Argentina
Contributed by Joaquín Serpe (Concordia University)
Updated August 2018
Key Takeaways
Argentina remains proportionally one of the biggest media markets in Latin America. Pay-TV penetration is in decline, while internet TV services and subscriptions to OTT video services are on the rise.
Regulatory frameworks switch dramatically between protectionist and open-market policies as governments change. Administrations are currently unwilling to reach common ground on industrial development policies, nor do they seem eager to enforce intellectual property rights.
Argentina is a media market concentrated primarily in three multimedia groups (Grupo Clarín, Telecom and Telefónica) which currently face little-to-no pushback in owning TV stations, ISPs, radio stations and newspapers, despite past governmental efforts to break up this concentration.
Seven years after its arrival to the country, Netflix released its first original fiction Argentine series Edha in 2018, alongside several stand-up shows of local comedians. The portal is also working on the production of new domestic content.
Market
Netflix arrived in Argentina on 7 September 2011 – two days after Brazil and on the same day as Paraguay and Uruguay[1] ̶ as part of its first wave of expansion beyond North America. Even if not as populated as Brazil and Mexico, Argentina shows some of the most auspicious media penetration rates in the region. For a country with an estimated population of almost 45 million inhabitants, television is the dominant medium with a 97% penetration of homes, with Pay-TV reaching 74% of homes (the highest rate in Latin America), out of which 82% are cable system subscribers and 18% subscribe to satellite services.[2] Internet connectivity is on the rise, with a penetration of 79.4% in 2016, the highest percentage of Latin America in which the overall population of a country goes online.[3] Mobile phone service penetration stands above the region’s average with a 90% unique subscriber penetration rate and 61 million mobile connections by 2015. When Netflix set foot in Argentina, Cristina Fernández de Kirchner’s administration was in the midst of a ferocious campaign to regulate the national media landscape, curtail the power of corporations, and strengthen the public sector and independent producers.
The Argentine Media Landscape
The recent history of the legal Argentine media context shows a push and pull between public and private, regulation and deregulation. The military dictatorship of 1976 created the Broadcasting Federal Committee (Comité Federal de Radiodifusión) in order to control both the infrastructure and content of television. This law also enabled the process of accumulation of broadcasting licenses to a maximum of four to the same person or legal entity. According to Silvio Waisbord and Sofia Jalfin, the result of state intervention was that “the television market remained closed, under-funded and highly vulnerable to the changing winds of Argentine politics as sitting administrations exercised discretionary control over programming and funding.”[4]
The 1990s were characterized by a concentration of production and distribution in the major national companies as well as by the internationalization of the television industry. Even while international content started to flow freely into the country, particularly through cable services, domestic production increased, dominating with the most widely watched programs. The contemporary Argentine television industry has been (and still is) characterized by strong competition between the two major networks, Canal 13-Artear (owned by Argentina’s main media conglomerate Grupo Clarín) and TELEFE (property of the international Spanish telecommunications provider Telefónica).
During Fernández de Kirchner’s administration (2007-2015), the government intervened in the national media landscape in an attempt to break this oligopolistic predominance. As Rodríguez and Carboni claim, “the regulation of audiovisual media became part of the government’s agenda.”[5] In 2009, a new law called the Audiovisual Communications Services Act (Ley 26.522 de Servicios de Comunicación Audiovisual or simply known as Ley de medios) was enacted, that limited the accumulation of broadcasting licenses and forced oligopolistic groups to divest.[6] The Ley de medios established national production quotas and dismantled the Broadcasting Federal Committee created by the military, and replaced it with the Federal Audiovisual Communications Service Authority (Autoridad Federal de Servicios de Comunicación Audiovisual – AFSCA)[7]. Simultaneously, the state made important investments in both the creation of new channels and the infrastructure to access their content. That same year, the government implemented the Japanese-Brazilian Integrated Services Digital Broadcasting standard for national television.[8] Through the MiTV digital program, set-top boxes (STBs) were distributed at no cost to adapt old television sets to digital technology. Within the framework of the program Conectar Igualdad, the government also distributed laptops to students and teachers at the primary and secondary levels of education.
Similar to television, the internet service provider (ISP) market is highly concentrated. Grupo Clarín’s Cablevisión-Fibertel, Telecom’s Arnet and Telefónica’s Speedy share over 90% of the market. Despite being one of the largest Latin American markets, 4G and fixed-internet speeds remain significantly low in the region and the world, as the Speedtest and the OpenSignal reports have shown.
Argentina presents a high flow of pirated media content with widespread optical disc copyright and internet piracy. Since 1996, the country has been on the Priority Watch List of the Special 301 Report, a document prepared annually by the Office of the United States Trade Representative (USTR) that identifies the countries that do not properly enforce intellectual property rights. In fact, Argentina is the birthplace of two major websites for pirated television and cinema content, PopCorn Time and the now-defunct Cuevana. In this sense, it has been pointed out that Netflix came to compete with Argentina’s media piracy as well as with its legal media markets.
Early Netflix
Netflix arrived in Argentina in 2011 with an initial monthly subscription rate of US $9, a price that has remained more or less the same, despite the country’s strong and fluctuating inflation. This price is one of the highest in the region. Netflix’s monthly fee for countries like Uruguay, Paraguay, Bolivia, Perú and Ecuador is lower, at US $7.99. Even with the higher rate, Argentine subscribers were generally pleased with the value of Netflix; it was cheaper than renting via video clubs and its quality was more dependable and predictable than the pirated material that one might otherwise download or buy on the street. For a country with slow internet connection, Netflix’s encoding and network infrastructure allowed the service to function with minimal interruptions and with relatively high streaming quality. Early users also appreciated its simple interface that could be accessed through a variety of devices (computers, TV sets, smart phones, and tablets).
Users nevertheless identified a few downsides to the service, mostly having to do with the selection of content rather than the platform itself. Not only were the films limited, dated, and released before 2009, there was almost no regional TV content (with the exception of Damián Szifrón’s Los Simuladores). On top of this, the television offerings were sparse and incomplete, often missing multiple seasons. Some titles were offered in HD quality, but most of the catalogue could only be accessed in SD. Finally, most foreign-language films were dubbed without the possibility of subtitles, which presented a problem for a country so accustomed to reading subtitles. Netflix identified these problems rapidly, and followed through on their promises to rectify the issues, even though it could do little to address user complaints about credit card-only payment.
Netflix Today
Today, Netflix Argentina has been drastically transformed. It currently has dedicated sections for Argentine series and films, including both classic and contemporary titles. While offering well-known television and cinema hits, the catalogue also features a wide variety of domestic content that might have otherwise gone under the radar. In particular, Netflix has acquired several independently produced films that either had a modest success or were box office flops featuring famous Argentine actors such as Norma Aleandro, Diego Peretti, Rodrigo de la Serna, and Leticia Brédice. The service has also included in their catalogue various independent medium-to- low budget films with limited release including a title called La sangre del gallo (Eric Dawidson and Mariano Dawidson, 2015), which was partially funded via the Argentine crowdsourcing website Ideame.
In 2018, Netflix released their first locally-produced fiction series Edha, directed by the well-known director Daniel Burman and starring the moderately famous Juana Viale. Critical reception for the series has been dramatically poor, and detractors have focused their ire on problems with the script, the plotline, and the acting – especially Viale in the lead role. As part of its plan to support local comedians, Netflix has also released six stand-up comedy hours, featuring local media personalities Sebastián Wainraich (Sebastián Marcelo Wainraich) and Malena Pichot (Estupidez Compleja), to name a few, which have been received positively. Netflix has also announced plans to release three more Argentine productions in 2018: a musical telenovela for teenagers (Go! Vive a tu Manera), a documentary on car-racer Juan Manuel Fangio (Fangio: El hombre que domaba las máquinas), and a short documentary series on local soccer team Boca Juniors as they prepare for the coming season (Boca Juniors: La pretemporada).
By 2017, it was estimated that Netflix had almost 850, 000 subscribers in Argentina, making it the most popular audiovisual OTT service. According to the Argentine Chamber of Internet (CABASE),Netflix, together with Google and Facebook account for 80% of the internet traffic.[9] Given its popularity, Telecom Argentina started an alliance with Netflix providing three months to access the platform without extra charges for Telecom’s premium mobile and internet users.
Regulatory issues
As part of the government’s plan to tax digital services like video OTTs or Spotify, Netflix started paying 21% VAT (value added tax) as of June 2018. Policy makers are also starting to debate different types of regulation that can be imposed on Netflix and other digital platforms. The most salient projects include the imposition of quotas for domestic productions, and the use of a part of the revenues generated in the country for the production of Argentine content. For example, the Argentine Chamber of Medium and Small-sized Audiovisual Production Companies (CAPPA) has recommended that video OTTs allocate 20% of their billing to the purchase or production of Argentine content, out of which 50% has to be produced by independent. In response, the Television Association of Programmers (TAP) – representing Sony Pictures, NBC, Fox, Turner Walt Disney and Viacom – and the Motion Picture Association of America (MPAA) have started to contest these plans and their feasibility.
In response, Gustavo Pupo-Mayo, the president of the board of TAP Latin America, stated that any legal framework regulating media production and distribution should take into account that “in a democratic society, which aspires to a free-market economy, it is fundamental to avoid obstacles that prevent, limit, or censor content and the promotion of goods and services.” Therefore, national content quotas should be eliminated as they are “discriminatory and protectionist practices that attempt against a competitive environment” and “they result in low quality productions that are only there to abide to the law.”
Local platforms
There are a number of other VOD platforms that make up the Argentine digital media landscape. In 2015, the National Institute of Cinema and Audiovisual Arts (INCAA) and ARSAT – the state’s telecommunications company – launched an online platform for streaming Argentine series and films, initially named Odeon, now Cine.Ar Play. This can be accessed free of charge. This is the second most popular service with an estimated 477, 944 users. The third and fourth place in the rankings are respectively occupied by Telefónica’s OnVideo (121.065 users), and Qubit.tv (49.850). Both of these streaming VOD services were released right before Netflix arrived in the country in a bid to compete with it.
OnVideo’s strategy was to offer new releases as well as domestic films and series, while Qubit.tv focused on appealing to art-house and auteur cinema spectators. Other VOD platforms that one can access in the country include Mubi and Vesbi, and those created by various Pay-TV providers and channels such as DirecTV Ondemand, ESPN Play, Fox Play, HBO Go, Movie City Play, HOT GO, Space Play or TNT Plus. In addition to Telefónica’s OnVideo, the other major telecommunications companies have also developed their own online video platforms for their users to access. These are Telecom’s Arnet, América Móvil’s Claro Video, and finally Grupo Clarín’s Cablevisión Flow, which has the largest offering of live content in Latin America.
Notes
[1] Netflix staggered their release dates throughout the region in September 2011. For the precise reléase dates in Latin America, see https://hd-report.com/2011/09/06/netflix-begins-latin-america-rollout/
[2] Miranda, Carla Rodríguez, and Ornela Carboni. “Communications Policies and the Production of Audiovisual Content in Argentina.” Latin American Perspectives, vol. 45, no. 3, 2018, pp. 44–54.
[3] Company Profile -Telecom Argentina S.A. MarketLine, 2017, pp. 1–28.
[4] Waisbord, Silvio, and Sonia Jalfin. “Imagining the National: Television Gatekeepers and the
Adaptation of Global Franchises in Argentina.” TV Formats Worldwide: Localizing Global Programs. Chicago: Intellect, 2009, pp. 55-74.
[5] Rodríguez and Carboni, 47.
[6] This law has been partially overruled by Mauricio Macri’s government.
[7] This authority has been dismantled and the National Communications Agency (Ente Nacional de Comunicaciones – ENACOM) has been put in its place.
[8] Rodríguez and Carboni, 47.
[9] Following worldwide trends, video (films, series and video clips) is the top producer of data transfer in Argentina.