Exclusive Interview: TV Globo’s Octavio Florisbal

PREMIUM: TV Globo’s CEO, Octavio Florisbal—who is stepping down from his post as of January 1, 2013, to be replaced by Carlos Henrique Schroder, who has been serving as the director-general of journalism and sports since 2001—talks to World Screen about the strengths of the Brazilian market and the company’s diversified offerings.

WS: Besides product placement and product integration, what options can Globo offer advertisers beyond commercial spots.
FLORISBAL: Over the past 15 years, we have been developing new commercial formats. Today, we have about 40 different formats for marketing and sponsorship, institutional projects, and promotional projects. Product placement here at TV Globo is very well developed. We have a very big team focused on that. When we place products within programs, mainly telenovelas and TV series, we do it carefully, to avoid being too heavy-handed, and it is very well accepted. For example, a 30-second spot on our most popular telenovela, Avenida Brasil (Brazil Avenue), which airs at 9 p.m., gets about 45 rating points. That’s a lot of people. A 30-second spot during that telenovela costs $250,000. Product placement during the same telenovela can cost at least twice as much, $500,000 to $750,000. We place products in our reality shows as well—such as Big Brother and others—and in our celebrity-hosted variety shows. This is also a format that advertisers have been actively seeking. Some people say that the 30-second spot will disappear. I think that it is not likely to happen anywhere in the world because you don’t have other formats to replace the 30-second spot and you will not be able to please all advertisers. Here at Globo, for example, we have a daily relationship with more than 5,000 agencies and more than 50,000 advertisers. If we stopped running 30-second spots, there would not be enough forms of product placement to fulfill them all. To give you an idea, we show about 20 million commercials per year. 

WS: How does Globo manage to reach a huge audience—indeed, a massive audience—while still producing a quality product? I am not only referring to production but to anything of interest to anyone with a higher level of education. How do you manage to strike a balance?
FLORISBAL: I will tell you that this is a daily challenge, but you know that already. In television in general, and for broadcast TV in particular, this is a continuous process. You work every day with a lot of dedication. You have to plan short term for this week, this month, this year, for the next two years and for five years. That’s what we have been doing. It is a process that has already lasted more than 40 years. Throughout this period, we have been perfecting some tools that are important to understand and serve our viewers well. We invest heavily in sociological and anthropological research in order to learn the habits and customs of our population and how we can serve them better through television. We invest heavily in technology. We have completed the conversion from analog to digital, which networks in the U.S. have already done. Today we’re totally digital and almost entirely HD. We are already shooting telenovelas in 4K, with a beautiful visual quality. We invest heavily in information technology, too. And today I would say that Globo is a very computerized company.

We also work closely with our talent, which always makes a big difference. We try to attract, retain, train, and motivate. It is daily work. If you were to ask me what makes TV Globo different than the other television networks in Brazil and perhaps in other places, I would say that it is precisely our talent, the way we work together and how passionate we are about what we do. It’s about that daily challenge: to strive for the best possible quality and, whenever possible, to innovate and bring something new to the table that can meet the viewers’ needs while generating advertising revenue. That’s what we have been doing. Not only at TV Globo but also at its affiliates that we follow very closely. So this is a process that allows us to have diversified programming, 24 hours a day, with diverse genres such as fiction (telenovelas, TV series, sitcoms), journalism (news and sports) and variety programs. These are the three major genres. Yesterday I mentioned to friends here in Rio that last Tuesday I had several meetings and I normally go to sleep very late so I ended up watching late-night shows such as Jô Soares, our David Letterman, and I was calculating that we aired from 6 a.m. until Jô Soares, 23 programs—22 of them produced by us. You have to have an enormous capacity for creation and production, whether it be in entertainment, sports or journalism. It is about a motivation that inspires us and makes us very different in the quest for quality. We have had a small shift toward themes about everyday working people, especially if you look at our telenovelas, which are mostly stories about working-class people while retaining creativity and production quality. This holds true for journalism, sports and everything we do.

WS: Speaking of the company’s diversification program, you are now producing more action and police TV series as well as more documentaries, correct?
FLORISBAL: We used to have more sitcoms but today we have a little more variety. Besides sitcoms, we show more action series, more reality shows, and we are going to show The Voice, which I think will be a big hit as well. We have been producing several reality shows in addition to Big Brother. We have been trying to diversify our programming to serve our viewers.

WS: I understand that, besides novelas, you are also selling other types of programs, such as drama series and documentaries, to the international market. Is that right?
FLORISBAL: Our portfolio is always strongly grounded in telenovelas but we are also selling sitcoms now and documentary-based shows like Globo Repórter. We have named this strand GloboDOC. We sell a lot of soccer because of the agreements we have with federations. We sell the Brazilian championships to more than 140 countries. So our licensing department sells a range of genres and programs.

As you know, selling is very difficult, not only because of today’s economic crisis that has shaken several regions of the world but also because whenever possible, local audiences prefer to watch local productions. So we have also tried to develop that. In addition to licensing soap operas, soccer and other formats to over 100 countries, we have begun to sell a new format of co-production with local broadcasters, such as Telemundo in the U.S. We will co-produce Fina Estampa, a very successful telenovela here, with Telemundo. We have an orientation package for art direction, set design, etc. But the direction and the cast is local, to give it a local color. The writing is also adapted to include local characteristics. We are doing that with Telemundo in the U.S., with Azteca in Mexico, with SIC in Portugal. In fact, a few months ago, we launched a telenovela co-produced with SIC called Dancin’ Days. It was created by Gilberto Braga and it was a great success here in Brazil for many years. Today it is the leader in Portugal, just like Laços de Sangue, another co-produced telenovela, that won the [International] Emmy Award last year. So we have invested in these new opportunities for co-productions outside of Brazil.

WS: And what about in Brazil? Is there an interest to co-produce series at Projac in English or Spanish?
FLORISBAL: We would have to prepare ourselves for that, and at the moment we are busy meeting very large domestic demand. For example, we produce about 2,800 hours of entertainment in all genres, and we produce about 2,600 hours of journalism and sports annually. So our production capacity is full. One day we may create an annex for the international market but we would have to prepare for it. Today we do not have this capability. 

WS: You focus mainly on the Brazilian market, then.
FLORISBAL: Yes. It is also because the Brazilian advertising market is the sixth-largest in the world. And it is the third-largest for network TV, after the U.S. and Japan. And the Brazilian market will only grow further, so we still have tremendous opportunities to explore.

Obviously, we would like to grow in licensing and co-production so that we can have an even larger presence institutionally and be the network that brings a bit of the Brazilian culture to other parts of the world. However, from a business point of view, this growth will be relatively limited. It is not in our DNA to compete in content with major media companies such as those from the U.S. and Europe, whose content is mostly in English, because it would take us too far from our core business. We look at the international market in terms of Spanish and Portuguese. We do not believe it is worthwhile to try to compete in the short term with these big media companies that already have a tradition, an expertise and a significant investment in production. 

WS: I understand that pay TV in Brazil is also growing exponentially. Is that correct?
FLORISBAL: Yes, that is correct. It has had significant growth. If you go back to the year 2000, there were perhaps 2 million cable subscribers. Since that time, the number of cable providers, especially via satellite, has increased, subscriptions have became cheaper and more channels have come to Brazil. Today there are 14 million subscribers, and that number is expected to grow at a rate of 1 to 2 million subscribers per year. In three or four more years the number of subscribers will reach 20 million. At that point it will become mass media and important from the standpoint of audience size. These channels, 150 channels in total, already have a large audience. They compete for second or third place in the market, after TV Globo. Of course, from an advertising investment point of view its significance is smaller. Pay TV’s share of advertising spending is between 3.5 percent and 4 percent, say 3.8 percent against 65 percent for broadcast TV. Why? Because most advertisers already have a presence on broadcast TV and there’s little need to supplement this presence on pay TV except when a rare adaptation of a campaign is required for a niche market. So I would say that pay TV will continue to grow exponentially in terms of subscribers and audience size but [not] in terms of advertising dollars. Its growth will be much lower simply because the market is already saturated by network TV and also because of the Internet, which currently has an advertising market share of around 5 percent and should grow in the coming years.

WS: How do you see Globo’s international growth and expansion over the next year or two?
FLORISBAL: On the licensing front, we have increased our portfolio to be able to offer more programming. We believe that the licensing of soccer-game coverage will grow considerably because the World Cup will be held in Brazil in two years. That will attract considerable attention. We will grow a little more in co-production. But we believe that the greatest growth will take place in our international channel, TV Globo Internacional. We have been investing heavily in it. We used to have the same programming for everyone. Now we have five different feeds: one for the U.S., one for Europe, one for Portugal, which is a specific market, another for Africa and another for Asia. We are now refining these programs and will increase the production of local products as much as we can, primarily for Brazilians living abroad. Basically, TV Globo Internacional has 600,000 subscribers, but we believe that we can reach a million subscribers in the next few years, which is a good business.