Brazil has some of the heaviest media consumption per capita on the planet, especially in entertainment and social media. With more than 130 million users on Facebook and 120 million on WhatsApp (in a country of 210 million people), Brazil is a fertile ground for digital media disruption. Start-ups and international media outlets have now inserted themselves in this changing landscape, with their biggest competitor being WhatsApp.
Here are the five major digital media trends publishers need to know about in 2019:
1) Brazilians are consuming ever more digital media
According to a 2018 study by WARC, Brazilians spend more time on social media than in music streaming services and online TV streaming combined.
This transition to digital, especially in a large and growing entertainment market is expected to grow further, according to a prediction by Statista, from $34.9 billion dollars in 2016 to $43.72 in 2021. Furthermore, Brazilians currently spend 65% of their daily media consumption online, a number that has been steadily increasing.
However, in the transition from television to small screens, WhatsApp is perceived as a trustworthy news source, although much of the news that circulates through its groups are hoaxes. According to a 2016 study conducted by the Brazilian fact-checking agency Lupa, only two of 50 images that circulate around group chats on WhatsApp are true.
This inability to distinguish fake news has become a challenge for digital media companies who want to establish a foothold in the Brazilian market, especially at a time when trust in media is decreasing.
2) Bolsonaro supporters are skeptical of the mainstream media
The Brazilian media is traditionally partisan. Traditional outlets like Globo are owned by families that have had a direct impact on the country’s politics. For example, Globo’s Roberto Marinho was a huge influence on the 1964 military coup.
But the current far-right president Jair Bolsonaro has adopted a Trump-style approach to the traditional media, claiming it is fake news and against his presidency. Even more pressing, Globo’s media empire is starting to fall. According to Statista, it witnessed a 50% decrease in net worth from 2015 to 2016.
The environment of rapidly spreading fake news is especially concerning because 60% of voters use WhatsApp, with 61% of Bolsonaro’s supporters more likely to follow news on the app. During the 2018 elections, WhatsApp’s parent company Facebook and Google partnered with Comprova, a fact-checking agency, to tackle the problem and bring more awareness to the issue.
With the trust crisis becoming ever more pressing, traditional media now faces a steep uphill challenge. If it does not innovate – in both its business models and news coverage – it is likely to disappear. On the other hand, this crisis is opening the way for new, innovative digital media.
3) The biggest media company in Brazil (and one of the biggest in the world) is losing the entertainment battle to Netflix
Globo is the biggest broadcasting company in Brazil, having more market share than all of the other broadcasting companies combined. Besides television, Globo also owns newspapers, magazines and radio stations, making it a media oligarchy in the country. Besides journalism, Globo is a huge content creator of telenovelas, or soap operas. In fact, Globo’s massive media dominance allowed them to start exporting the telenovelas to countries like Portugal.
However, as digital media has started to make its mark in the country, Globo has tried unsuccessfully to compete, notably with Globo Play and other apps.
Netflix, in particular, has stormed into a commanding position and is now Globo’s biggest competitor not least with its original content such as “3%,” “Narcos” and most recently “The Most Beautiful Thing.” Brazil is currently Netflix’s 2nd biggest market internationally. In fact, Netflix has four times more market share than Globo Play, Globo’s entertainment streaming app to compete with Netflix.
4) Digital media business models still have a lot of ground to break
Traditional media in Brazil has always relied on advertising revenue, especially Globo. And although audience levels are starting to decrease, ad revenue is expected to continue to grow. At a time when American media companies are struggling with advertising transitioning to tech platforms, this is not the case currently in Brazil – digital ad revenue remains hugely relevant for Brazil’s legacy media.
It is possible that WhatsApp’s high usage yet lack of a traditional advertising revenue model is one of the factors for the longevity of ad-funded media amongst Brazil’s traditional media.
However, whilst there is a current boom of digital start-ups in the country, across many sectors including media, it could be a while before new business models break-through to replace existing ad-funded models.
5) High-quality digital media companies are growing
Whilst international media like BuzzFeed and Netflix already occupy much of the market share of digital media in Brazil (and are set to grow even more), new independent media companies are starting to spring up.
Nexo, Ponte and Agência Pública are ones to keep an eye on. Nexo has a membership program and Ponte and Agência Pública are both nonprofits. None of them covers breaking news per se but focus on in-depth, long-form journalism. Nexo, in particular, stands out – it has a specific focus on explaining policies and political events, and creates a daily newsletter with what readers need to know before starting their day. Nexo is currently a finalist of the World Digital Media Awards alongside newspapers such as The Guardian and the Washington Post.
Renata S. Geraldo, business journalist and reporter