Carlos Henrique Schroder

This interview originally appeared in the MIPCOM 2013 issue of World Screen.

When you think of Brazil, you think of soccer, samba…and Globo. That’s because Organizações Globo is Brazil’s media behemoth. Owned by the Marinho family, it comprises a TV network, terrestrial stations, radio stations, cable channels, newspapers and more.

TV Globo, the terrestrial television arm of the company, is one of the largest broadcasters in the world. It produces 2,500 hours of entertainment each year, along with 3,000 hours of news. Its 122 stations reach 99.5 percent of the population.

Audience erosion? Not in Brazil. At least not yet. Despite the exponential growth of cable subscriptions during the past few years, fueled by a massive jump in consumer spending by a rapidly growing middle class—and despite the recent entry of Netflix into the market—nothing seems to undermine the loyalty Brazilians have for Globo. Its novelas are still able to attract more than 60 percent of the country’s audience in prime time.

With more than 90 percent of its productions done in-house, in the huge studios at Projac on the outskirts of Rio de Janeiro, Globo is a major source of employment for artists, writers, journalists, producers and others. Globo is known for the quality of its productions and has received International Emmy awards for its news and entertainment programs.

Carlos Henrique Schroder has been at Globo since 1984. This past January, after a number of years heading up news and sports, he was promoted to CEO of Globo. He talks to World Screen about his transition into the top position at the company and the challenges for the next couple of years as Brazil prepares to host the FIFA World Cup in 2014 and the 2016 Summer Olympics.

WS: How has Octávio Florisbal, the former CEO, helped you in this transition process?
SCHRODER: The transition was a gradual and worry-free process, as it must be for a company the size of TV Globo. Octávio Florisbal was at the helm of the company for the past ten years, and we all learned enormously from him, far beyond the impressive results he generated. It’s a huge legacy, with impact on our programming, on the way we relate to each other, on the way we value talent, and also on the business. In addition, he was always kind, which helped me as I prepared to assume my new responsibilities. The company is mature, strong and robust. Now it’s time to look at the new challenges on the horizon, some in the near future, such as the great events that Brazil will host—the FIFA World Cup and the Olympic Games—and the commemoration of the 50th anniversary of Globo, which will take place in 2015.

WS: What genres constitute the greatest strengths in Globo’s schedule?
SCHRODER: News, sports and entertainment. We have a strong schedule, based on these three pillars, which is frequently renewed with new shows that constantly bring boldness, freshness and innovation. We just finished airing Brazil Avenue, one of the greatest hits on Brazilian television, and we are already airing another great success, Amor à Vida, a novela that gets a 61-percent share, an enviable number on any part of the planet.

News is also very strong, especially during these times when Brazilians have gathered in the streets to protest. In Brazil, 80 percent of the population receives the news through television. We produce six hours each day for our 11 newscasts and news-related shows, seven of which air nationally.

In sports, the menu is enormous, and it represents 11 percent of our programming output. We showcase soccer—the Brazilian national championship, the state championships, the Brazilian Cup, the Libertadores of America, the South American Cup, European Champions League, and the matches of the Brazilian national soccer team—as well as Formula 1, Stock Car, UFC, volleyball, cycling, marathons, artistic gymnastics, basketball, futsal, beach soccer and extreme sports. We had excellent ratings with the Confederations Cup this past June and we are getting ready for the World Cup in 2014 and the Olympics in 2016. All of this is done with passion and technology, a combination that makes Globo a ratings champion.

WS: How has the strength of the Brazilian economy, and the growing middle class, impacted the advertising market in the country?
SCHRODER: The advertising market grew 6 percent in 2012. For Globo, last year was positive not just in terms of ratings but also in terms of our financial performance. Broadcast TV received most of the money spent on advertising—nearly 65 percent of the total media pie. This demonstrates our proven ability to deliver results to advertisers, both locally and nationally, and irrespective of the size of their investment.

Without a doubt, the strengthening of the Brazilian economy is overwhelmingly positive. The growth and sophistication of the buying habits of the middle class impacts various sectors, which consequently affect the advertising market. Broadcast television naturally benefits from this, as the sector of mass-market consumer products is responsible for 70 percent of the advertising pie.

WS: Is online viewership growing in Brazil?
SCHRODER: In Brazil, broadcast TV is a massive phenomenon, and the habit of watching Globo and discussing its programs at home with the family, at work and with friends, is widespread. Our content has been part of the national conversation for a long time. The Internet and social media increased this “water-cooler” effect, making the sharing of information, opinion and expression that have always circulated even more dynamic. We are aware of those developments. We recently created a directorate for digital media to work on the distribution of our content on all digital platforms.

Our content is already available on the Internet, on news portals (G1), sports portals (Globoesporte.com) and entertainment, and these sites are market leaders in their segments. We still have some difficulties with infrastructure, as broadband is still not available to everyone in Brazil but, despite this, we have been working to offer our content on phones and tablets.

WS: How is Globo satisfying this demand for online and mobile programming?
SCHRODER: We are working to be closer to the viewer, wherever he is, and whichever way he wishes. The arrival of digital television increased television viewing outside the household. Our content is now watched on smartphones and tablets. Our programs are also watched every month by more than 60 million passengers in buses, trains, airplanes and subway trains. In addition, we have the Globo TV app, which improved the experience of consuming our programming on mobile devices, offering free and pay options.

Last year we had our first experience with VOD, with Globo TV+, which, along with the programs on our linear channel offers archival materials and historic moments in Brazilian soccer. We’re also working on several second-screen projects.

WS: Do you consider Netflix a friend or foe?
SCHRODER: We believe that the exploitation of our content, be it on the web or on pay TV, should be done by us. Our view is to have our own distribution system. Globo TV+ allows viewers to watch all content from TV Globo’s entire broadcast day with a three-hour delay. We are testing a system to distribute this content so that viewers that miss the regularly scheduled programs can watch them at another time. So we know that we have the ability to deliver this product with our own content and with our own delivery system.

WS: Cable is growing very fast now in Brazil. As a consequence, do you see erosion in free-TV viewership?
SCHRODER: No. From the last numbers I have from June, we now have 17 million pay-TV subscribers in Brazil. The average is three people per household. So we are talking about 50 million people with access to cable. But when you look at this audience, you notice that it is very fragmented, very diluted. So much so that the leading cable channel has a 0.4 share of the total audience. We are monitoring this evolution. We understand cable is the greatest source of erosion for terrestrial broadcasters, and we need to have programming that is increasingly competitive to cable. We’re analyzing and tracking these developments and our strategy is to create programming that is daring, especially during the night, when pay TV is stronger. 

WS: How has terrestrial TV in Brazil, unlike other regions of the world, been able to keep its audience share from decreasing?
SCHRODER: In the U.S., there are 100 million cable subscribers, so there is no significant distinction between people that subscribe to pay TV and people watching free-to-air TV. In Brazil, with 17 million subscribers, pay TV reaches only 29 percent of the population. So there is a lot of room for growth in the pay-TV sector. For it to grow further it will depend on the economy. In the U.S., TV is very inexpensive and you can have pay TV for just $30 a month. In Brazil, only if economic conditions are strong and if there is growth in consumption will this model work. During the month of May, with the drop in consumer spending in Brazil, we had for the first time in years a reduction in pay-TV subscriptions. Why? Because the moment that there is a tightening in the economy, pay TV is still considered superfluous. More economic growth equals more pay TV growth.

Pay TV also helps in the transmission of the signal, especially with high definition. It’s a different quality of transmission. There are people living in certain geographic areas who are not able to receive good quality over-the-air TV, so pay TV is very helpful. But 60 percent of what they watch on pay TV is terrestrial channels. So they continue watching free TV in a pay-TV environment.

WS: How is Globo preparing for the World Cup and the Olympics? How important will these events be for Globo and for Brazil in general?
SCHRODER: We’re talking about gigantic global events, for which we are preparing ourselves with great care. We’ve made large investments for the Confederations Cup and were very satisfied with the results, not only from a technical standpoint but also in terms of viewership. It was our most comprehensive coverage of this event, with 500 people, including journalists commentators and technicians, and, among other innovations, we introduced for the first time on Brazilian TV two 4K cameras with a definition that is four times greater than HD. The image quality of these cameras is extremely sharp, especially for close ups, which helped the commentators when evaluating questionable calls. During the games in which the Brazilian team played, we exhibited “Cup Central,” a sports program showcasing innovations such as holographic projections of miniature virtual players, which helped the commentators analyze and explain the plays, and helped the viewer understand the tactical maneuvers from each team. We also had a “Virtual Field,” where the commentator discussed specific plays from a virtual soccer field. All 23 players from the Brazilian team could appear life sized, since they had been scanned and mapped by the art department at Globo. We want to improve these technologies for the World Cup, and, of course, bring more innovations so that the viewers can have a unique experience. We’re also making investments in digital technology. Our objective is to reach 70 percent of digital coverage by the time the World Cup starts. And for 2016 and 2017, the objective is to reach 90 percent.

WS: Tell us about the company’s international division and the sales of your programming around the world.
SCHRODER: Drama is our main product. In the 40 years since Globo launched its international division, we have sold more than 130 programs to more than 170 countries. Brazil Avenue is a recent example of how Brazilian novelas are well received around the world. One of the greatest success stories in Globo’s prime time, Brazil Avenue has been in the international market for just six months, and is the best-selling show ever in Globo’s history. It was licensed to 106 countries in 14 languages, such as Spanish, English, Russian, Greek, Polish and French. Just in Africa, 57 countries have acquired the rights to Brazil Avenue. In addition to the sale of novelas, we have partnerships with international broadcasters for the co-production of new shows based on Brazilian scripts, such as The Clone, which we produced with Telemundo in 2009; Between Love and Desire, created with Azteca also in 2009; and, produced with SIC, Dancin Days and Blood Ties, which was awarded the International Emmy for Best Telenovela in 2011.

This June we just launched the co-production My Dear Handyman in the United States, another partnership with Telemundo. It’s the Hispanic version of our novela Looks and Essence.

Globo also has linear channels that are transmitted by pay-TV operators and content distributors around the world. We license sporting events, such as Brazilian soccer, which is very popular around the world. Our international channel, also named Globo, is targeted to Brazilians and communities of Portuguese speakers living abroad, which is transmitted by 116 countries. In addition, we have two Globo channels in Portugal—one is offered as a basic service and focuses on dramas, and the other is offered as a premium service and offers entertainment shows and interviews. All together, the three Globo channels abroad have 2.2 million subscribers and reach 7 million viewers.

WS: Nowadays, Globo has much more competition from countries such as Turkey and Korea, which are also selling novelas around the world. Do you think this will lead to an oversupply of content and a subsequent reduction in prices?
SCHRODER: I cannot guarantee this will happen. It’s true that the entry of new players in the market could cause this to happen. If you have more companies in the market and a greater supply, the tendency is that there will be a reduction in the cost of the product. To counterbalance this, we have been working to increase the number of our clients. We are looking for new markets where, up to now, novelas have not been well received.

On the other hand, when you make a high-quality product, such as Brazil Avenue, you have spectacular sales in more than 100 countries. So when you have this kind of high-quality product, it is much easier to sell. Although there is an attempt from others to enter the business, Globo has a long history in the telenovela market. While others from Turkey, India or China attempt to establish themselves in this business, we have a solid and well-established brand.

WS: What are your plans for international growth?
SCHRODER: We continue to bet, with our current partners, on co-productions. The international market continues to be very promising, especially for novelas. Regardless of programming trends, viewers like to be moved by a great story, and our productions are full of great stories!

We’ve also been active in the distribution of news and sports content. We’ve recently launched NewSource Globo, a news agency that offers content and services to international broadcasters. In partnership with the Associated Press, the agency was launched during the Confederations Cup, and also supplied news about the demonstrations that occurred in Brazil during the months of June and July. In total, 14 broadcasters in 12 countries utilized our services.

WS: Nowadays, do you see Globo primarily as a broadcaster with a vast programming production output or as a program producer with broadcast stations?
SCHRODER: Globo is a major content producer. About 90 percent of our programming is created by the network in our numerous studios, making us the leading employer of artists, writers, journalists, producers and technicians in the country. Our production facility is constantly expanding and being brought up to date to satisfy demand, with 100 percent digital installations offering HD content. All in all, we produce 2,500 hours of novelas and other programs each year, in addition to more than 3,000 hours of news. We also work with domestic independent producers in search of innovative and varied program ideas. We will continue to invest in our portfolio to increase our production, paying attention to all platforms.

WS: How do you create a program that will appeal to a mass audience that consists of both wealthy, educated individuals as well as viewers from a much lower socio-economic segment of the population?
SCHRODER: This is terrestrial television’s great challenge. In a country as heterogeneous as Brazil, we must have a program schedule that is of interest from “A” to “E” classes. This is the case of our news, which garners audience shares of more than 50 percent every day at 8:30 p.m., and it is also true for a novela. We need to have daring, interesting and attractive shows that talk to Brazilians from all socio-economic classes. This is not the same as lowering standards. We cannot lower the quality at any moment. But there is no point in making a product of very high quality that is unintelligible. A good example was Brazil Avenue, which had absurdly high ratings in both the “A” and the “C” classes. When you are able to unify these classes in a successful product, you have achieved your objective.

WS: Amauri Soares is Globo’s new programming director. What are his responsibilities in the domestic and international markets?
SCHRODER: Amauri is responsible, like all our professionals, for bringing programming that is relevant, that informs, that entertains and contributes to the transformation of Brazilian society. We have a diverse schedule with every genre for every segment of the population. Amauri is helping us with this. He is permanently on the lookout for innovative content which surprises and entertains, from in-house productions and partnerships to good international movies and series.

WS: The Marinho family has a long tradition of hiring professionals to make programming decisions at Globo, which should be a positive strategy for the company in the long run.
SCHRODER: I completely agree. The Marinhos offer a professional environment, giving executives better analytical tools to use in finding solutions. In the world of entertainment, we have professionals who have in-depth understanding of the business, who are capable of making insightful suggestions, which in turn lead to solutions. So I believe that this care and effort in bringing the best professional to oversee each aspect of the business results in creating a company with longevity, and I am certain this is the objective of the Marinho family.