brazil presentation august 2011. our country population: 192,278,400households: 57,037,400 mobile:...

Brazil PresentationAugust 2011

Our country

Population: 192,278,400

Households: 57,037,400

Mobile: 217 million (28M Internet access)

Internet Access: 75,900,000

Source: Ibope EDTV 2011 / Mídia Dados 2011 / Anatel / Denatran

49% 51%

USD 2,320 USD 940USD 6,400(Avg Familiar Income)

USD 500

+7.5%

+10.5%

+11.3%

R$ 1.75

+3.5%

+2.2%

+5.8%

R$ 1.70

2011Forecast*

Industrial Production

Inflation (IGP-M)

GDP (PIB)

* Forecast - Focus Report (out’11) – Banco Central do Brasil

2010Inflation

The biggest

economic concern

this year . The target

is 4.5%

Biggest growth

since 1986

Economic Scenario

1 USD

2014 World Cup held in Brazil

and Brazilian Presidential Election

2015 America's Cup held in Brazil

2012 Olympic Games held in London

Major Events

2016 Olympic Games held in Brazil

2013Confederation Cup held in Brazil

PresidentElection

Ad Market

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

7,646 7,271 7,503 8,84811,128

12,769 13,953 15,20517,139 17,818

20,97323,000

R$ MM

+9%+9%

+15%+26%

+18%+3%

-5%

+13% +4%

Source: Projeto Inter-Meios – Net figures

10%

Projection

+18%

Brazilian advertising market should see an

increase of 10% in 2011 against the 5.8%

estimate for the global.

Advertising MarketMedia investment evolution

Growth inJan-Jun 2011 x Jan-Jun 2010:

2.7%

• TV Globo• Editora Globo• Canais Globosat• Infoglobo• Sistema Globo de Rádio• Globo.com• Som Livre• Globo Filmes• Globo MarcasParticipation:

• Net Serviços• Sky

Society:• Geo Eventos (RBS)• Clickon

• Fundação Roberto Marinho• Canal Futura• Telecurso

Other Companies:• Amparo Agropecuária• Centropec• Globo Agropecuária• Mundi (travel)• Gazeus (online games)

Organizações GLOBOThe biggest

communication group in Latin America

21 20 18 17 16 16 16 16 14 12 12

2.2 2.5 5.54.8 4.3 3.7 2.8 2.7 3.0 2.9 3.2

4.7 4.6 4.44.3 4.2 4.2 4.0 4.2 4.4

4.2 4.0

10.6 9.7 9.18.3 8.8 8.6 8.5 8.5 7.7

7.5 6.9

57.3 58.7 57.359.2 59.6 59.4 59.2 58.8 60.9 62.9 63.4

1.5 1.9 1.72.2 2.3 3.0 3.4 3.7 3.7 3.9 3.8

1.41.6 1.7 2.1 2.8 3.5 4.3 4.6 4.9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Jan-Jun)

Others

Internet

Pay TV

Open TV

Magazine

Radio

Out of Home

Newspaper

Mass Media concentration increasing.Open TV - Biggest share in last 21 years!

Mass Media concentration increasing.Open TV - Biggest share in last 21 years!

Pay TV share is almost the same since 2007.

Source: Projeto Inter-Meios

Advertising MarketMedia Share %

75%TV Globo

75%TV Globo

18%Ed.Globo

18%Ed.Globo

15%Infoglobo

15%Infoglobo

25%S. Globo R.

25%S. Globo R.

15%Globo.com

15%Globo.com

51%Globosat

51%Globosat

Globo group55% of the Ad Market

Globo group55% of the Ad Market

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

7,606 8,284 9,002 10,084 10,85513,199 14,123 15,253 16,473

18,450

R$ MM

Source: Projeto Inter-Meios – Net figures

+12%+9%

+8%

+22% 7%

Projection

Open TV MarketMedia investment evolution

8% 8%

12%

+9%

Growth inJan-Jun 2011 x Jan-Jun 2010:

1.8%

Pay TV Market

Total TV Households*

54.2 MM54.2 MM

(95.1% of total HH)

Total TV Households*

54.2 MM54.2 MM

(95.1% of total HH)

Strong TV Viewership

Total Pay TV Households

11.6 MM11.6 MM > 20% of penetration

Reach projection:

38.3 MM people38.3 MM people

Total Pay TV Households

11.6 MM11.6 MM > 20% of penetration

Reach projection:

38.3 MM people38.3 MM people

Source: * 2011 projection - Ibope EDTV 2010 / Anatel Jul 2011

Pay TV Share 2010 2011*

•In Total TV: 7.1% 9.6%

•In Total Pay TV: 32.6% 33.1%

Pay TV Share 2010 2011*

•In Total TV: 7.1% 9.6%

•In Total Pay TV: 32.6% 33.1%

Source: Ibope MW / * 2011 Jan-Jul

1 in 3 channels of the package should be Brazilian

National Cinema Agency (Ancine) will be in charge of all relevant controls: production, programming and content.

The law sets that three hours and a half of national content must be broadcasted through Pay-TV weekly during Prime Time. Half of such content must be

generated by independent Brazilian producers

Legislation / New law PLC 116

The law 116 enables telecommunication operators in cable TV market without limit of participation, but keep them out of the process of content production.

+26%+26% +1%+1% +7%+7% +8%+8% +10%+10% +17%+17% +18%+18% +18%+18% +31%+31% +19%+19%

Pay TV Market Subscribers Evolution

Growth projectionGrowth projection

+25%+25%+20%+20%

+18%+18%+15%+15%

+15%+15%+15%+15%

This projection considers the trend of Brazilian

economic growth with the expansion of Pay TV

in class B2 and C, the entry of telecom

companies, the biggest offer of triple-play,

increasing the market share from 10 to 30% in

the households with television

Source: Anatel

* Estimate: PTS n.171– Pay TV Survey Report – May’2011

Pay TV Market

Source: PTS (Jun 2011) / Anatel (Jun2011)

Cable 46.9%

DTH 50.6%

MMDS 2.5%

Market Share by Groups(subscribers)

Subscribers by Technology

Globo Group70%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

299424 512

642 658809 930

1,0701,209

1,414

R$

+21%

+42%

+25%+2.5%

15%

Projection

Pay TV MarketMedia investment evolution

Growth inJan-Jun 2011 x Jan-Jun 2010:

9.86%

15% 13%

17%

+23%

Source: Projeto Inter-Meios – Net figures

Fonte: Ibope MW – 8 mercados Pay TV – Target: A AB 18-49 – Prime Time (18h – 1h) – Jan-Jun 2011

Globosat

More than 30 Pay TV channels

Good products developed for the viewers and the

advertising market

Good products developed for the viewers and the

advertising market

Source: Ibope Monitor – 2010 Net Advertising Investments with Estimated Discount – R$

1)1) Government Taxes2)2) School Holidays3)3) Mothers Day

11

22

33

44

55

66

Seasonality – Total Pay TV

Q1 Q2 Q3 Q4

4)4) School Holidays5)5) Fathers Day6)6) Christmas / Salary Bonus

Seasonality

• Instability– Pay TV still lives in an instable environment due to lack of

committed and absent costumers => Pay TV as a complementary media.

• When do advertisers make decisionsdecisions to buy advertising? In 2 extreme momentsIn 2 extreme moments::

ANUAL(NOV – DEZ)

DAILY(aprox. 20-30 days before)

Source: Carmen

Primary Day Parts

PRIME TIME : 18h – 01h

SUPER PRIME TIME : 21h – 23h

Ros

Discount Policy

Source: M&M – Agências & Anunciantes – May’2011

2010 2009

TV -54 -55Radio -62 -63Pay TV -82 -82

Magazine -61 -58Newspaper -77 -74

Movie theatre -78 -77Internet -71 -60

Average Discount applied, by media (%)Conversion Factor

MEDIADISCOUNT

Ratecards and CPR

Gender Tv Channel30" R$ - Prime Time - Ago’11

Rat% A AB 18-49 (Apr-Jul) CPR (R$)

Movies and Series Universal 5,200 0.247 21,053

Megapix 3,950 0.197 20,051 TNT 8,600 0.382 22,513 Telecine (rede)* 11,180 0.594 18,822 Space 4,000 0.135 29,630 Warner 9,000 0.277 32,491 Fox 9,300 0.333 27,928 Sony 4,400 0.105 41,905 FX 4,100 0.091 45,055 Telecine Premium* 5,008 0.145 34,538 Liv 3,340 0.044 75,909 Axn 8,000 0.142 56,338 MGM 1,500 0.021 71,429 A&E 3,850 0.048 80,208 Sony Spin 1,300 0.015 86,667 HBO 10,780 0.058 185,862

Documentaries Nat Geo 4,300 0.122 35,246

Discovery 5,800 0.155 37,419 History Channel 3,850 0.098 39,286 Bio 1,120

Varieties Viva 2,890 0.175 16,514

Multishow 3,800 0.177 21,469 GNT 3,490 0.112 31,161 E! 1,100 0.030 36,667 Glitz 1,700 0.008 212,500

Others Sportv 8,400 0.672 12,500 Globo News 7,050 0.136 51,838

Source: Jove Data – Ago’2011 – 30”Prime Time - * Dom-Seg 22h / Ibope MW – 8 mercados Pay TV – Prime Time ratings – Apr-Jul 2011

Selling Strategy

FOX•Production of capsules, special and integrated promos

•Structured Digital and sometimes integrated with channels

•Fox is the leader on sales and helps all the other channels

Turner•Two big channels with large audiences TNT and Warner

•Many difficulties in selling Glitz, TCM and Boomerang

•Market has already noticed Space as a growing channel

•Production of capsules and integrated promos in a simple way

Discovery•Good image in the market due to the positioning of the channels without

impact on sales (based in Discovery Channel)

•High level on product integration (Nestlé, J&J, Peugeot)

Selling Strategy

Globosat•Very aggressive using the same strategy of Rede Globo (Brazilian content,

share of audience and incentives)

•Good products developed by the viewers and the ad market

•Owns all the sports rights ( soccer and etc )

•Special projects, different formats, brand content

MTV•Totally produced for Brazil

•Extremely flexible in the negotiation and production of the different formats

•Brand content and big events (Video Music Brasil)

SPT•Recognized for presenting special projects

•Offer creative solutions in developing different formats

•Easy to work with, flexible and a good partner

Top 3 CompetitorsMain Targets

People 18-49 People 25+

People 18-49 Women 18+

Men 25-49 People 18+

Women 25-34 Women 18-49

Men 25+ Men 35+

People 25+

Women 18-49 People 18-49

Young- 12-24

• Share of Audience – Rating Distribuition

Pay TV Dynamics

2010 2011 (jan-jul)

GLOBOSAT37.0%

DISCOVERY12.6%ESPN

2.3%

FOX9.4%

SPT6.8%

HBO3.9%

DISNEY6.4%

VIACOM3.0%

TURNER18.7%

Pay TV Ranking

  Ano 2011 Jan-Set  Faixa Horária 18:00:00 - 25:00:00  Target P AB 18-49 c/ pay tv

RK Product of rat% {Media(Pond)} Emissora Total

1 SPORTV 0.5922 TNT 0.3613 DISCOVERY KIDS 0.3534 FOX 0.3195 WARNER CHANNEL 0.284

6CARTOON NETWORK 0.245

7 DISNEY CHANNEL 0.2428 MULTISHOW 0.228

9UNIVERSAL CHANNEL 0.226

10 MEGAPIX 0.20011 SPORTV 2 0.19812 TELECINE PIPOCA 0.19313 VIVA 0.164

14DISCOVERY CHANNEL 0.148

15 TELECINE PREMIUM 0.14416 GLOBO NEWS 0.13417 SPACE 0.12618 AXN 0.124

19NATIONAL GEOGRAPHIC 0.123

20 NICKELODEON 0.10421 FX 0.10322 GNT 0.09923 SONY 0.093

24THE HISTORY CHANNEL 0.090

25 TELECINE ACTION 0.08726 DISNEY XD 0.08527 DISC. HOME & HEALTH 0.08328 ANIMAL PLANET 0.07229 ESPN BRASIL 0.06530 TELECINE FUN 0.06231 ESPN 0.05932 HBO 0.05633 BOOMERANG 0.05634 TELECINE TOUCH 0.05535 LIV 0.04736 A&E 0.04537 HBO 2 0.04338 TCM 0.03839 CINEMAX 0.03740 MAX HD 0.036

  Ano 2011 Jan-Set  Faixa Horária 18:00:00 - 25:00:00  Target WAB 18-49 c/ pay tv

RK Product of rat% {Media(Pond)} Emissora Total

1 DISCOVERY KIDS 0.4022 SPORTV 0.3733 TNT 0.3014 FOX 0.2935 DISNEY CHANNEL 0.269

6UNIVERSAL CHANNEL 0.261

7 WARNER CHANNEL 0.2528 MULTISHOW 0.231

9CARTOON NETWORK 0.225

10 MEGAPIX 0.19511 VIVA 0.18412 TELECINE PIPOCA 0.16513 SPORTV 2 0.13914 AXN 0.13215 GLOBO NEWS 0.12616 GNT 0.12017 TELECINE PREMIUM 0.11918 SPACE 0.11719 SONY 0.11020 NICKELODEON 0.10821 DISC. HOME & HEALTH 0.104

22DISCOVERY CHANNEL 0.095

23NATIONAL GEOGRAPHIC 0.091

24 FX 0.08425 DISNEY XD 0.07226 BOOMERANG 0.07127 ANIMAL PLANET 0.06328 TELECINE ACTION 0.06129 TELECINE FUN 0.05630 LIV 0.05531 TELECINE TOUCH 0.054

32THE HISTORY CHANNEL 0.054

33 E! ENTERTAINMENT 0.04634 HBO 0.04535 HBO 2 0.04436 A&E 0.04237 FUTURA 0.04038 RECORD NEWS 0.03939 TV CAMARA 0.03740 CINEMAX 0.036

  Ano 2011 Jan-Set  Faixa Horária 18:00:00 - 25:00:00  Target P AB 18-34 c/pay tv

RK Product of rat% {Media(Pond)} Emissora Total

1 SPORTV 0.5302 DISCOVERY KIDS 0.3843 WARNER CHANNEL 0.3234 TNT 0.3195 FOX 0.304

6UNIVERSAL CHANNEL 0.248

7 MULTISHOW 0.244

8CARTOON NETWORK 0.224

9 DISNEY CHANNEL 0.22110 SPORTV 2 0.17511 MEGAPIX 0.17112 TELECINE PIPOCA 0.15913 VIVA 0.130

14DISCOVERY CHANNEL 0.117

15 TELECINE PREMIUM 0.11116 SPACE 0.10817 GLOBO NEWS 0.10818 FX 0.09919 SONY 0.099

20NATIONAL GEOGRAPHIC 0.096

21 AXN 0.08422 ESPN BRASIL 0.08123 GNT 0.07824 NICKELODEON 0.077

25THE HISTORY CHANNEL 0.076

26 DISC. HOME & HEALTH 0.07327 ESPN 0.07328 ANIMAL PLANET 0.06429 DISNEY XD 0.06330 TELECINE ACTION 0.05931 BOOMERANG 0.05632 TELECINE FUN 0.05433 HBO 0.04234 LIV 0.04235 A&E 0.04236 E! ENTERTAINMENT 0.04137 TELECINE TOUCH 0.04038 HBO 2 0.03939 TV SENADO 0.03140 Tv Justiça 0.030

Fonte: IBOPE MW – 8 maercados Pay TV – Jan-Set2011

Thank you!