Disagreements on new regulatory mark for the market on subscription TV

The institution of quotas for domestic content on subscription TV caused polemics again, during a hearing about the Bill 29/07, by the Deputy Paulo Bornhausen (DEM-SC), promoted by the Committee on Consumer Protection on Monday (15).

The bill establishes a new regulatory mark for the distribution and production market of audio-visual content, with the objective to broaden competition and concurrence.

According to the evaluation of the coordinator for regulatory matters of the National Movie Agency (Ancine), Alex Patez Galvão, the low participation of domestic content in the programs’ scheduling, in addition to the high cost of the subscription, are two factors that explain the still small penetration of pay TV in Brazil.

In Brazil, the participation of pay TV in the market of electronic media is estimated from 8 to 12%, while in Argentina, India, China and in most of the European countries it has already surpassed 50%.

According to the representative of Ancine, the requirement for a minimum domestic content would be positive for the very Pay-TV companies, since they would have a better chance to broaden their consumer market.

Quality of Open TV
The general-director of Globosat, Alberto Pecegueiro, disagreed with him. For him, what explains the small participation of Pay TV in Brazil is the quality of Open TV, which, differently from other countries, enjoys a great prestige and popular acceptance.

Patez Galvão agreed with the apart, but added that the quality of Open TV was the very result of a market reserve and of the encouragement to domestic production, which should currently also be implemented in the scope of Subscription TV.

According to the representative of the Brazilian Association of Subscription TV Programmers (APBTA), a body that reunites the international Pay TV chains, Carlos Alkimim, the adoption of quotas should provoke an increase of 82.6% in the subscription price, in addition to “destructing the concept of international programs, preventing the expansion of the subscribers basis, and concentrate the national market in the hands of a few large entrepreneurial groups”. He evaluates that restraining foreign capital is not the adequate way to encourage domestic production.

The hearing was headed by Deputy Vital do Rêgo Filho (PMDB-PB). According to him, the committee should vote the matter right at the beginning of the legislative session of 2009.

Report - Luis Claudio Pinheiro
Editing - Maria Clarice Dias
Translation – Positive Idiomas Ltda