Winter is Coming for shows like Game of Thrones in Brazil
Winter has not just started in the southern hemisphere but it might also start soon for millions of Brazilian TV viewers. One piece of regulation might soon be responsible for shows such as Game of Thrones and sports events such as the UEFA Champions League disappearing from our TV screens. If politics don’t act quickly we might jeopardize Brazil’s long-term competitiveness in digital services.
Digital, media, and telecommunications markets converge all over the world. There is no clear barrier anymore between these sectors, but a unique converged market has formed. Players in this market are more diversified and bigger in market size than previously and the competition is completely different from the past.
New operators are growing thanks to mergers and regulators have to have a different approach on that point.
The Brazilian example, in contrast, shows that regulation is holding the digital single market back, and significantly limiting the further development of the “market of the future”, as the digital market is often labeled.
As in other sectors of the economy, Brazil has to have the target to create a single digital market, in which operators can integrate content and channels in order to provide better and more comprehensive media services to their customers. This very needed necessity is currently legally not possible in Brazil.
In particular one piece of legislation from 2011 mergers between telecommunications companies and audiovisual content distribution and licensing companies in the PayTV market.
This article is considered anachronistic even by the President of Brazil’s telecommunications regulator ANATEL “because it is going against the convergence that it is developing in the new digital ecosystem”.
The regulation is not only affecting an important opportunity for Brazil, that being the merger between AT&T and Time Warner, but it also affects the possibility of the country to continue to attract investors, leading to a faster and development of the digital and more services provided to consumers.
A 21st century digital ecosystem is considered a market where all the players of the digital arena are able to have fair competition, thanks also at the development of the 4G and 5G connections.
The Brazilian mobile data market is developing very well and 4G technology is widely adopted. This helps to facilitate the change of the market with more than 130 million users of mobile high speed internet connections
The arrival of 5G in the next few years will ignite an even faster vertical integration between different sectors as it was told by Leonardo de Morais, President of ANATEL.
It is an anachronistic idea that the market could be segmented by subcategories such as phone calls, advertisement, or content as in the past. The role of the authorities has to change due to this new reality. Fair competition has to be intended not only in a classic view, but also between operators in different sectors that are now competing directly: a classical example is competition between Over the Top (as Amazon Video or Netflix) and PayTV providers.
Being attractive to foreign investments, is highly important in a global industry such as the digital and media markets, and a key element for the success of the development of new services for consumers.
A 21st century digital ecosystem in Brazil is only possible if the ban of vertical integration is repealed. Otherwise consumers will lose by either having less TV channels or less content available on PayTV.
By Fred Roeder, Managing Director of the Consumer Choice Center, Professor Andrea Giuricin, and Andre Freo Gerente de Operações of CESCO. Both have published a policy note on this issue as well that can be found at www.chegadebarreiras.org