The Economist’ article that I have chosen for my presentation is related to the largest media company in Brazil called Globo. As Brazil is currently hosting the World Football Championship, you might assume that the TV viewing must increase dramatically during this period; however, it is not the case. Globo channels are viewed by 91 million people on a daily basis; that is almost a half of the entire population. In the United States, for instance, the only network which has won the rights to broadcast the Super Bowl can have such an audience once a year. Globo Group is a large media holding, which includes radio, television broadcasting, publishing, newspapers and filming industries; however according to the article, the majority of company’s revenues come from advertising and broadcasting. So-called telenovelas or Brazilian soap operas of Globo production are extremely popular. Even though Globo can not be declared a pure monopoly, it obviously possesses a considerable power over information.
In order to identify the roots of the Globo success, I am going to discuss company history shortly. It all started in 1925, when O Globo newspaper was by created Irineu Marinho. Forty years later, with the appearance of the television in Brazil, his son Roberto has created Rede Globo, a small TV station with the help of military regime of Humberto Castello and the Time-Life investment of 6 billion, which allowed the newborn channel to shoot ahead. Although such an investment was illegal, it helped Rede Globo to surpass its main competitors. Needless to say, that Roberto’s ties with a military regime where extremely beneficial for its’ joint venture with Time-Life (Codoner, 2010).
For 20 years, Globo has transmitted the message of the military government legitimacy, strengthening the national image and the feeling of
“Brazilian-ness” (Melo, 1995). However, in order to maintain a smooth relationship with the authorities, Globo had to have its news and programs censored and concentrate on mass entertainment through the telenovelas’ production in order to keep citizens far from the brutal reality of the regime (Codoner, 2010).
In the post-dictatorship era, Globo faced growing competition from newly emerged networks; simultaneously, its’ audience share has gradually declined from 70 to 45 percent from 1985 to 2000 (Pace and Hinote, 2013). Since ten years, Globo still manages to hold this market share (Thomson, 2010). Despite the fact, that nowadays mass audience notion is gradually fading away, Brazil, in comparison with other countries, have experienced the least loss in terms of audience. Worldwide 20-30 percent audience share is a maximum for a few media businesses; in U.S or India half of it would be considered a very good result already (Nielsen, 2013). These findings emphasize the extraordinariness of Globo success.
Melo (1995) claimed that Globo success can be defined as a combination of North American managerial and marketing strategies as well as the advertising and film industries. The latter ones have been successfully combined as certain brands are constantly promoted in telenovelas, generating advertising revenue for the company (Codoner, 2010). As Globo has the biggest audience share and nearly 100 per cent coverage, it is the obvious choice for advertisers who intend to reach as many TV viewers as possible (The Economist, 2014). Globo group can reinvest the money received from its sponsors into further research and development. In the end, there is a “vicious circle” of Globo growth and diminishing chances for competitors to outperform it.
Probably the main reason behind the telenovelas’ popularity is in a high quality standard set by Globo (Codoner, 2010; The Economist, 2014). Special department created by the company is responsible for extensive research of current trends and issues as well as audience preferences and expectations (Codoner, 2010). The plot can be changed accordingly to the results obtained (The Economist, 2014). Eventually, the primary goal of Globo as of every private company is to keep its customers satisfied; Globo does it successfully through 8 hours of daily entertainment (Pace and Hinote, 2013). Considering, that there is only one hour for news and educational programming each, it might seem too much, however Brazilian telenovelas are the combination of both education and entertainment, trying to present complicated political and social issues in an easy manner (Codoner, 2010). Moreover, the majority of Brazilians still have a habit of “appointment viewing,” which makes television some kind of devotional cultural phenomenon (The Economist, 2014).
Despite the fact, that Globo seems invincible, certain threats to its well-being do exist. As it already has been mentioned, Globo possesses a great power over information. Since Globo has been a powerful tool of political regime in the past, it is known to misuse its powers when it comes to showing the reality. During the presidential elections in 1989, the Globo has misrepresented the information about candidates giving one of them more prime-time and indirectly supporting him through telenovelas, just because his family happened to own one of the Globo affiliates (Pace and Hinote, 2013). This situation clearly signals of corruption and violation of media impartiality of Globo.
Needless to say, that despite Globo big audience share it is not a monopoly any longer. In 2012, one of the Globo competitors, TV Record managed to receive the exclusive rights to broadcast the Olympic Games while this privilege has always belonged to Globo before (Zulian, 2012).
Despite the national devotion towards television, the Internet usage is on the rise in Brazil, which has the biggest number of YouTube and Facebook viewers outside the U.S (Chao, 2013). The occurrence of independent media sources like Ninja media, for example, where young people with IPhones film everything “as it is”, indicates the growing need of the nation to diverse its information channels.
Considering these findings, Globo will certainly have to be prepared to fight hard for its advertising revenues, this time online, in a battle of two G’s: Globo and Google.
In conclusion, I want to add that Globo success story is full of inconsistent and unsustainable business practices. Its international presence and strong national image are undeniable advantages, however in order to maintain its presence it should rework its image, which is probably still associated with dictatorial times and thus makes bad publicity, in order to attract a young generation, which “fades away” online. Globo has been a family-owned monopoly for years; currently it remains powerful despite some drawbacks in the way it drives business, but gradually it audience share will diminish even more; that is the world trend. In my opinion, Globo is too reliant on telenovelas and should try to expand its TV menu as well as try to outsource some of its activities, despite trying to control everything solely. For example, it could subcontract some of its shootings to some other film production companies, which could make it cheaper.
Codoner, B. (2010). Popularization of TV Globo in Brazi. Retrieved from: https://kb.osu.edu/dspace/bitstream/handle/1811/45483/Thesis.pdf
Chao, L. (2013, June 29). Brazil Protests Prompts Shift in Media Landscape. The Wall Street Journal. Retrieved from: http://online.wsj.com/news/articles/SB10001424127887323873904578570244226440374
De Melo, M. J. (1995). Development of the Audiovisual Industry in Brazil from Importer to Exporter of Television Programming. Canadian Journal of Communication. Retrieved from: http://www.cjc-online.ca/index.php/journal/article/view/880/786
Nielsen, K. R. (2012). Ten Years that Shook The Media World. Retrieved from: https://reutersinstitute.politics.ox.ac.uk/fileadmin/documents/Publications/Working_Papers/Nielsen_-_Ten_Years_that_Shook_the_Media.pdf
Pace, R., Hinote, P.B. (2013). Amazon Town TV: An Audience Ethnography in Gurupá, Brazil. Retrieved from: http://books.google.com.sg/books?id=4Ch3250GxxwC&pg=PA32&lpg=PA32&dq=globo+audience+share&source=bl&ots=En6O_pkTFC&sig=ilDAL8BdLrXtLR7VAR8bvQ9kw00&hl=ru&sa=X&ei=Dx6xU9r6N6ak4gSF9YHAAQ&ved=0CGoQ6AEwBw#v=onepage&q=globo%20audience%20share&f=false
Thomson, E. (2010). Organizações Globo. Ina Global. Retrieved from: http://www.inaglobal.fr/en/television/article/organizacoes-globo
Zulian, P. (2012, March 8). Olympics 2012: Brazilian TV Record Wins the Rights to Broadcast the Games; But Ratings Flop. The Hollywood Reporter. Retrieved from: http://www.hollywoodreporter.com/news/olympics-brazilian-tv-record-coverage-ratings-358223
No author. (2014). Globo Domination. The Economist. Retrieved from: http://www.economist.com/news/business/21603472-brazils-biggest-media-firm-flourishing-old-fashioned-business-model-globo-domination