Exclusive Interview: Globosat’s Alberto Pecegueiro

PREMIUM: Alberto Pecegueiro, the CEO of Globosat, Brazil’s leading pay-TV programmer, tells World Screen Newsflash that the booming Brazilian economy, growing middle class and must-have programming are fueling Globosat’s success and Netflix is not a threat to the pay-TV industry.

Globosat is Brazil’s leading pay-TV programmer. Since its launch, in 1991, it had been reaching only the portion of the Brazilian population that could afford the monthly subscription. In recent years, buoyed by the country’s strong economy and increasing middle class, as Pecegueiro explains, Globosat is well positioned for the future.

WS: Is the expanding middle class still contributing to Globosat’s growth in subscribers?
PECEGUEIRO: Yes it is, but the Brazilian economy is connected to the global economy, which means that there will be positive and negative impacts. But in general, the ability to foster solid growth and heat up the internal economy by adding new consumers to most [business] segments has proved to be a great engine for growth. When it comes to pay TV, convergence and the combination of telephony, data and video also play an important role [in spurring demand and growth].

WS: Are you working to offer your content on the Internet and on cell phones?
PECEGUEIRO: Definitely, we are actively working on that. We have an agreement with [the Brazilian cable operator] Net Serviços. We launched muu.com.br, a video portal with our content, which is available for Net Serviços subscribers. Net Serviços authenticates access to the portal where subscribers can watch a huge amount of Globosat content. In parallel, we are supporting Não, Net Serviços’ video-on-demand service, and we are negotiating with Sky and other cable operators. We are already testing high bandwidth access to our linear channels. Just to be clear, our portal muu.com.br doesn’t provide access to linear channels, it offers access to our content on a nonlinear basis. We have a library and we are adding catch-up services for our programming, but not the linear channels. The moment cable operators feel confident enough to offer linear channels, we are ready to do so. This opens up a huge discussion about offering video on the Internet in Brazil and the recent announcement of Netflix and whether they will have a business or not, but we are doing our part.

WS: Given the changes in technology and the growing competition in the market, what challenges will Globosat face in the next few years?
PECEGUEIRO: I believe the challenge will be in maintaining the ability to attract audiences to our channels, to entertain them, to inform them and educate them. The idea is to appeal to them, to be the reason they want to come home, turn on the TV and see what is available to them through our channels.

I believe that at this point in time, television remains unbeatable as a source of entertainment and relaxation. However, I believe there is a big difference between the laid-back attitude of watching TV and the active process of selecting video on the Internet. I don’t think they are the same thing. We are benefitting from the economic growth in Brazil, which means there are thousands and thousands of people, almost millions, coming into the market every year that never had access to our channels. Our mission is to become interesting to these people. We have to take advantage of the opportunity now that we are finally in front of them and fight for their attention. We are making a major effort to do this.

When you talk about changes and challenges in the market, I think they are the same for everyone, even for a company like Netflix, which has done an incredible job in the U.S. market. It seems very strange to me that after simply announcing that they are entering the Latin American market, their stock should go up by 10 percent. This surprises me because I believe the reason for this increase comes from people who don’t know anything about Latin America or the challenges that Netflix will have to face to enter this market. I believe that the reason for the increase in Netflix’s stock price is that American investors currently have very few options where they can place their bets because of the overall state of the American economy. They are behaving as if Netflix were the last great hope because of its stock’s recent performance. Whatever they can say that could contribute to increasing the value of its stock will be received in the market as the voice of God. It doesn’t mean that we don’t recognize that they have a great team or a proven track record, but I believe that even in the American market their challenges will increase. I also think we are far away from defining their recent entrance into Canada as a success. There are bandwidth problems, there are quality problems, there are a number of things going on. Netflix is a good company; they are fighting and I can’t say that they are failing, but each day there is a more complex environment for them as well. They are not the future at this point in time. We are all trying to build our future together.