LatAm Media Trends Take Center Stage in NATPE Panel

Viacom’s Pierluigi Gazzolo, Cisneros’s Adriana Cisneros, Endemol Shine’s Cris Abrego and Brazilian producer Carla Affonso discussed merger and acquisition activity in LatAm media, the drastic changes in the U.S. Hispanic sector and the problems of audience measurement in a NATPE panel this morning moderated by World Screen’s Anna Carugati.

The session, titled “Latin America and the U.S. Hispanic Market—The Big Picture,” opened with Gazzolo, the president of Viacom International Media Networks (VIMN) Americas, talking about Viacom’s investments in Latin America, which most recently included its acquisition of Telefe in Argentina. Viacom’s “core six” channel brands are present in the region, and the company continues to invest in original content in Latin America, producing about 500 hours a year. “Now with Telefe that becomes 3,500 fresh hours a year,” Gazzolo said. “Our view of Latin America is serious, we believe in it, it’s a market that continues growing, it’s a market where Viacom has sought scale for many, many years. We’re very excited with this acquisition [of Telefe] as it does give us both the content ownership and the scale to take our business and our product to the next level in the region.”

Carugati asked Cisneros, the CEO and vice chairman of the Cisneros group, about MOBIUS.LAB Productions, a joint venture with Getty Images, and the potential for other alliances in the region. “We created a partnership [with Getty Images] to see if we could create with their library a production company, which is what we’ve done. [MOBIUS.LAB] has very little to do with what we’ve done in the past. We’re working with really interesting clients that range from news departments at TV networks around the world to entertainment networks that want more snackable content.”

Cisneros has also entered the dubbing services market and partnered with The Kitchen. “As people are becoming re-interested in better and better content with all these platforms, there is a greater need, once again, for high-quality dubbing,” Cisneros said. “The last time people paid attention to dubbing was in the ’80s.”

On the digital side, Cisneros just clinched “an enormous and extremely exciting” partnership with Facebook in Latin America. “We’re representing them not only for Facebook but also for Instagram, Oculus, Messenger and WhatsApp. It’s the beginning of a partnership that has a lot of legs. They’re also relying on us to help them be the bridge to advertisers and agencies to understand how to successfully bring advertisers into digital platforms.”

Abrego, CEO of Endemol Shine North America and chairman of Endemol Shine Americas, noted that “it’s an incredible time for production companies” today. The company continues to focus on the global exploitation of its mega-formats, but as the bar for quality content has been raised everywhere, there is more opportunity to create originals in the region, particularly in scripted. And on the unscripted side with big brands like MasterChef, “We are finding ways to make them more bespoke for each of the territories…. We’ve had to work really hard to preserve the big tentpoles of the format that make it work, but still make it tailored for that market.”

Carugati asked the panelists about the health of linear television in Latin America. VIMN’s Gazzolo noted, “I don’t think anyone can tell you what specific share of viewing is moving to the nonlinear world. We need more measurement to understand that and, unfortunately, one of the things we are behind on as an industry is having better measurement.”

The company has had success with the authenticated Viacom Play Plex apps that have rolled out for some of its core brands, including MTV and Nickelodeon. “We have seen an incredible amount of growth.”

Gazzolo discussed viewer multitasking, giving as an example the premiere of Super Shore—a regional adaptation of Jersey Shore—which launched on digital 48 hours before linear in the MTV Play app. In about five days there were 3 million plays in Mexico. With the linear premiere, meanwhile, there was a 450-percent ratings growth. “We do believe that particularly with the millennial audience or younger, there is an interaction between linear and multiplatform, but there is no question that VOD is the way people want to consume.”

Gazzolo stressed the importance of content ownership today, adding, “The word linear shouldn’t even exist anymore. Linear is evolving into something else.” He referenced how LatAm pay-TV operators are evolving to become “more than a group of linear channels.” He also noted that some content needs to be consumed in a linear fashion—awards shows and other live events. “Latin America, so far, if you look at the numbers, advertising growth, pay-TV subscriptions are growing, while nonlinear consumption is growing. So I have not seen the cannibalization that people speak of.”

“Latin America is not that different from the U.S. Hispanic market,” Cisneros said. “Even though it’s difficult to aggregate the data across all markets in Latin America, we do know that one in ten millennials in Latin America are cord-cutters. Ten percent are never going to get a cable subscription. You layer into that the realities of the emerging middle class in the digital era, with the issues that credit card penetration has, and the fact that millennials in Latin America that are being born in the digital revolution never want to have a physical credit card and they want digital banking solutions—they’re going to end up favoring a digital content solution over a cable subscription.”

She went on to say that the landscape of TV networks and TV licenses being up for sale in Latin America—something that used to be a rare occurrence—is an important development to note. “In the last two years, there have been a lot of TV networks for sale and there are a few more coming up that are really important. And there are a lot of licenses that are suddenly available. Traditional TV owners in Latin America are freaking out. They’re feeling like they’re playing the game of the hot potato. They don’t want to be the last owners to end up with these TV assets because they haven’t figured out how to evolve, how to innovate, and what they’re seeing is that their advertising revenues are going down because they haven’t scaled, and they haven’t stopped being a local player in their local country. And the world has evolved. They haven’t gone digital, they haven’t gone pan-regional, and they’re really scared. Not a single local player has done a really good job at becoming a big-time player. And then you have the majors in the U.S. and they’re all doing big moves to buy those assets in Latin America.”

She continued, “It’s the most exciting time to be brokering media deals in Latin America. It is a very unique time. This has never happened before, it’s not going to happen again in ten years. It’s right now.”

Gazzolo said that TV networks will win if they can transform themselves into VOD providers. “Linear is quickly evolving to the new way of consumption.”

The changes in consumption habits do create challenges for content producers and distributors, Abrego said. “We own our content, and it’s becoming more and more difficult to do that with networks and companies looking to acquire their own digital, their own streaming, their own plays. It’s a huge fight to own the content as producers.”

Affonso is the CEO of Cygnus Media, an independent production outfit in Brazil. She is finding new opportunities given that the number of outlets has proliferated. Pay-TV channels are now investing more in their own content.

The discussion then moved to the U.S. Hispanic market. Cisneros said the market is becoming “increasingly sophisticated and very complex and very difficult to understand. When you see the struggles Univision is having today to keep its ratings up, and when you see how Telemundo is beating Univision, it’s endlessly fascinating.”

Cisneros said that in 2016, Netflix’s best-performing show was Narcos; that drama had a linear rollout on Univision after its streaming launch and it was the broadcaster’s worst-performing show ever. “What does that mean?” Cisneros queried.

Abrego suggested, “The [Univision] audience is on Netflix, so they watched it already. What if Narcos had been an original for Univision? Would it have made a difference?”

“I don’t know,” Cisneros answered. “There are maybe 100 reasons why it didn’t work. But I think it’s worth analyzing.”

“Audiences are changing completely,” Affonso said, making it difficult to know what to program when. “Sometimes you make something that you don’t think is going to perform and it’s huge.”

Gazzolo said that Viacom “had a big problem” in the U.S. Hispanic market. “We tried to launch MTV Tr3s for the younger demo of the U.S. Hispanic market and that was stupid because that demo wants to watch in English. What’s the generational gap? Is there a generational gap?”

Carugati asked Abrego about Endemol Shine’s experience with El Vato, which was made for NBC Universo. “Telemundo is really changing the game,” he said, in terms of the kinds of stories they’re willing to tell on their channels. “I call it Mexican Entourage,” Abrego said of the hit series. Unlike many shows airing on U.S. Hispanic outlets, the series used a lot of external locations—including Rodeo Drive—and handheld cameras. “It feels so different. There’s cross bilingualism on the show. It feels very cool.”

Endemol Shine is also working on U.S. Hispanic versions of its big formats that have already been adapted Stateside. “People were worried there’d be a loss of audience for the original [U.S.] brand,” but so far that hasn’t happened, Abrego said.

Carugati then moved the discussion back to Cisneros’s “hot potato,” asking the panelists to weigh in on how the LatAm TV sector is being reshaped by deal activity. Cisneros said her company is looking at other opportunities after losing the battle for Telefe to Viacom.

“We’re always going to be looking for assets,” Gazzolo said. “The asset is not about the network, it’s about the content, the scale of content. The network matters and broadcast is still king, but to me, it’s about investing in content.”

Abrego said that Endemol Shine is making some investments with production companies in different territories. “There is so much talent coming out of Latin America. We’re focused on finding those next big stars or creators and big-idea thinkers.”

Discussing the ad market, Cisneros said that the conversation about “digital pennies is finally going away. We can have a meaningful conversation with, say, Procter & Gamble, where we’re mixing advertising across all platforms.”

She continued, “The digital dream is now a reality in Latin America and everybody should be seriously considering investing in digital adspend there.”

Gazzolo said that the LatAm pay-TV ad market is growing. “We saw double-digit growth last year. You do need scale.” On digital, he said video impressions really matter. He reiterated that measurement platforms are still lacking and noted that VIMN LatAm is betting big on branded content. “We think that’s the way to bring smart investments into digital media.”