ABTA Closes with Cautiously Optimistic Sentiment

SÃO PAULO: One of the main messages participants can take away from the 2015 version of ABTA Expo & Conference is that the current Brazilian political and economic crisis can be tackled with creativity.

Experts in several fields, including operators, defend that so far the crisis did not interfere with their sales or investment plans, but some took more sustainable decisions than others.

When asked what would be the limit of dollar depreciation for the sector’s survival, Net’s financial planning director, Karina Gonçalves, said that "maybe where we are now, beyond this point it becomes challenging." The dollar closed yesterday at $3.56 reais: a variation that broke a 12-year record. Gonçalves explained that Net’s budget for this year considered the dollar at a lower value. "If the dollar surpasses the 30 percent variation barrier, it will become a lot more complicated."

Although the macro scenario outlook for the next 18 months is pessimistic, there is still room for growth, especially in pay TV. According to Oi TV’s residential product director, Ermindo Netto, "when you look at the GDP per capita, [other] countries have TV penetration at around 60 percent, twice what we have, and Argentina, with 80 percent, is even more elastic. Even without generating new value, ​​without growing national wealth, with only the status we have today, there is still plenty of opportunity for TV penetration."

During a panel about churn and customer loyalty, Netto defends rethinking the product addressing the needs of a more demanding consumer. "Offering high definition for the new or the base client is notoriously a strategy for retention and acquisition of new customers."

Operators are generally trying to be more cautious about profiles with propensity to churn because the acquisition cost rose and the payback is long. Algar Telecom’s marketing director, Márcio de Jesus Silva, for example, said that the operator is adopting a "policy of more intense scrutiny" in customer acquisition.

Despite these measures, the evolution of the sector needs to be considered, according to André Guerreiro, Net’s marketing and product manager. He said that "the need for pay TV and internet is a fact, therefore there is no way the business will backtrack.” Brazil is “transitioning through crisis and government, but it will pass. We have been through much worse."

The good news is that, according to the president of the National Cinema Agency (ANCINE), Manoel Rangel, consumption of audiovisual content is the first leisure option in Brazil. New research, to be released by ANCINE shortly, found that 81 percent of the Brazilians interviewed chose watching TV shows at home as their favorite leisure option, and 69 percent watch movies or series.

The research shows that the biggest pay-TV obstacle is price versus income. Rangel said that it was the income distribution increase, in recent years, that fostered growth: 66 percent of the Brazilians interviewed don’t have pay TV and, among these, 51 percent pointed to the price as the biggest impediment.

The study also shows that Brazilians want more of "qualified space channels"—airing movies, series, animation and documentaries—with 49 percent calling for movie channels, 24 percent for sports and 13 percent for news.