Chabelo was ten for nearly half a century. Behind that character, an adult child who was around two meters tall, was Xavier Lopez Rodriguez, a 80 year old man, the creator and host of the world’s oldest children’s television show. His program, Family with Chabelo , accompanied for 48 years at least three generations of Mexicans seeking in this space Sunday a haven of black humor.
Last December 20, tearfully without ever losing the characteristics of his character, Lopez Rodriguez said goodbye to air its loyal audience. Televisa decided, almost without warning, terminate your program. The news surprised the viewers and media analysts. A drastic decision whose origin seems to be in the deepest restructuring of the television since Emilio Azcarraga Jean took over after his father’s death
The decrease in advertising sales nearly 10%. – and an unprecedented drop in ratings in the segments of entertainment, sports, soap operas and contests, is wreaking havoc in the business of television. The value of Televisa in Mexico Stock Exchange fell more than 30% from June 2015 to date. Tv Azteca situation is similar. Salinas Pliego television station last year had losses of more than US $ 150 million.
Radio Centro, winner of a tender for one of the two new digital broadcast TV channels, a months-the result just structural reform of the telecommunications, failed to meet the requirements and had to pay a fine of nearly US $ 30 million. Many believe that in the new scenario the company preferred not to risk it.
The time blockbusters arriving anywhere in the world seems to come to an end. Despite the undeniable relationship between Televisa and the PRI government of Peña Nieto, the television business open is no longer what it was and explanation to this crisis does not have a local source.
The model business changed and the situation seems to be repeated throughout Latin America, under the same equation that explains Jorge Fernando Negrete, CEO of Mediatelecom Group and director for Latin America of Mediatelecom Policy & amp; Law. “The more coverage of broadband internet, the more they will lower the ratings”
Other players
“The business as we knew it is changing at a rapid pace,” Negrete said. “This had happened to us with the alleged crisis of the music industry, it was not a crisis, it was the evolution of the business model.”
The open television represented for Televisa few years ago over 80% of its sales. Today represents only 37.8%. Televisa has focused on its pay-TV business, a smart move, but not enough for the speed of change.
The “Entertainment and Media Outlook 2015-2019 Mexico” study, Pricewaterhouse said besides traditional systems PayTV, “new technologies such as digital terrestrial television (DTT) and web TV, among others, are gaining strength.” According to a report from Cisco, 70% of network traffic are audiovisual content.
“In this new scenario, technology, telecommunication and information reveal the inefficiency of the value chain of a business model. Detect what does not work and only what serves the user, “says Negrete.
Services over-the-top content (OTT), as Netflix offers, by example, have become an unforeseen competition and have an exponential growth worldwide. “We are facing a paradigm shift for the next decade,” says Jorge Alvarez Hoth, former vice president of Televisa pay TV, and former director of Sky and Cablevision. “Companies like Netflix Televisa exceeded without noticing this.”
Mexico is one of Latin American countries with less access to broadband. “When we get to 90% penetration of broadband, the ratings are going to go to the floor,” says Negrete. In addition, access to the Internet, but has grown at a considerable speed, is still low. Less than 50%
Alvarez Hoth transformation begin to also affect pay television, where Televisa generates increased profitability of your business and where it has 62% of the domestic market. “It will also do away with that business model.”
The equation says that higher bandwidth, lower ratings, seems to hold across the region. Broadcast television has suffered the same fate in Chile, Brazil, Peru and Argentina, and in general in all countries where broadband coverage has increased.
Moving the pieces
the immediate response to declining advertising sales Televisa and in a scenario of devaluation of the Mexican peso gave José Cane, president of television and content Grupo Televisa, a few days after reports of financial statements for the third quarter of 2015. announced a 40% increase in advertising rates. Advertisers did not accept and after tough negotiations rose less than 10%.
For Ramiro Tovar, media specialist and associate professor at the Department of Economics at the Autonomous Technological Institute of Mexico (ITAM) teacher, is a decision that surely points to fix short-term financial consequences, but it could not be a long-term decision.
both Televisa and TV Azteca realized late that the scenario for television changed, and both are determined to transform. The company Ricardo Salinas Pliego was first adopted drastic changes. Before the arrival of his son, Benjamin Salinas, director of the television station, the company cut staff, stopped producing soap operas and entertainment programs, and cut exclusive contracts with drivers who had spent years with the group, as Fernando del Solar or Lolita Cortés.
So did Televisa. According to employees of the television station, layoffs have increased in recent days, so in the halls growing fear, and stars this time not appear to be essential.
“It’s the end of the star system Mexican “says Jorge Fernando Negrete. “Time of the exorbitant salaries and large exclusive contracts is over. Television has to become more efficient and spend solvency financial efficiency and multiplatform “.
This change also and according to several analysts, have to take into account the age strata more than economic. . “The bottom audience age 40, which is more profitable advertising, has totally different habits,” explains Ramiro Tovar, the ITAM
But the most important change has to be content, says Tovar: “broadcasters have to change paradigm as to what is and what content broadcast TV channels must exist”.
traditional soap operas seem to be coming to an end. The format to follow in Televisa, according to information from a producer will be the miniseries of 13 chapters via streaming .
The two companies were slow, but they know they have to transform. So far this year eliminated a huge amount of internal bureaucracy to create areas with the aim of designing and selling programs, thinking that the future is in the platform. In its business plan 2016 Televisa says: “We offer content for different screens, making us the perfect partner for the implementation of multiplatform campaigns that communicate through their highly emotional content”
The road is long. events and rumors seem to confirm a transformation that so far is starting. According to information of the magazine Proceso, Joaquín López-Dóriga, perhaps the most visible reporter for Televisa, will leave the station in the coming weeks. Broadcasters seem to have realized that if not transformed may disappear. “Plans broadband coverage over the next ten years in Mexico and throughout Latin America are very aggressive,” says Jorge Fernando Negrete, director for Latin America of Mediatelecom Policy & amp; Law. “Changing habits is imminent and much remains. You have to see how fit this change television stations. ”
Chile and Argentina do not escape the crisis
the Chilean channels that have reduced losses are betting on the platform. In Argentina the main victims are the national shows.
The Chilean television also lives difficult times with the low rating and the drop in sales from advertising. Loss of open TV channels increased from US $ 31.7 million in September 2014 to US $ 35.5 million in the same period of 2015. The most affected was the state television TVN whose losses totaled nearly US $ 25 8 million. From the middle of last year, TVN prompted a restructuring plan to reduce costs which resulted in the dismissal of more than 90 workers and a voluntary retirement program for employees with more than 30 years with the company. TV Network, the holding Albavisión, closed its press department due to poor performance.
The situation TVN is compounded when you consider what he told reporters Marcelo Diaz , government spokesman: the law prevents TVN receives contributions from the owner (the State of Chile), as in the private channels. He is even unable to substantiate their claims in the financial sector.
Channel 13, the Luksic Group, meanwhile, although it had negative results (US $ 5 million), these are mainly reduced business that escape open TV: your bet on line . And Mega, whose owners are Bethia -the same group of Falabella, who leads the rating and was made ready in profit, something similar happens. As the company spread, “has seen the website of the Chilean television, mega.cl, which has added a new business window”. Channel 13 has also opted for the platform. In its quest to diversify its revenue has also increased its offer through their signals payment and segment radios.
The former director of Chilevisión, Jaime de Aguirre, who was fired in 2015 told The Clinic Chile changed, “you live better than 20 years ago and television is no longer the only place where entertainment and information flows. of open TV doubled and there is a degree of complacency “.
For Roberto Trejo, Master in Communication and Audiovisual Industries, UNIA-Spain, global changes in the habits of audiovisual consumption have produced exhaustion the historical model of the past 50 years. “Now works with an operator that emits various signals, with schedules for different audiences, developed by external producers, and multiple sources of funding.”
The open signal TV in Argentina is also in deep crisis. “The national fiction-a traditionally strong in TV openly product has been reduced in quantity and quality in recent years international force charged ‘cans’ Brazilian, Colombian and Turkish, which ended up being cheaper and much more efficient in terms audience, “says José Crettaz, professor of” economic Structure Entertainment Industry “and” Entertainment Companies “in Argentina University of the Company (UADE).
in addition, in an economic context high inflation and economic slowdown, rates on broadcast TV advertising failed to keep pace with rising prices, which ended up reducing real incomes of enterprises. “A very strong state investment in government advertising and audiovisual production ended distorting the market since 2010, and now, with the change of government a rapid withdrawal of these resources is drying up the market.”
Also the significant penetration (80%) of the cable TV and the strong growth of OTT services with Netflix to the head (with between 700,000 and one million active accounts), but with strong local suppliers competing in films (particularly Qubit TV ) have affected the performance of broadcast TV.
* with the collaboration of Rodrigo Lara in Buenos Aires and Santiago Bravo Ximena.
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