An old or unique business model?

On 7 June 2014, The Economist published the article “Globo domination: Brazil’s biggest media firm is flourishing with an old-fashioned business model” (The Economist, 2014). In the text, the magazine showed genuine perplexity with the “old-fashioned” business model of the station, one of the largest in the world, and especially with the audience that open TV still manages to have.

When the football World Cup begins on June 12 in Brazil, tens of millions of Brazilians will watch the festivities on TV Globo, the country’s largest broadcast network. But for Globo, it will be just another day of vast audiences. No fewer than 91m people, just under half the population, tune in to it each day: the sort of audience that, in the United States, is to be had only once a year, and only for the one network that has won the rights that year to broadcast American football’s Super Bowl championship game.

(The Economist, 2014)

The article states that the recording studios of TV Globo, with actors and hired crew, resemble the golden age of Hollywood, a symbol of the American film industry. Besides, it is a business based on massive ratings allied with advertising. According to the article, the fact that the teleno- velas last a few months and end without a prequel or sequel is a sign of an old format of television dramaturgy. In his statement to the magazine, Roberto Irineu Marinho, entrepreneur, shareholder and then president of Grupo Globo, says that he monitors the successes and disasters of foreign broadcasters and, for him, the fact that trends and changes in the media take longer to reach Brazil is an advantage. The network’s strategy is not to force the changing habits of the millions of Brazilians who still turn on their television sets in their homes and watch the block of prime time telenovelas and journalism traditionally, but to prepare for possible transformations in the market. Since 2014, the year of the article’s publication, aspects of the Brazilian audiovisual scenario have changed. However, even though digital platforms are currently flourishing - Globoplay, Globo Group’s digital platform, along with them - publicity in open television is still the primary business model for the telenovela.

Another way to see the current moment of popular Brazilian television would be to reflect on whether the model is old or if it is unique, and along with this, to evaluate the strength of the Brazilian telenovela, responsible for this phenomenon of persistence of a mass audience; some of the narrative characteristics of this fonnat, historical and cultural; its transformations and recent narrative extensions.

Brazil has five private television stations and two public stations. Even though millions of Brazilians still watch network television during prime time on a television set, in 2018 the country had 78 OTT (over the top) platforms, which transmitted 139 live channels and offered a repository of 72,000 movies and 12,900 series (Lopes and Gomes, 2019). The term OTT originated during World War I and was the order given to leave the trenches and directly fight the enemy. Currently, it designates internet video services delivered directly to the consumer. Netflix, available in Brazil since 2011, is the most popular service in Brazil, with 18% of the market, followed by Globoplay, available since 2015, with 4%.

According to the Ibero-American Observatory of Television Fiction, Brazil is the eighth largest VoD market globally, but this is the main form of watching fiction for only 8% of the population. It is noteworthy to observe that according to research group Kantar Ibope, even with the cord-cutting phenomena in Brazil, cable had a 20% increase in viewing between April and July during the 2020 pandemic. Open TV’s daily audience has also grown 23% in relation to the same time in 2019 (during the Soccer World Cup, very popular in Brazil). VoD digital platfonns reduced the quality of transmission in Brazil since more people were using the internet during the pandemic and increased the numbers of viewers. Globoplay, the Globo Group digital platform, announced through О Globo, the group’s newspaper, a growth of 128% in May 2020. Netflix announced 2.9 million new subscribers in Latin America in April during the pandemic.

Even with a multiplatform population, it is common for the 9pm telenovela to reach 35 audience points. In 2020, each point is equivalent to 260,558 households and 703,167 viewers in the Painel Nacional de Tel- evisao (National Television Panel; PNT), which estimates the TV audience in 15 of the main markets in Brazil. Therefore, a chapter with 35 points means an average audience of more than 24 million people in these cities. However, this does not mean that new ways of watching this content are not emerging in the country. The 2014 Economist article admits that the predictions about the end of mass ratings of Brazilian open television have been around for two decades without, in fact, materializing. Thus, the changes and transformations that most television networks are going through in Europe and the United States do not necessarily occur the same way in Brazil. Brazilians have not traded one medium for another but added the new platforms to their routine.

Media corporations use social networks to promote products and seek greater exchange and public participation in programming. On the one hand, there is an effort to control the reading of the content or primary texts that are amplified by social tools; on the other hand, there is experimenting and learning of a new market component that directly influences the company’s business model. Catherine Johnson (2019) analyzes the audiovisual industry’s control systems in the transition from native television industries to digital platforms. For Johnson (2019), there are four dimensions of control: technological infrastructure, technological devices, online television services and content for online television. The author studies how technology control can shape our access to services, how controlling services can impact device success and how content control can also impact service success. Brazilian television stations have as challenges technological infrastructure and online services.

TV Globo already shares its production through streaming on its digital platform as well as scenes of every telenovela on the air for catch-up. Tel- enovelas have been in the top ten most-watched content since the beginning of the Globoplay platform, with no adaptation of format or length. Teleno- velas that are on the air have a larger audience than the ones from the collection. This popularity is because being on the air works as a promotion. Nevertheless, the business model of Brazilian telenovelas remains based on advertising. Ricco and Vannucci observe: “Advertising and television have established parallel lines of growth and strong relationship between one and the other” (2017).

On TV Globo, the main commercial product today is the “Telenovela III,” which airs soon after Jornal Nacional, prime time news at around 9:30pm, with an engaged audience of more than 24 million people daily in the 15 main cities. TV Globo offers several opportunities to advertisers interested in exposing brands and products and associating them with the narrative: national commercial; local commercial policy; national line sponsorship; merchandising and brand visualization within the product; and, currently, the extension of these actions into internet content. These actions, within commercial logic, make it possible to produce this content for television and make it profitable. It is necessary to ponder, though, on which way the public understands these advertising interventions and reacts to them, and how the consumption and advertising of the telenovela intertwine in this narrative.

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