brazilian tv in the digital era: turn on of turn off?

Brazilian TV in the Digital EraTurn On or Turn

Off?January 2014

Bruce LedesmaDigital Marketing Strategist

Is TV in Brazil Alive and Kicking or Dying?

Brazilian TV in the Digital EraThat is the Question

OCN (Pay TV) as the underdog +33%

Brazilian TV in the Digital EraToo Much Speculation

Source: IBOPE

Greater São Paulo

TV Ratings (7am to 12am)

2011 2012 2013

In 2013, each rating point corresponded to 61.952 households or 185.814 individuals in the Greater SP area.

OCN (Pay TV) as the underdog + 26%

Brazilian TV in the Digital Era

Greater São Paulo

TV Ratings (Prime Time)

Too Much Speculation

2012 2013

Source: IBOPE

In 2013, each rating point corresponded to 61.952 households or 185.814 individuals in the Greater SP area.

What, how and why people watch TV

Three types of TV viewers:Loyals Loyals watch series, soap operas and reality shows in Brazil. They watch less TV than the general population but handpick their shows. They pursue more info about their favorite programs and share it with friends. Long term commitment.

Zappers Zappers watch television. They flip channels and aren’t loyal to any show. They don’t share TV content with friends. No commitment.

CasualsCasuals fall somewhere in between. Typically they will watch a show from beginning to end, but won’t hesitate to change channel if it starts boring them. To some extent Casuals share show information with friends.

Pay TV is Doing GREAT!

Source: ANATEL

2006 2007 2008 2009 2010 2011 2012 June 2013

- 2,000,000.00 4,000,000.00 6,000,000.00 8,000,000.00

10,000,000.00 12,000,000.00 14,000,000.00 16,000,000.00 18,000,000.00

Pay TV in Brazil(millions of sub-

scriptions)# Subscriptions

4.65.4

6.37.5

16.217.0

Robust Profits

2010 2011 20120

50000100000150000200000250000300000350000400000450000

R$307,151

R$373,173 R$393,702

NET ServiçosNet Profit (BRL 000s)

Source: Net Serviços

Impact of OCNs (Pay TV) in Brazil

Individuals are not exclusively Loyals, Zappers or Casuals. People watch TV in different ways in different contexts. Few broadcast channel options in the past and Globo’s dominance gave Brazilians limited choices on TV.Rise in disposable income as an important factor of the robust growth experienced by OCNs (Pay TV).OCN growth has created a (late) change in Brazilian TV consumption habits: there are more zappers now.

More TV time

% TV sets turned on

2012 201339.2

40.140.1

Greater SPBrazil

2008 2012 2013290

Daily TV consumption

in Brazil

Minutes

Source: IBOPE Media

Classes D/E watch twice as much TV

Classes A/B Class C Classes D/E0

Minutes309354

Source: IBOPE Media

Average Daily TV consumption

in Brazil (2013)

Rio de Janeiro (Ipanema)

What’s behind the mountain?

Rio de Janeiro (Favela da Rocinha)

The other side of the mountain

Everybody is tuned in!

Yellow dots highlight

satellite TV antennas

TV sales behavior

2012 2013216.0

TV Set Sales Worldwide

Millions

1H12 1H136.2

TV Set Sales in Brazil

Millions

Source: GfK

- 2% + 13%

… and counting in 2014!

Brazilian TV in the Digital EraTV sales forecast in Brazil in 2014

SamsungMarketGrowth Estimate

15%SonyMarketGrowthEstimate

40%Source: Exame

Who are Brazilians?

Brazilian TV in the Digital EraBrazilians & Media Consumption Habits

Poor but emerging fast

BRAZIL IS POOR

TV still is king!

Radio (last 7 days) 73%

Broadcast TV (last 7 days) 96%

Internet (last 7 days) 59%

Pay TV (last 7 days) 42%

Magazine (recently) 35%

Newspaper (recently) 30%

Media Reach in Brazil(consumers accessing media)

Source: IBOPE 2012

TV still is king!

of Brazilians say TV

is their favorite source for news

175million Brazilians

watch TV on a regular basis

Sources: Datafolha, IBGE (2012)

TV as a driver of online search

79% of Brazilian

internet users SEARCH FOR PRODUCTS ONLINE

after seeing them OFFLINE

OFFLINE media that motivates Brazilians to SEARCH FOR

PRODUCTS on the INTERNET are…

51% TELEVISION

PRINT MEDIA27%

OUTDOOR MEDIA

Sources: Iprospect, Google Brasil 2013

Brazilians & Media Consumption Habits

Fast growth3Q2012 4Q2012 1Q2013 2Q2013

85,000,000.00

90,000,000.00

95,000,000.00

100,000,000.00

105,000,000.00

110,000,000.00

Millions

Internet User BaseBRAZIL

Source: Nielsen/IBOPE 2Q2013

Southeast is the dominant region

Internet users in BrazilSource: Nielsen/IBOPE (October 2013)

11.2%9.9%

02 - 11 Years12 - 17 Years 18 - 24 Years25 - 34 Years35 - 49 Years50 + Years

Age Group

Gender

Growing middle class

Class A 90% 92%

2011 2012

Class B 73% 79%

Class C 48% 54%

Class D/E 27% 25%

Internet Reach Growth(by social class)

TOTAL 55% 60%

Source: IBOPE Media

Strong upward social mobility

40 MM Brazilians ascended to

Class C between 2003 and 2011

105 MM made up Class C in 2012, which represented 55% of the

population58%of the population wil make

up Class C by the end of 2014

1.46 TN

BRL will be spent by Class C by 2015, more than Classes

Sources: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

Simultaneous use of media

14%23%Source: TG.Net (April 2013)

Brazilian TV in the Digital EraSocial TV

It’s BIG!

Google Zeitgeist Brazil 2013

1. BBB Brasil2. Telexfree3. Salve Jorge4. Enem 20135. MC Daleste6. A Fazenda7. Pronatec8. Amor à Vida9. PEC 3710.BBom

1. Mercado Livre2. Casas Bahia3. Americanas4. Netshoes5. Magazine Luiza6. Ponto Frio7. Extra8. Submarino9. Decolar10.Walmart

TOP 10 SHOPPINGBrazilian TV in the Digital EraSocial TV

TV Programs TV AdvertisersPure Internet

Players

Google Zeitgeist Brazil 2013

1. BBB 132. A Fazenda3. Porta dos Fundos4. Revenge5. Shingeki no

Kyogin6. Violetta7. Pânico na TV8. Galinha Pintadinha9. José do Egito10.Naruto

Shippuden

1. Itaú2. Caixa Econômica3. Bradesco4. Santander5. Banco do Brasil6. HSBC7. Sodexo8. Itaucard9. Credicard10.Visa Vale

MULTI SCREENENTERTAINMENT

BANKS & CARDSBrazilian TV in the Digital EraSocial TV

TV Programs TV Advertisers

Old and new media collide

Twitter rolls out TV trending banners on August 2013

Social TV

Ratings &Tweets influence each other

Nielsen Twitter TV Rating rolled out on October 2013

Social TV

TV and sports driving tweets

Almost half of TTs in Brazil are influenced by TV

Social TV

TNT live interaction: Grammy Awards

TV harnessing the power of social mentions

Social TV

Social mentions

Social TV

Social mentions per TV network

#hashtag popularity in Brazil

Hashtags and daily mentions on peak days

Social TV

More opportunities on FB

Facebook Trending Feature roll out January 2014

Brazil is social and FB rules

Opportunities for marketers

Brazilian TV in the Digital EraHarnessing the Power of Social TV

5 Ways of Reaching Brazilians Through Social TV

#1 Sync social spots with TV habits

86% of Brazilians like

to comment on what they’re watching on

Brazilians who use social media to comment on programs while

watching TV

of those aged 18-24

of those aged 25-3549

% of those aged

of those aged 45-60

Source: CGlobal

Reaching Brazilians Through Social TV

#2 Follow the eyeballs

Brazilian TV in the Digital EraReaching Brazilians Through Social TV

√ Reality Shows

√ Soap Operas

√ Sports (Football)

#3 Use apps like Shazam

70%of Brazilian internet users want easier

access to information about products

advertised on TV shows

#1 Going on social media

#2 Getting information about shows#3 Searching for products advertised on TV

Favorite activities of Brazilians on the second screen while watching TV

Source: CGlobal

#4 Reach TV viewers via Facebook

#5 Segment by device

45% projected growth in 3 years

Source: Zenith Optimedia

2011 2012 20140

Billions USD

15.316.2

Brazilian Ad Market is World’s 5th largest

Brazilian Ad Market

Estimate

TV leads. Internet beats newpapers as # 2.

Brazilian TV in the Digital EraBrazilian Ad Market

Source: Projeto Inter-Meios (2012)

60.63%

11.06%

0.84%0.25% 11.98%

3.38% 2.96%

Broadcast TVMagazineRadioNewspapersCinemaGuides/ListsInternetPay TVOutdoor Media

Ad Share Spend in Brazil

All segments growing. Internet leads.

Source: Projeto Inter-Meios (2012)

Ad Share Spend Growth

Brazilian Ad Market

Low speed as a bottleneck

Brazilian TV in the Digital EraTelecom Challenges

Sources: IBOPE (October 2013)

In two years the number of internet users with + 2 Mb bandwith doubled, from 8.9 MM on October 2011 to 17.7 MM on October 2013.

Pleny of room for growth.

Brazilian TV in the Digital EraTelecom Challenges

Low Penetration (Continental country)

Expensive (Low income population)

Regulatory Issues (20% SLA for bandwidth)

What slows internet growth

Media is converging and TV is a strong ally of your digital

marketing plan in the country.

Brazilian TV in the Digital EraConvergence is the name of the gameIf someone says TV in Brazil is

dead DON’T LISTEN.

Bruce LedesmaDigital Marketing Strategist

Brazilian TV in the Digital EraContact Information

@ledesmabruce

/bruce.ledesma

ledesma.bruce@gmail.com

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