V I D E O • A G E Ja n u a r y 2 0 1 1 24 (Continued on Page 25) (Continued from Cover) Caracol’s Telenovela Unfolds than 100 companies, became the main shareholder of Caracol Televisión. Caracol (Cadena Radial Colombiana) and RCN (Radio Cadena Nacional) are Colombia’s two main private TV channels which, in 1997, were granted licenses to operate as national networks. Before that, the two companies provided content for Intravisión, a state-owned TV broadcaster: Caracol 45 hours a week and RCN 10.5 hours a week. Something like four different commercial programmers today fill the schedules of Intravisión’s national public network Canal Uno with 32 hours of weekly programming each. A third national TV commercial network, Canal 3 Television de Colombia, was launched last October, but it is not yet operational. Running Caracol today is Julio Mario’s younger son, the 34-year-old New Yorkborn Alejandro Santo Domingo Dávila, from his offices in New York City. His oldest son, Julio Mario Santo Domingo Jr., who was born in Paris, died in 2009 at the age of 51. The oldest daughter of Santo Domingo Jr., Tatiana, is the girlfriend of Andrea Casiraghi, the second in line as Prince of Monaco. Julio Mario Sr.’s first wife was Brazilian, his second, Alejandro’s mother, Colombian. The Santo Domingo family is very cosmopolitan with Julio Mario Sr. educated at the University of Virginia, Julio Mario Jr. at Columbia and Paris universities and Alejandro at Harvard. EvenCaracol’s 57-year-oldCEO, Paulo Laserna Phillips, displays an impressive cosmopolitan resume. A journalist and a TV host, he studied political science in Paris, management in Los Angeles and got his Masters degree at Harvard. In addition to running the network, Laserna is the host of the Colombian version of Sony Picture’s Who Wants to be a Millionaire. The Caracol TV group runs the TV network, the international satellite TV signal (covering the Americas and Spain) and international TV sales from its headquarters in Bogotá, with regional offices in Miami, Florida and Madrid, Spain. Since 2006 Caracol has controlled Spanish-language TV station WGENTV, Channel 8 in Miami. Control is possible thanks to Alejandro and his younger brother Andrés SantoDomingo’s U.S. citizenships together with that of his maternal cousin, Carlos Alejandro Pérez. Alejandro Santo Domingo and Pérez are also partners in the New York-based Quadrant Capital Advisors. Colombia is a country whose people are heavily committed to television, which is accessible to 99 percent of its 46.3 million people, with cable-TV available to 74.6 percent of the urban residents. The main private commercial networks reach 86 percent of the Colombian population utilizing a total of 134 repeaters. The market for Colombia’s 10.6 million TVHH is highly competitive with six national broadcast TV networks, eight regional terrestrial networks and a popular local TV broadcast channel, CityTV in Bogotá, which has the country’s third largest viewership. This in addition to 16 cable-TV channels received by more than 4.5 million subscribers, or about 42 percent of TVHH that, in 2010, generated U.S.$197 million in subscription fees and U.S.$8 million in PPV charges (it is also estimated that close to three million TVHH receive pirated cable-sat signals). In terms of audience, Caracol has a slight advantage over RCN with 84 percent of viewers tuning in daily, versus 82 percent for RCN, 35 percent for CityTV and 19 percent for Canal Uno. These four commercial TV channels split an estimated U.S.$575 million in national advertising revenues in 2010, a 24 percent increase from 2009, with the bulk, or $472 million, shared between Caracol (U.S.$231 million) and RCN (U.S.$240million). The regional TV stations took in U.S.$178 million in ad revenues, while U.S.$65 million went to the cable-TV networks. In total, television in Colombia captured 62.2 percent of all advertising revenues. In terms of programming, in 2010 Caracol invested an estimated U.S.$100 million, versus $146 million by RCN, but in terms of gross profit, Caracol was ahead with $127.4 million, versus RCN’s $94.78 million. In addition, Caracol’s U.S. radio-TV operations generated an estimated $10 million a year. Foreign program sales brought in an estimated $2.4 million in 2010 exporting worldwide 16,000 compounded hours of Caracol-made content, and the international satellite TV signal $800,000. Running a commercial TV network is an expensive enterprise. When, in 1997 authorizations were granted to Caracol and RCN, the license fee was 117 billion pesos (about U.S.$19 million) each. At renewal time, in 2008, CNTV, the state TV authority, was asking each network for the equivalent of U.S.$82 million for the 10-year extension, but after Caracol threatened to shut down its transmitters, CNTV determined that the renewal fee will be established during 2011, in accordance with the final results of the total advertising expenditures for 2009 and 2010 in Colombia. Q&A With Alejandro Santo Domingo VideoAge: How do you see the future for over-the-air broadcasting in Colombia? Alejandro Santo Domingo: Despite the penetration of cable, we believe that free television still has a few good years left. Big events and programs with exclusively local relevance, for example, will continue to be transmitted through free television. On the other hand, now that there is a new space opening up with the arrival of DTT, there will be more opportunities to break into the territory of segmented audiences and a greater ability to test new formats, which will give the entertainment business a very interesting twist. VA: Are there any new revenue streams for Caracol? (In the U.S., stations have advertising and retrans fee.) ASD: We believe that this should be a goal for free television channels in Colombia. It does not make much sense for cable and satellite companies in this country to give a re-transmission fee to [cable-TV] channels that have, at the most, a three percent share [while] nothing is given to those who hold a 30 percent share or more. VA: In the long run, which do you see remaining: Over-the-air TV, appointment television or TV on demand? ASD: TV on demand will surely have a greater acceptance in the near future when different operators can make it more accessible to more users, and as these operators reach agreements that make sense for content generators like Caracol. It is more and more evident that TV viewers are looking for the flexibility of watching what they want, when they want. This is especially true for younger audiences, who are less patient and definitely multitaskers. However, appointment TV will continue to exist because live events are irreplaceable and because there is still an audience that is used to watching television in a traditional manner. VA: What is your next area of TV expansion? ASD: We are always looking at opportunities. In 2006 we acquired Gen-TV, a full-power station in Florida, which would serve as a first step in the consolidation of a network with the idea of penetrating the U.S. Hispanic market. VA: Do you attend TV trade shows such as NATPE, MIP, L.A. Screenings, etc.? ASD: I haven’t had the chance yet, but it is one of my objectives for [2011]. Q&A With Angelica Guerra VideoAge: How many new programs — hours or number of series and specials — are put on sale each year? Angelica Guerra: In general terms, we are producing five telenovelas, three series and two specials a year. This adds up to more than 1,000 hours of drama production annually. VA: Which are the key sales territories for Caracol Int’l? AG: Obviously, Latin America is our natural market. The cultural affinity makes the product function well in all of the Spanish-speaking countries. Another strong territory for us is the Hispanic market in the United States, which has been strengthened with the agreement we signed with Telemundo. The Colombian telenovela has developed its own brand established throughout the Americas, allowing Caracol to have a permanent presence on the majority of television screens in the region. VA: Which are the new territories that the company is focusing on? AG: Definitely Africa is one of our strategic markets. We have discovered that our products function well there. Plus, there is a large market with many countries ready to exploit the content we produce. We are also focusing on Eastern Europe, where the telenovela has been in large demand because it is valued as a successful genre. Pictured above are Caracol’s Lisette Osorio and Angelica Guerra.
RkJQdWJsaXNoZXIy MTI4OTA5