ABTA Wraps with Panel on Consumer Value in Pay TV

SÃO PAULO: The ABTA Expo & Conference 2016 wrapped with a well-attended session about how pay-TV platforms can maintain their subscriber bases in trying economic times by focusing on the value of digital services to consumers.

The session started with a presentation by Maurício de Almeida Prado, partner and executive director at the research and consultancy firm Plano CDE. His team studied why Brazilian socio-economic classes CD kept their pay-TV subscriptions during the recent economic turmoil. (Brazil’s pay-TV subscription base fell by about 2 percent last year, which is considered low compared to the 3.8 percent drop in the GDP in the same period.)

Prado discovered that most middle-class families, predominantly based in smaller cities, are unhappy with the lack of cultural options, parks and recreation centers in their neighborhoods. They are also concerned with outside violence and expenses related to transportation, food and tickets. So, in general, they consider pay TV a good alternative for entertainment. “Many parents, for instance, said that they prefer having their children and their children’s friends watching quality content they can control in the security of their homes.” Prado showed clips of interviewees, including a young man who used to go to sports events and was robbed. “Now he invites his friends over and follows his favorite team on sports channels.”

Another advantage of pay TV mentioned by the interviewees was the exposure to different cultures, countries, gastronomy and movies—things viewers would not otherwise have access to. Prado made a connection to social theorist Pierre Bourdieu, who coined the concept of cultural capital—the collection of symbolic elements such as tastes, posture, clothing, mannerisms, material belongings, etc. that one acquires through being part of a particular social class.

According to Bourdieu, sharing similar forms of cultural capital with others—the same taste in movies, music and gastronomy, for example—creates a sense of collective identity and group position, “people like us,” and that cultural capital can be a major source of social inequality. “Pay TV helps equalize that cultural capital and can help one’s social mobility, especially in the labor market,” Prado explained. “A trainee who can talk about culture with his/her boss has a better chance for promotion than the one who was never exposed to it. Pay TV represents a window to the world. It informs, empowers, inspires and transforms.”

Alberto Pecegueiro, CEO at Globosat, recalled that industry executives used to refer to the arrival of classes CD as the “barbarian invasion.” According to him, “Pay TV is clearly beneficial to these classes, but it is relevant to highlight how this is a two-way street.”

“As we kept [monitoring] the changes they triggered in the subscriber base profile, we were almost forced to change some of our channels’ orientation to be able to talk to them. It was not a trivial exercise,” Pecegueiro said, adding that programming for classes AB was “very comfortable.”

Free TV was for the masses and pay TV for classes AB. “When [CD] arrived at the volume in which they came, we had to understand their expectations and react consciously that we needed to attend to them without losing sight of the appeal to classes AB. At Globosat we have seen the efforts of operators as well as the association of pay TV and free TV—a powerful combination, the appeal of free TV and the deepening of pay TV.”

Asked about changes in consumption habits especially related to younger audiences, Pecegueiro said that every time he thinks about young subscribers he remembers two quotes: “The problem of the youth is that we are not part of it,” by cartoonist Millôr Fernandes, and playwright Nelson Rodrigues’ recommendation to young people, “Grow old fast.”

Pecegueiro said, “The issue with the young complaining about bundle limitations, the speed in which products change, freedom…it is very fun to want what you want, when you want it, the way you want it, but who pays this bill?” Pecegueiro added that “the elephant in the room, already mentioned in other conferences, is that Netflix is a giant with a rat’s margin.”

“I’m not sure if, deep inside, the propensity to respond to consumer demands at any price doesn’t actually take away its value,” Pecegueiro continued. “We have to gauge this belief spread by marketing gurus—[that companies must] put consumers first—with business reasonability.” He added that pay-TV companies have adapted adequately. “We are all looking at the same direction, offering TV Everywhere packages, placing more of our content on demand. [But] there needs to be a business model behind it. To pursue it inconsequently is the best way to nowhere. Let’s see how this business will find its balance.”

ABTA Expo & Conference 2017 will take place between June 28 and 30.