The Globalization of Latin American Media

...Globo and Televisa have grown to become vertically integrated conglomerates...

...More than half of these homes are cabled, while satellite linked homes number less than half a million...

...6B and 34-36B...

...4. Rubens Glasberg, "Bringing Up Brazil," Multichannel News International, April 1995, pp...

...At the same time, Latin America's major media corporations have also internationalized themselves, especially in the development of distribution and production infrastructure in the United States...

...DIRECTV...

...Argentina has nearly half the cabled homes in Latin America and more than twice as many as either Brazil or Mexico...

...3, 2003, pp...

...18NACLA REPORT ON THE AMERICAS 18 NACIA REPORT ON THE AMERICASREPORT ON MEDIA Venevisi6n International has also begun to produce Spanish-language programs in the United States that target Latino audiences...

...72-78...

...It enjoyed sympathetic treatment from most of the governments over this period, all from the party that ruled Mexico from the 1930s until 2000, the Institutional Revolutionary Party (PRI...

...335-42...

...Globo and Televisa have taken advantage of their supremacy in the world's largest Portuguese-speaking and Spanish-speaking country respectively, and have used that as a base for internationalization...

...As a result, they can export programs that have already paid for themselves in the home market...

...From Spain, there is Telef6nica's influence in the telecommunications and media sectors of Argentina and other Southern Cone countries in particular...

...It participates with Televisa in Univision-the leading Spanish-language network in the United Stateswhich is a strategic outlet for its store of programs...

...network, ABC...

...2 Globo has faced stronger competition It's the in the realm of subscription television, or pay-TV...

...In addition to Argentina, Endemol has joint ventures with Televisa in Mexico and Globo in Brazil...

...network [See "...Latino Media," p.20...

...In contrast to Brazil and Mexico, Venezuela's political history has been too turbulent to establish a longstanding protective relationship between the networks and a particular regime...

...Lulf Gim6nez Saldivia and Angela Hernmndez Algara, Estructura de los medios de difusi6n en Venezuela, (Caracas: Universidad Cat6lica Andres Bello, 1988), pp...

...Integrating North America for Cybercapitalism, Vincent Mosco and Dan Schiller (eds...

...Also see: Elizabeth Fox, Latin American Broadcasting: From Tango to 40 Telenovela, (Luton: University of Luton Press, 1997), pp...

...While there may no longer be the close relationship with government regimes that characterized the major networks' rise to power in Brazil and Mexico, there is still a relative absence of regulation...

...1 6 The high incidence of cable connectivity makes Argentine television prone to the convergence of media and telecommunications technologies and their industries on a global scale, making the Argentine market attractive to international investment...

...3. "UPM-Kymmene Watch," Veja, 1999, <www.upmkymmene.com/upm/publications/watch/99/ four.html...

...DIRECTV Latin America was launched by Hughes Electronics Corporation together with Grupo Abril, Mexico's Multivisi6n and Venezuela's Cisneros Group of Companies (CGC...

...In addition, by using the same production and distribution model as Globo and Televisa, albeit on a much smaller scale, Argentina's networks are able to export programs to neighboring countries and beyond...

...His son Roberto now commands Abril, just as control of Globo has passed to the three sons of the late Marinho...

...4, No...

...8, No...

...And unlike Argentina, in Venezuela there has been a notable absence of foreign ownership...

...2. Marcelo Cajueiro, "Marinho Clan Slaps Sale Sign on Debt-hit Globo," Variety, December 2-8, 2002, p. 22...

...In new media, he has partnered with AOL Time Warner in the venture AOL Latin America, which is trying to catch up with Telef6nica's Terra Networks and other Internet Service Providers active in the region...

...1 80-181...

...Lanham, Maryland: Rowman and Littlefield, 2001), pp...

...The merger brings into question whether DIRECTV Latin America will merge with SkyTV as a result...

...Grupo Clarin...

...Promedia share 2000 total pais," AGB Venezuela Website, <www.agb.com.ve/libro2000/share/20.htm...

...In the new era of digital direct-to-home (DTH), in which channels are beamed directly from satellites to subscribers' homes, Globo was lucky to have aligned itself with the Latin American division of SkyTV...

...From s in Brazil, the development of the most Murd powerful media corporation in Mexico of Tel was a family business...

...Telefe, one of the two leading broadcasters, is fully owned by the Spanish telecommunications corporation Telef6nica...

...20, No...

...This is clear in the way in which their modes of participation in the regional DTH ventures have been determined by the maneuvers of global partners...

...Herndin Galperin, "Transforming Television in Argentina," pp...

...It has also invested in stations, first for a while in Italy, and then in Portugal after the privatization of that country's television industry in the early 1990s...

...The state sold its networks to an electronic goods retailer who launched them as TV Azteca in 1993...

...THE GLOBALIZATION OF LATIN AMERICAN MEDIA 1. Rafael Roncagliolo, "Trade Integration and Communication Networks in Latin America," Canadian Journal of Communication, 1995, Vol...

...Since local programs attract the best advertising revenues, there is incentive for the national networks to produce and distribute their own programming, just as in Brazil and Mexico...

...2 5 ven though a more competitive environment has emerged out of the wave of deregulation and privatization of the 1990s, the region's established market leaders have not suffered much erosion of their dominance...

...Grupo Clarin Web site, 2003, <www.grupoclarin.com/espanol/grupoclarin/estruc tura-grupo-clarin-sa.html...

...They are also horizontally integrated, owning companies across related media fields, which gives them synergies, such as promoting their recording artists on their television and radio stations and in their magazines...

...And yet, there is not so much deregulation as to seriously challenge the basic duopolistic or oligopolistic arrangements that have evolved over the last few decades...

...6 Although DIRECTV Latin America continues to operate under bankruptcy protection, its future is uncertain amid the imminent News Corporation merger with Hughes/DIRECTV in the United States...

...The international activities of CGC's counterparts in Brazil and Mexico are based upon their dominance over the largest domestic markets in their respective geolinguistic regions...

...Andrew Paxman and Alex Saragoza, "Globalization and Latin Media Powers: The Case of Mexico's Televisa," Continental Order...

...On the international front, Globo has been particularly successful in Europe with its export efforts, partly due to its good reputation for producing telenovelas...

...Simeon Tegel, "Battling Billionaire Powers Azteca," Variety, May 26-Junel, 2003, p. 22...

...7 Despite its forays into the international market, the key to Globo's strength, and the territory where it does by far the bulk of its business, is its home turf...

...7. Helena Sousa, "Crossing the Atlantic: Globo's Wager in Portugal," Paper presented to the conference of the International Association for Mass Communication Research, Oaxaca, Mexico, July 1997...

...Similarly, drastic currency devaluations such as have occurred in Brazil and Argentina in recent years and in Mexico at an earlier stage can cause a sudden debt crisis for media groups, making them vulnerable to foreign investment...

...Latin American media are unapologetically commercial in their purpose and organization...

...The historical absence of networks and the relatively recent deregulation has given a special promiVol XXXVII, No 4 JANUARY/FEBRUARY 200417 Vol XXXVII, No 4 JANUARY/FEBRUARY 2004 17REPORT ON MEDIA nence to cable, and more recently, to satellite-to-cable and DTH modes of distribution...

...Like Televisa and Globo, Clarin is a public company under the control of a single family with interests across a wide range of media industries...

...John Sinclair, "Dependent Development and Broadcasting: The 'Mexican Formula...

...8. Cajueiro, "Marinho Clan Slaps Sale Sign on Debt-hit Globo," p. 22...

...Televisa's international activities have involved participation in network ownership as well as program export and service provision, not only in Latin America, but also in Spain and the United States...

...1, pp...

...counterparts...

...8-9...

...For 25 years, the U.S...

...The Vol XXXVII, No 4 JANUARY/FEBRUARY 2004 John Sinclair is a professor at the School of Communication, Culture and Languages at Victoria University of Technology Melbourne, Australia...

...left: Televisa's Emilio Azctrraga Jean...

...Globo, however, does not possess as decisive a lead over the competition as it enjoys in broadcast television...

...His published work includes Latin American Television: A Global View, and New Patterns in Global Television: Peripheral Vision...

...They still remain under dynastic control, even though public share ownership is a necessary requirement to raise capital for new media ventures...

...The prospect has also been raised that Globo might shore 16 Nt'CIA REPORT ON THE AMERICAS 16 NACIA REPORT ON THE AMERICASREPORT ON MEDIA up its financial standing by bringing in a foreign owner--made possible by legislation passed under former President Fernando Henrique Cardoso permitting 30% foreign ownership...

...5 By the time DIRECTV Latin America filed for Chapter 11 bankruptcy in March 2003, Abril and Multivisi6n had left the consortium with Grupo Clarin of Argentina taking their place...

...Most Latin American corporations operate in a regulatory environment in which governments provide a level of both freedom and protection to media entrepreneurs that could only be the envy of their U.S...

...Televisa's dominance was achieved by the entrepreneurship of three generations of men from the AzcTrraga family...

...6 4 - 8 5 . 15...

...2 0 0 0 ,e women on the edge of their seats as they watch a telenovela...

...For their part, as selfdeclared supporters of the PRI, Televisa's owners and managers had no qualms about presenting a pro-government perspective in their news and current affairs programs...

...Wilmington, Delaware: Jaguar Books on Latin America, 1996), pp...

...These circumstances have fostered the growth of entrenched quasi-monopolies or duopolies across print, broadcasting and other media in the major national markets--the wave of liberalization, deregulation and privatization under neoliberalism notwithstanding...

...Federal Communications Commission turned a blind eye to Televisa's Spanish-language network in the United States, Univision, but eventually began enforcing foreign ownership provisions against the company in 1986...

...Under Cisneros, Venevisi6n formed part of a diversified industrial group, but since the 1980s, when control passed to his son Gustavo, the core business has increasingly become television and new media, notably DTH and internet services...

...Like Venevisi6n International, Coral is based in Miami, "the Hollywood of Latin America...

...Here it competes with call th Brazil's other major media conglomerate, Grupo Abril, the largest publishing operation in Latin America, controlling 67% of the nation's print media.j Abril's founder, Victor Civita, built up the company by publishing Disney comics and the leading newsmagazine, Veja...

...1 0 Globo's current situation illustrates how, regardless of their domestic-market dominance, the international activities and ambitions of major Latin American media corporations are kept in check by their vulnerability to global financial forces...

...At the end of 2002, Globo's market share was equal to that of all of its competitors combined, and it received 70% of the total advertising revenue for the nation's television sector...

...This duopoly compares to Globo and Abril in Brazil, Televisa and Azteca in Mexico, and to a more limited extent, Clarin and Telef6nica in Argentina...

...211-229...

...government and various U.S...

...The historical and structural advantages of the region's main players in the broadcast market have protected them and provided a base from which to launch themselves into new modes of television distribution and other convergent new media technologies...

...Globo's charge to international prominence dates back to the early 1960s, when newspaper magnate Roberto Marinho launched the network...

...CGC also fits the pattern of patriarchal, dynastic control and continuity similar to the history and structure of Globo and Televisa...

...Charles Newbery, "Argentina Salvages Revs with Reality," Mipcom Supplement, Variety, October 7-13, 2003, p. 34...

...John Sinclair, "'The Hollywood of Latin America': Miami as Regional Center in Television Trade...

...Colombia, Chile and Peru are much further behind, while the rest of the nations in the region are "net importers...

...81-101...

...8 Ironically, leftist President Luiz Indcio Lula da Silva appears to have saved Globo from the immediate crisis of 2002 by stabilizing the Real after he took office...

...News Corp.'s Rupert 3ch...

...htm?script Framed...

...189-213...

...Venezuela's pre-eminent network, Venevisi6n, was founded in 1960 by Cuban-born Diego Cisneros and kick-started with an initial investment from the U.S...

...In contrast, Abril partnered with the now bankrupt DIRECTV Latin America, the corresponding division of U.S...

...Each commenced in their respective market at an early strategic stage and formed a mutually supportive relationship with the government of the day...

...Until the struggle for economically viable and politically stable democracies is won in Latin America, the region's media industries will continue to be as much at the mercy of global forces as most other Latin American industries and institutions...

...Mary Sutter, "Endemol Soars in South America with a Pan-regional Approach," Variety, January 20-26, 2003, p.33...

...Globo bought a strategic 15% share-the maximum allowed for a foreign U.S.-based global corporations that e shots in hemisphere-wide media alliances...

...At the globalized level, the elites of the region are paying to watch first-run movies, music videos and 24-hour news in Spanish and Portuguese, or English from the United States...

...ith a population of some 24 million, Venezuela has by far the smallest market of the region's leading television nations...

...What has changed is the degree of internationalization experienced by media in the region...

...54-57...

...Giminez Saldivia and HemrnAndez Algara, Estructura de los medios de difusi6n en Venezuela, pp...

...15REPORT ON MEDIA two corporations share notable similarities in their development...

...2 6 There is also the growth in the number of U.S.based cable channels providing special Spanish and Portuguese-language services, such as HBO O16, MTV Latino, CNN en Espafiol and Fox Latin America...

...1 5 When commercial television began in Argentina in the late 1950s, the three private channels were prohibited from forming networks...

...Media, Culture and Society, 1986, Vol...

...In mid-2003, TV Azteca's audience share stood at 30%, with a corresponding 33% share of television advertising revenue-levels that are more than three times those achieved under state ownership...

...Meanwhile, it is business as usual for the national networks, as the mass market audience watch their favorite telenovelas (and now also some reality TV), interspersed with long commercial breaks for global and domestic consumer products and services...

...Since 1997, Emilio Azc&rraga Jean has led the company, guiding Televisa through its financial crisis of the late 1990s...

...Yet this makes it susceptible to the kind of crises of currency devaluation to which all the nations of this dependent region are prone...

...By contrast, CGC has no such natural advantage, yet it has achieved a level of international activity far beyond what its domestic market can support...

...3, pp...

...5. John Sinclair, Latin American Television: A Global View, (Oxford and New York: Oxford University Press, 1999), pp...

...1 9 Despite the predominance of foreign programming on cable, Argentine audiences, like domestic audiences throughout the region, maintain a strong preference for local programs...

...The wave of promarket reforms in the first half of the 1990s and the multiplicity of platforms have produced a volatile and much more competitive environment than in those larger markets...

...16 Hernin Galperin, "Transforming Television in Argentina," Latin Politics, Global Media, Elizabeth Fox and Silvio Waisbord, (eds)., (Austin: University of Texas Press, 2002), p. 29...

...Elizabeth Fox and Silvio Waisbord, "Latin Politics, Global Media," Latin Politics, Global Media, pp...

...SkyTV Latin America is a consortium that includes both Globo and Mexico's Televisa in conjunction with U.S.-based News Corporation and Liberty Media...

...As a result, Televisa was forced to cut back to a minority share in Univision...

...2 1 Like Organizagdes Globo, Grupo Televisa and Grupo Clarin, the Cisneros Group of Companies (CGC) is a conglomerate in which media are integrated both vertically and horizontally...

...Telef6nica has become a strong presence in the telecommunications and media industries of the region with activities in television production as well as distribution, particularly after its acquisition of the former Dutch company, Endemol, in 2000...

...RCTV offers strong competition to Venevisi6n in both the domestic market and in the arena of programming exports...

...Thus, for all of their market power, by global standards the Latin American media groups are big fish in relatively small ponds and subject to the dependent status of the nations they dominate...

...217-43...

...Under this analysis, Brazil and Mexico-the largest and oldest television nations-come first as "net exporters" followed by Venezuela and Argentina as "new exporters...

...Jos6 Antonio Mayobre, "Venezuela and the Media: The New Paradigm," Latin Politics, Global Media, pp...

...Television and New Media, Vol...

...investors Liberty Media and Argentir Hicks, Muse, Tate & Furst...

...The largest of these companies have used their domestic market strength as a basis for internationalization, especially within the region, but at that level they become subject to the vagaries of global finance and the strategies of U.S.based global media corporations...

...Globo Vice President Roberto Irineu Marinho...

...According to media scholars Elizabeth Fox and Silvio Waisbord, it is "the articulation between local, regional, and international capital," a form of globalization embodied by the DIRECTV and SkyTV ventures that integrates the new platform of digital DTH under U.S.-based corporations...

...Despite the series of new channels licensed during the privatization of the 1990s, television broadcasting in Venezuela remains dominated by two strong and internationally active networks...

...In 2002, Globo found itself in a debt crisis created by such a devaluation, prompting talk about the sale of assets such as its stake in SkyTV and the Portuguese SIC...

...Also see: Elizabeth Fox, Latin American Broadcasting: From Tango to Telenovela, p. 77...

...Although Univision's audience share is still well ahead of the other Spanish-language networks in the United States, its market leadership is coming under pressure from its main competitor, Telemundo-now owned by NBC-and TV Azteca's new U.S...

...Also see: Joseph Straubhaar, "The Electronic Media in Brazil," Communication in Latin America: Journalism, Mass Media, and Society, Richard Cole (ed...

...Consequently, Argentina stands in sharp contrast to the other major national industries under consideration, which were built on dominant national broadcasting networks...

...Both have perpetuated themselves through a dynastic and patriarchal system of family control...

...For decades, Televisa was a media conglomerate that enjoyed a quasi-monopolistic position in the Mexican television market...

...1 4 rgentina and Venezuela, with much smaller markets than Mexico or Brazil, form the next tier in the region's media hierarchy...

...In South America, Cisneros has been the major figure in pushing the expansion of the now bankrupt Galaxy/DIRECTV DTH venture...

...and Multicanal, which is owned by Argentine media conglomerate Grupo Clarfn...

...6. "DIRECTV Latin America, LLC Files Voluntary Petition for Chapter 11 Reorganization in U.S.: DIRECTV Service Will Continue as Normal Across Latin America," DIRECTV Web site, March 18, 2003, <www.directvla.com/newcc/news/news.asp?march%2 C18%202003.htm...

...32-33...

...9. Marcelo Cajueiro, "Real's Rally Pulling TV Industry Out of Crisis," Variety, May 26-June 1, 2003, p. 23...

...The vertically and horizontally integrated business model remains intact, protecting the advantages of production being linked to distribution and the synergies of one media form with another...

...9 Nonetheless, Globo is engaged in a major sell-down of its interest in SkyTV in favor of News Corporation and is open to offers for SIC...

...2 4 There are four national channels in RCTV's domestic network, and its international activities are centered on program production and distribution through the Coral Pictures Corporation...

...and Fred Vierra e-Communications International...

...Yet, while at certain stages the U.S...

...Yet, outside of Mexico, Televisa operates with much less protection and more regulation than at home...

...investor--of Independent Communication Society (SIC) and helped make it Portugal's leading network...

...With an infusion of capital and management advice from U.S.-based Time-Life and a congenial relationship with the military dictatorships that ruled Brazil for the next two decades, Globo soon became the major national network...

...Charles Newbery, "Jornadas Confronts the Pay TV Crisis," Variety, November 18-24, 2002, p. 20...

...The advent of new technologies such as DTH have strengthened the hand of U.S.-based global corporations in both the carriage and the content of subscriber services or pay-TV, leaving the Latin majors to consolidate themselves primarily in the traditional broadcast base of their domestic markets...

...1 7 There is foreign interest in free-toair or basic broadcast television as well...

...It continues to dominate, having survived both the loss of its alliance with the military governments and competition from new networks since the end of the 1980s...

...176-186...

...Christina Hoag, "Empire Building: The Slow Track," Businessweek Online, September 4, 2000, <www.businessweek.com:/2000/00 36/b3697159...

...2 3 Just as Venevisi6n developed as part of an industrial conglomerate, RCTV is owned by the familyrun industrial group Phelps, which has other horizontally and vertically integrated media and communications companies in addition to several non-media interests...

...Argentina has a population of some 39 million with almost 10 million television homes...

...2 2 Both in its domestic market and internationally, Venevisi6n faces a much more substantial competitor than do Globo or Televisa, in the form of Radio Caracas Television (RCTV...

...corporations operating in Latin America have played a significant role in shaping the development of the media south of the border, it is important to appreciate the domestic dynamics and trends...

...The leading Multi-System Operators (MSOs)-the companies that actually provide the cable services to homes-are Cablevisi6n, which is backed by U.S...

...In addition to its television activities and its participation in the ill-fated DIRECTV venture, Artear publishes Clarin, the newspaper that claims to have the largest circulation in the Spanishspeaking world...

...Coral has become a major distributor of programming, with its number of hours sold annually in the same league as that of Televisa and Globo...

...As of 2000, Venevisi6n had 35% of the average national audience compared to 31% held by RCTV...

...Whatever the outcome, it is clear that the advent of DTH in Latin America has been characterized by hemisphere-wide alliances of U.S.-based global corporations with key regional players in which the global players call the shots...

...Two final points help illustrate the exceptional character of the Venezuelan television industry...

...If we take television as the dominant medium and the television trade as a measure of the strength of media companies in Latin America, the first fact that emerges is that a strong television trade is concentrated in just a few countries...

...Since 1999, U.S.-based investment bankers Goldman Sachs have owned 18% of Grupo Clarin...

...Besides being allowed to maintain its profitably-structured modes of integration, Televisa faced only nominal competition in the domestic market, which came from state-owned networks from 1972 until 1993.11 However, privatization ended this golden age...

...While Abril was the first to enter the subscription television market, Globo soon caught up and also achieved pre-eminence in this field...

...1 8 The other leading free-to-air network is Artear, owned by Grupo Clarin...

...4 This kind of duopolistic market, where companies are controlled by patriarchal dynasties, is typical of the media structure in much of Latin America...

...1 3 Nevertheless, despite this competition both at home and in the United States, Televisa's dominance has not yet been undermined...

...1 In each of the major national markets, there is one historically dominant corporation: In Brazil it is Organizaq6es Globo and in Mexico, Grupo Televisa...

...Corp reinforces its commitment to Sky Brazil through capital increase agreement," Sky Brazil News Press Release, Sdo Paulo, October 18, 2003...

...1 2 A duopolistic environment now prevails in which Televisa, lacking political patronage after the PRI's landmark defeat in the presidential election of 2000, is dealing with a serious competitor...

...That is, they have been allowed to integrate production and distribution, thus enjoying the cost advantages of producing most of what they broadcast...

...TV Azteca initially increased its audience share, but has been unable to expand significantly beyond those early gains...

...Televisa's glory days in the 1970s and 1980s came not only from a horizontally and vertically integrated business model, but also due to the particular political context in which it operated...

...While it benefits from the low cost of program production available in Caracas, CGC's distribution activities outside of Venezuela are so extensive that it has established the international headquarters of Venevisi6n in Miami...