ABTA Opens with Call for Continued Investment in Brazilian Pay TV

SÃO PAULO: The 2015 edition of ABTA Expo & Conference opened yesterday with a call by the president of the Brazilian national film agency ANCINE, Manoel Rangel, for continuing investment in Brazil's pay-TV sector.

Even though Brazil’s pay-TV landscape is currently showing the first signs of growth deceleration, “it doesn’t mean backtracking and it doesn’t call into question the ‘Chinese break-neck speed of growth’ we experienced in the past years,” Rangel said.

He added that in times of uncertainty, industry leaders tend to become cautious and react by delaying investment plans. He questioned that approach and said that Brazil’s pay-TV sector still needs massive investments in infrastructure to be able to reach portions of the population that still don’t have access to pay TV.

With 20 million TV subscribers, a substantial share of the broadband and telephony markets, and a central role in the Brazilian audiovisual content industry, the pay-TV sector has shown the way to growth and innovation in a competitive environment. “During previous economic challenges the sector was able to respond boldly, and that response created today’s industry strength,” Rangel noted.

He believes that all sectors of the economy face challenges in 2015 but, with the right policies and regulatory framework, operators and programmers enjoy the conditions to respond by expanding their service offerings when economic growth resumes. “Those who adopt excessive caution now will risk losing the opportunity of positioning themselves to grow stronger when the moment is right.”

ANCINE’s president finished his opening remarks by saying that the added value of the Brazilian audiovisual industry was 0.46 percent in 2011, and 0.52 percent today. “Our industry is larger than the pharmaceutical industry, the editorial industry, and the tourism industry…. We should believe in its strength and its capacity to generate wealth.”

João Batista de Rezende, the president of the national telecommunications agency ANATEL, believes that these trials are positive and show that the market is innovative and able to advance technology. He said that one of ANATEL’s goals is to advance the quality of discussions and that companies should compartmentalize their offerings so more citizens can enjoy their services. “There are challenges, but they can be overcome,” Rezende said. “We can imagine a Brazil with 70 percent pay-TV penetration as there are many potential users wanting to try its services.”

The executive secretary of the Ministry of Communications, Luiz Azevedo, highlighted two main efforts of the ministry: finding a balance in regards to OTTs and fighting piracy. He believes that the best solution will come from a dialogue between sector reps, stakeholders and government agencies. He acknowledged the audience’s reaction to the idea of creating new regulation, but he explained that he believes in a new global set of rules, instead of small fixes in the current ones.

During a panel on the challenges of regulation in the non-linear world, Laura Sboarina, a senior analyst at Cullen International, compared policy options that are currently being discussed in Europe. “The Netherlands, for instance, believe that it is true that non-linear clients have more control of content, but frequently have no control of advertisement. France and England, on the other hand, are taking graduated approaches with a general obligation to comply with EU rules, such as prioritizing EU works.”

In regards to what are the trends for competitive symmetry relations of the regulatory point of view between pay-TV and broadband services on its traditional platforms and new on-demand models, Carlos Baigorri, the superintendent of competition at ANATEL, said that, in his view, the national telecommunications agency should wait to analyze problems that are going to emerge and then create rules that would better solve them. “First it was WhatsApp, then Netflix, now Uber… We are resolving problems on a case-to-case basis until we are able to identify what’s recurring and then create a general regulation.”

Ana Luiza Valadares, attorney at the law firm BFA, agrees that new business models are still being developed and that services are being adapted to Brazilian realities such as broadband challenges and access to classes C, D and E. “We understand the legal uncertainty and the demand of having well defined tributary rules. ANATEL is already fulfilling its role.”