Although Latin American media are distinctively “Latin” in their contents, exemplified by the characteristic telenovela, they are very North “American” in their structure. Yet, while at certain stages the U.S. government and various U.S. 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. Latin American media are unapologetically commercial in their purpose and organization. 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. counterparts. 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. 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.
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. 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.” Colombia, Chile and Peru are much further behind, while the rest of the nations in the region are “net importers.”
In each of the major national markets, there is one historically dominant corporation: In Brazil it is Organizações Globo and in Mexico, Grupo Televisa. The two corporations share notable similarities in their development. Each commenced in their respective market at an early strategic stage and formed a mutually supportive relationship with the government of the day. Both have perpetuated themselves through a dynastic and patriarchal system of family control. Globo and Televisa have grown to become vertically integrated conglomerates. That is, they have been allowed to integrate production and distribution, thus enjoying the cost advantages of producing most of what they broadcast. As a result, they can export programs that have already paid for themselves in the home market. 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. 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.
Globo’s charge to international prominence dates back to the early 1960s, when newspaper magnate Roberto Marinho launched the 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. 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. 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.
Globo has faced stronger competition in the realm of subscription television, or pay-TV. Here it competes with Brazil’s other major media conglomerate, Grupo Abril, the largest publishing operation in Latin America, controlling 67% of the nation’s print media. Abril’s founder, Victor Civita, built up the company by publishing Disney comics and the leading newsmagazine, Veja. His son Roberto now commands Abril, just as control of Globo has passed to the three sons of the late Marinho. While Abril was the first to enter the subscription television market, Globo soon caught up and also achieved pre-eminence in this field. Globo, however, does not possess as decisive a lead over the competition as it enjoys in broadcast television. This kind of duopolistic market, where companies are controlled by patriarchal dynasties, is typical of the media structure in much of Latin America.
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. In contrast, Abril partnered with the now bankrupt DIRECTV Latin America, the corresponding division of U.S. DIRECTV. 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. DIRECTV Latin America was launched by Hughes Electronics Corporation together with Grupo Abril, Mexico’s Multivisión and Venezuela’s Cisneros Group of Companies (CGC). By the time DIRECTV Latin America filed for Chapter 11 bankruptcy in March 2003, Abril and Multivisión had left the consortium with Grupo Clarín of Argentina taking their place. 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 merger brings into question whether DIRECTV Latin America will merge with SkyTV as a result. 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.
On the international front, Globo has been particularly successful in Europe with its export efforts, partly due to its good reputation for producing telenovelas. 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. Globo bought a strategic 15% share—the maximum allowed for a foreign investor—of Independent Communication Society (SIC) and helped make it Portugal’s leading network.
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. Yet this makes it susceptible to the kind of crises of currency devaluation to which all the nations of this dependent region are prone. 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. The prospect has also been raised that Globo might shore 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. Ironically, leftist President Luiz Inácio Lula da Silva appears to have saved Globo from the immediate crisis of 2002 by stabilizing the Real after he took office. 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. 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.
As in Brazil, the development of the most powerful media corporation in Mexico was a family business. Televisa’s dominance was achieved by the entrepreneurship of three generations of men from the Azcárraga family. Since 1997, Emilio Azcárraga Jean has led the company, guiding Televisa through its financial crisis of the late 1990s. For decades, Televisa was a media conglomerate that enjoyed a quasi-monopolistic position in the Mexican television market. 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. 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). For their part, as self-declared 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. 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.
However, privatization ended this golden age. The state sold its networks to an electronic goods retailer who launched them as TV Azteca in 1993. TV Azteca initially increased its audience share, but has been unable to expand significantly beyond those early gains. 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. 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.
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. Yet, outside of Mexico, Televisa operates with much less protection and more regulation than at home. For 25 years, the U.S. 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. As a result, Televisa was forced to cut back to a minority share in Univision. 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. network [See “…Latino Media,”this issue].  Nevertheless, despite this competition both at home and in the United States, Televisa’s dominance has not yet been undermined.
Argentina and Venezuela, with much smaller markets than Mexico or Brazil, form the next tier in the region’s media hierarchy. Argentina has a population of some 39 million with almost 10 million television homes. More than half of these homes are cabled, while satellite linked homes number less than half a million.15 When commercial television began in Argentina in the late 1950s, the three private channels were prohibited from forming networks. Consequently, Argentina stands in sharp contrast to the other major national industries under consideration, which were built on dominant national broadcasting networks.
The historical absence of networks and the relatively recent deregulation has given a special prominence to cable, and more recently, to satellite-to-cable and DTH modes of distribution. Argentina has nearly half the cabled homes in Latin America and more than twice as many as either Brazil or Mexico. The wave of pro-market 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.
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. The leading Multi-System Operators (MSOs)—the companies that actually provide the cable services to homes—are Cablevisión, which is backed by U.S. investors Liberty Media and Hicks, Muse, Tate & Furst; and Multicanal, which is owned by Argentine media conglomerate Grupo Clarín. There is foreign interest in free-to-air or basic broadcast television as well. Telefe, one of the two leading broadcasters, is fully owned by the Spanish telecommunications corporation Telefónica. Telefónica 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. In addition to Argentina, Endemol has joint ventures with Televisa in Mexico and Globo in Brazil.
The other leading free-to-air network is Artear, owned by Grupo Clarín. Like Televisa and Globo, Clarín is a public company under the control of a single family with interests across a wide range of media industries. In addition to its television activities and its participation in the ill-fated DIRECTV venture, Artear publishes Clarín, the newspaper that claims to have the largest circulation in the Spanish-speaking world. Since 1999, U.S.-based investment bankers Goldman Sachs have owned 18% of Grupo Clarín.
Despite the predominance of foreign programming on cable, Argentine audiences, like domestic audiences throughout the region, maintain a strong preference for local programs. 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. 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.
With a population of some 24 million, Venezuela has by far the smallest market of the region’s leading television nations. 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. This duopoly compares to Globo and Abril in Brazil, Televisa and Azteca in Mexico, and to a more limited extent, Clarín and Telefónica in Argentina.
Venezuela’s pre-eminent network, Venevisión, was founded in 1960 by Cuban-born Diego Cisneros and kick-started with an initial investment from the U.S. network, ABC. Under Cisneros, Venevisión 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 Organizações Globo, Grupo Televisa and Grupo Clarín, the Cisneros Group of Companies (CGC) is a conglomerate in which media are integrated both vertically and horizontally. CGC also fits the pattern of patriarchal, dynastic control and continuity similar to the history and structure of Globo and Televisa.
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. 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. 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 Venevisión in Miami. It participates with Televisa in Univision—the leading Spanish-language network in the United States—which is a strategic outlet for its store of programs. Venevisión International has also begun to produce Spanish-language programs in the United States that target Latino audiences.
In South America, Cisneros has been the major figure in pushing the expansion of the now bankrupt Galaxy/DIRECTV DTH venture. In new media, he has partnered with AOL Time Warner in the venture AOL Latin America, which is trying to catch up with Telefónica’s Terra Networks and other Internet Service Providers active in the region.
Both in its domestic market and internationally, Venevisión faces a much more substantial competitor than do Globo or Televisa, in the form of Radio Caracas Television (RCTV). As of 2000, Venevisión had 35% of the average national audience compared to 31% held by RCTV. Just as Venevisión developed as part of an industrial conglomerate, RCTV is owned by the family-run industrial group Phelps, which has other horizontally and vertically integrated media and communications companies in addition to several non-media interests. 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. Like Venevisión International, Coral is based in Miami, “the Hollywood of Latin America.” RCTV offers strong competition to Venevisión in both the domestic market and in the arena of programming exports. 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.
Two final points help illustrate the exceptional character of the Venezuelan television industry. 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. And unlike Argentina, in Venezuela there has been a notable absence of foreign ownership.
Even 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. 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. They still remain under dynastic control, even though public share ownership is a necessary requirement to raise capital for new media ventures. 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. 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. 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.
What has changed is the degree of internationalization experienced by media in the region. 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. There is also the growth in the number of U.S.-based cable channels providing special Spanish and Portuguese-language services, such as HBO Olé, MTV Latino, CNN en Español and Fox Latin America. From Spain, there is Telefónica’s influence in the telecommunications and media sectors of Argentina and other Southern Cone countries in particular. 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.
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. 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. 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.
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. 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. 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. 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.
ABOUT THE AUTHOR
John Sinclair is a professor at the School of Communication, Culture and Languages at Victoria University of Technology, Melbourne, Australia. His published work includes Latin American Television: A Global View, and New Patterns in Global Television: Peripheral Vision.
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