Latin America Emerges as Biggest Buyer of Hollywood TV Series, Movies at L.A. Screenings
The region has become a growth market thanks to robust economies in key territories and distribution technology that has created new ways to reach consumers.
The largest group of buyers at the recent L.A. Screenings wasn't from Europe or Asia. It was the contingent from the two dozen countries in Latin America and the Caribbean that have emerged as a growth market for Hollywood series and movies thanks to robust economies in key territories, especially Brazil, and distribution technology that has created new paths to reach consumers from Mexico to Argentina.
"Latin America has risen in importance recently because there are so many windows you can sell simultaneously," said Gary Marenzi, president, worldwide television at MGM. "The pay television business is booming, and we have seen our partners down there grow in subscribers and build new channels and new businesses. Basic cable and broadcast are as strong as ever and the S-VOD business is starting to grow."
Unlike other parts of the world, Hollywood's most important customers are not the big local television stations. "The fact is that for most terrestrial television networks in Latin America, our programming is not the must-have and the foundation," said Jeffrey Schlesinger, president of Warner Bros. International Television. "It's much more telenovela-centric kind of broadcasting."
The telenovelas, soap opera-style serial dramas, are made in Latin America, especially in Mexico. Instead, the most voracious customers of American shows and movies are the cable and satellite services, which produce little of their own content.
"Technology has created opportunities in digital media in Latin America," said Peter Iacono, managing director of international at Lionsgate. "The way people consume media is so different than it was a few years back."
It is not just the Americans who have benefited either. "It's any quality content that will perform for them," said Sheila Aguirre, senior vp sales and development, Latin America and Hispanic U.S. at FremantleMedia Enterprises. "We have American series, but we also have British and Australian series. Quite frankly, if you dub them, they all look alike."
Aguirre said Latin America has also grown as a customer because the region was not as hard hit by the 2008-09 recession as Europe, Asia and the U.S. "Latin America was not as affected by the global crisis as many of the other countries," added Aguirre. "They've become more resourceful."
What that means is that they have been through economic, political and social turmoil for years, but at present are, with some exceptions like Venezuela, more economically and politically stable than in past years.
"Certainly the economic environment is much better than it was the last few years," said Armando Nunez, president of CBS Studios International. "The demand for our content remains robust. We were lucky even during the darkest hours of the global financial crisis the demand for American content remained strong."
Many of the American companies -- including Warner, Sony, MGM and NBC Universal -- either own or are partners in cable and satellite channels in the region, where they both play their own product and buy content from others.
"These guys have started paying some significant money for the window that they have," said Schlesinger, "which is usually right before terrestrial because they run it in a subtitled version, not a dubbed version. So Latin America's become pretty frothy with all the competition."
Even a handful of Latin companies have benefited from the growth of the market, which also includes new digital TV stations put up by the terrestrial broadcasters. The number of digital channels in Latin America is expected to grow from about 100 such outlets today to more than 400 by the year 2020.
One of those that has benefited is Telefilm of Argentina, thanks to the foresight of its founder, Leon Darcyl, half a century ago. While pretty much everyone else in Latin America in 1961 was buying only individual country rights for shows, Darcyl brought rights for all of Latin America, including such evergreen shows as Flipper, Speed Racer, Get Smart and Lassie.
"In the first years of the 1990s when the satellite services arrived we had the rights for all these pictures and other things and made the first Pan Latin American business," said the founder's son Tomas Darcyl, now president of the Buenos Aires-based company.
During the screenings, Telefilm held a cocktail party to celebrate its 50th anniversary, coming off a banner year in which they had the rights to Oscar winner the King's Speech.
A decade ago, the Darcyls spun off a sister company called Sun Distribution, which invests in programming in the script stage or during production, in return for which they hold an equity interest and get all the Latin rights.
"That was very important for us," said Darcyl, "because it has become very easy to acquire television rights. So we went one step further and acquired all Latin American rights in advance. We started out doing two or three a year and now are in about 30 pictures a year."
On the walls at their party in a Century Plaza ballroom were posters of the product they currently offer, including Source Code, Sanctum, Fair Game and Love Happens.
"They come to us," said Darcyl, "because we are serious, bankable, and we are the most respectable independent company in the Americas."
One business that isn't doing well in Latin America, said Darcyl, is home video. It has been ravaged by piracy. He says most companies in Argentina or Mexico, the largest Latin market, don't even bother to release many of their shows.
However, that is more than made up by the growth of satellite, cable, digital channels and now the arrival of video-on-demand and new-media players like Netflix that are expanding their streaming services worldwide.
"The thing to watch is these over-the-top players," said Schlesinger. "As these connected devices and mobile tablets enter the market, there is going to be a slew of new players (who will be buyers). It is more complicated, more segmented and more fragmented but that's the place to watch."
Latin America, said Aguirre, "has morphed into this massive market with a lot of independents setting up shop. And everybody comes looking for programming."