In addition to being Brazil’s major television and radio broadcaster, it publishes the country’s dominant newspaper – O Globo – and operates production houses, a music publisher and dozens of websites.  The company is principally owned and managed by the Marinho family, grandsons of O Globo’s founder.

Rene Globo thrives on telenovelas, explained the Economist (June 7), airing three a night, six nights a week, all produced at a 1930’s style studio lot near Rio de Janeiro; actors, writers and crews all under contract. Audience shares have dropped slightly in Brazil for Rene Globo telenovelas in recent years but the company exports full productions and formats to more than 100 countries. Rene Globo has a long-term production agreement with Portuguese broadcaster SIC in which Globo Comunicação was an original investor.

Rene Globo telenovelas, pervasive as they are, have enormous impact on Brazilian society, bringing difficult issues to everyday conversation. A decade ago a major character in telenovela Laços de familia was diagnosed with leukemia and after the final episode the National Cancer Institute noted a sharp increase in bone marrow donations. At the same time, product placement is hardly subtle.

Company president Roberto Irineu Marinho and his two brothers, João Roberto Marinho and José Roberto Marinho – company vice presidents both, are Forbes-list billionaires. João Roberto Marinho is company editorial director and José Roberto Marinho is in charge of the radio networks and stations. Their children, too, work for the company.

The Economist article compared the Marinho family to Clan Murdoch, family patron Roberto Marinho an arch newspaperman who lived to 99 years. Local Brazilian critics see traces of Berlusconi. When UK Channel 4 produced a critical documentary – Beyond Citizen Kane – twenty years ago the company made sure it was never broadcast in Brazil. Aside from occasional tax and property issues the Marinho family keeps a reasonably low profile for billionaires in the media business, maintaining profitable relations with politicians of every stripe.

The internet has arrived in Brazil, like everywhere else. Although Organizações Globo owns and operates dozens of websites, there’s no love for bloggers. A recent editorial in O Globo (June 21) called bloggers and independent journalists “storm troopers in the digital world (stoking) more militancy.” The Committee to Protect Journalists recently reported Brazil as the number one country for Google search take-down requests.

See also in ftm Knowledge

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 137 pages PDF (January 2013)

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