Brazilian Pay TV Industry Adapts to New Regulations

Industry execs debate the new rules at the Rio Film Fest, with one calling it a "mini-revolution."

RIO DE JANEIRO – As PayTV numbers keep spiking in a booming Brazilian economy, recent market regulations passed by Congress in March are still triggering movement and adaptations in the industry, a situation confirmed by TV execs invited to the RioSeminars hosted by RioMarket, the Rio de Janeiro Film Festival’s huge industry platform.

In the context of a huge development of consumption levels for a growing middle-class, a survey by the National Agency of Telecommunications last August showed a 30.05 percent increase in subscribers from July 2011 to July 2012. According to Anatel, the total amount of PayTV subscribers in Brazil now reaches 14.8 million households, which stands for 25 percent of the total population.

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Passed by Congress earlier this year, the PayTV Law 12,485 shook the industry by regulating the market The bill enabled foreign telcos to enter the industry and provide TV service, established an industry tax fund to finance audiovisual content, and imposed screen quotas for independent local productions, one of the rules that was most resisted by big networks, like Sky TV.  Each channel must now broadcast at least three-and-a-half hours of locally produced content each week.

“This was a great decision by Congress. We have AV assets that need to be better channeled, like telenovelas and local pop music,” said ANCINE President Manoel Rangel. ANCINE was assigned to regulate and enforce the new law.

TV Attorney Eduardo Senna referred to the new scenario as “an ecosystem” that would both encourage quality independent production and guard it from unequal negotiations. “Producers are ready and will be more ready as time passes,” he said. “The law was very much expected and it can guarantee the flow of our productions. This can even-up negotiation with the huge networks, since previously there was no equity. Now the big channels need our contents.”

“We’ve just had a mini-revolution,” said Marco Altberg, head of the Independent Producers Association (ABPITV) “We’ve been preparing for this moment for 10 years and now we’re at the starting point. Producers are ready and even companies from other AV sectors are moving towards producing TV,” he added.

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Brazil’s Audiovisual Secretary Ana Paula Dourado Santana mentioned how the boost in middle-class consumption levels poured into technological goods such as modern TV sets. “Now that we have the chance, we need to find a way to reach those middle-class masses,” she said. “For a long time they have gotten used to consuming foreign culture, but now they seek elements connected to their Brazilian identity. They want to see themselves on the screen.”

The RioMarket kicked off today and runs parallel to the Rio Film Festival until Oct. 11th.

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