Article Preview
TopIntroduction
After 50 years of leadership, broadcast TV hegemony is under threat for the first time. Emerging new media compete for people’s attention and advertisers’ budgets, creating an increasingly challenging environment. Furthermore, the television model based on a passive audience sitting in front of a TV screen is challenged by the advent and proliferation of broadband, anytime, anywhere, consumer-controlled alternatives. More than 42% of US households have high-speed broadband access and more than 10 million have DVR devices (Bradley & Bartlett, 2007). Indeed, new information and communication technologies (ICTs) are reconfiguring the media landscape, shifting industry boundaries towards comprehensive ecosystems which integrate previously separated industries such as content, telecommunications, electronics, computers etc. (Iyer, Lee, & Venkatraman, 2006; Jenkins, 2006; Wirtz, 2001). Further, new ICTs can be considered emergent and disruptive technologies in the media ecosystem (Christensen, 1997) because of their huge impact on markets and business models.
The Brazilian media environment is unique in relation to both audience behavior and advertising expenditures. Broadcast TV is present in 98% of Brazilian households. On the other hand, paid TV, considering both cable and satellite, is present only in 12%, but rising steadily. Internet penetration is growing fast, especially in lower income classes. In 2008, only 18% of households had Internet access, rising to 27% in 2010 (CETIC.br, 2011). As can be inferred, broadcast TV plays a dominant role. It is present in almost every single Brazilian household, regardless of social class or region, and it has a long-running leader: Globo Television Network. Created in 1925 as a newspaper, Globo Organization diversified into TV in 1965. Soon after it first aired, Globo took the audience leadership, a position that it has held on to this day. The model relies mainly on establishing an organized programming grid around primetime, beginning at 6pm with a soap opera (“telenovela”) which is followed by local news, a second “telenovela”, national news and a third “telenovela”, ending around 11pm. This became a Brazilian family routine: five hours of TV entertainment and news at the end of every day (Sobrinho, 2011).
The impact of this model on audience behavior was astonishing. Globo set the standard, captured most of Brazilian audience and has kept it ever since. In 2009, Globo concentrated approximately 60% of medium audience (IBOPE, 2009), an impressive number compared to worldwide figures. During 2010, the top five broadcasters combined for an audience of 55% in the UK, 65% in France and 66.2% in Italy (Lange, 2012). The top three US networks combined accounted for 32% of audience in 2005 (Hindman & Wiegand, 2008).
Dissemination of new media has direct impact on the way people entertain and inform themselves. Broadcast TV audience has steadily decreased over the last few years. In 2005, 38.2% of Brazilian households watched broadcast TV daily, but only 36% did in 2008 (IBOPE, 2009). Nevertheless, investment in broadcast TV still grows above market average. The Brazilian advertising market grew 13.9% from 2010 to 2011, reaching US$17 billion. In contrast, the local economy grew far less during that same period: 2.7%. Broadcast TV captured an outstanding 63.3% share and grew 14.6% YoY, even though audience levels fell. The Internet grew considerably (24.8% YoY), but captured only 5.10% of total share (Projeto Intermeios, 2012).
The global landscape is very different. Worldwide advertising spending rose by 7.3% from 2010 to 2011, far less than in the Brazilian market (13.9%). Both North America and Europe showed worrying numbers. The North American market increased only 1.8% from 2010 to 2011. In Europe, ad spending declined -0.4%, with larger decreases in Greece (-13.1%), Italy (-4.0%) and Spain (-9.7%) (Nielsen, 2012). 2011 was a tough year for the global economy, but Brazil outperformed the global market, showing great momentum.