This was one of the main conclusions reached by the specialists who participated in the webinar organized by ASIET on the transformation of the global and Brazilian audiovisual market. The participants also called on regulators to eliminate restrictions to vertical integration with the aim of promoting more dynamic competition, maximizing diversity of content, cutting consumer prices and promoting local production.

Versión en español, aquí
Versão em português, aqui

22 November 2019 – Yesterday, the Inter-American Association of Telecommunications Companies (ASIET, Asociación Interamericana de Empresas de Telecomunicaciones) held a webinar on the evolution of the audiovisual market, competition and its impact on supply, consumer wellbeing and service quality, with particular focus on the Brazilian market. The starting point was the Telecom Advisory Services report “Changes in the Global and Brazilian Audiovisual Market”, written by Dr. Raúl Katz, professor and Director of Business Strategy Research at the Columbia Institute for Tele-information, University of Columbia.

The report is available in English and Portuguese.

The speakers of the online seminar included Dr. Katz; Maryleana Méndez, Secretary General of ASIET; Facundo Recondo, VP of International Relations and Public Policies at Warner Media; and Roger Entner, founder of Recon Analytics Inc.

The report provides the most up-to-date and comprehensive analysis of changes in the Brazilian audiovisual industry. Raúl Katz concludes that industry trends towards verticalization and the proliferation of over-the-top (OTT) platforms benefit consumers, make for more dynamic competition and promote the local content industry. The study maintains that restrictions on the verticalization of content producers and distributors, such as those set forth in the Brazilian pay TV law, act as barriers to industry development, hinder competition and hurt consumers and the local content industry.

Highlights from the report, as listed by Raúl Katz, include:

  • Both globally and in Brazil, audiovisual markets are being affected by ferocious competition among pay TV and OTT operators. The players are competing not only in video distribution but also in adjacent industries like content development.
  • Under the digitization of content, the traditional barriers across the audiovisual value chain that previously separated distributors from content producers have disappeared, prompting industry players to integrate vertically to maintain a competitive advantage in the market.
  • Intensifying competitive dynamics and vertical integration have produced tremendous benefits to consumers, such as variety of content, ease of access, improved customer experience, low pricing, etc.
  • In this context, restrictions to vertical integration, such as those set out in the Brazilian pay TV law, are either anti-competitive or detrimental to the protection of consumers and the local audiovisual industry.

“In consequence, if policy makers want to maximize diversity of content, low prices, and multiple offers to consumers, they need to eliminate restrictions to vertical integration and other regulatory burdens that inhibit the industry players’ ability to develop new products and services. Such an approach will not reduce competition; on the contrary, it will allow it to flourish, further benefiting consumers”, Katz said.

In turn, ASIET General Secretary Maryleana Méndez stated that: “To develop the audiovisual market and boost its positive effects throughout the economy, from a transversal perspective the fight against piracy is a major challenge. Specifically, according to the Brazilian Ministry of Justice there are 20 million homes that use pirated content over the internet, and although the efforts of the Brazilian government are to be recognized, such as the recent operation 404, there is room for more action in this area, both in the regulatory field in a broad sense, and in terms of raising awareness in the population to promote healthy digital habits.”

Along the same lines, Facundo Recondo of Warner Media explained how AT&T evolved from a telecommunications company to become a modern media company. “Digitalization brings us opportunities. Innovation and mobility are part of this new era, where the mobile internet revolution has changed everything. And the third magic word is data.”

Meanwhile, Roger Entner, founder of Recon Analytics Inc, stated that “The proliferation of on demand video services has transformed an industry. As we have entered peak television with an unprecedented growth in shows, the number of different places where content is created has also exploded. More than half of all the US television shows are now made outside California.”

You may find the video of the activity fully recorded, here: