economist.comhttp://www.economist.com/news/business/21603472-brazils-biggest-media-firm-flourishing-old-fashioned-business-model-globo-dominationGlobo dominationGlobos not so little piece of the ratingsWHEN the football World Cup begins on June 12th in Brazil, tens of millions of Brazilians will watch the festivitieson TV Globo, the countrys largest broadcast network. But for Globo it will be just another day of vast audiences.No fewer than 91m people, just under half the population, tune in to it each day: the sort of audience that, in theUnited States, is to be had only once a year, and only for the one network that has won the rights that year tobroadcast American footballs Super Bowl championship game.Globo is surely Brazils most powerful company, given its reach into so many homes. Its nearest competitor infree-to-air television, Record, has an audience share of only about 13%. Americas most popular broadcastnetwork, CBS, has a mere 12% share of audience during prime time, and its main competitors have around 8%.In this sectionReprintsThe company started in Rio de Janeiro with a newspaper,O Globo, in 1925, and was built by a visionary andlong-lived media titan, Roberto Marinho, who died in 2003 at the age of 98. As it grew in the television age, Globohas arguably done as much as any politician to unite a vast and diverse country, from the Amazonian jungle to theheart of coffee-growing country, from wretched favelas on the urban periphery to the fancy boutiques of downtownRio and So Paulo. Today it is controlled by Mr Marinhos three sons and towers over Brazil like Rios Christ theRedeemer statue. It is the largest media company in Latin America, with revenues that reached 14.6 billion reais($6.3 billion) in 2013, having climbed impressively over the past decade. As a powerful, family-owned media firm,it looks like a local version of Rupert Murdochs News Corporation, without the family drama.Globo counts pay-TV stations, magazines, radio, film production and newspapers as part of its empire, but most ofits profits come from its broadcast network, which airs salacious telenovelas, or soap operas, that are always thetalk of Brazil. In richer countries the habit of appointment viewing has declined with the spread of digital videorecorders, but Brazilians still tune in devoutly for the three telenovelas that run each evening, six days a week.Globo airs Brazils snazziest and freshest shows, yet its business model feels decidedly old-fashioned. Itsprogrammes are filmed on its own vast studio lot, called Projac, nestled among forested mountains on the edge ofRio. Actors and writers are on contract, just as they were in the early days of Hollywood. Workers stitch lavishcostumes and build intricate sets on site, like those of Meu Pedacinho de Cho (My Little Patch of Land), oneof the current soaps, a fantastical tale about a small town seen through a childs eyes (pictured). The telenovelaformat can be adapted to audience feedback, and plots can be changed on the fly depending on what viewers like.Globo executives obsess over the real-time audience figures streamed to their offices. If ratings decline a tenth ofa percent, you feel this building shake, one of them says. For advertisers wanting to get a message to a nationalaudience, it is the obvious choice. Globo knows this, and is estimated to have raised its rates for prime-time spotsby nearly 60% since 2010.Setting the standardNot everyone is comfortable with Globos good fortune. Critics are unsettled by the firms share of advertising andaudience. It controls everything from Brazilians access to news to the market rates for journalists salaries. Evenentertainment shows can be remarkably influential. Salve Jorge, a recent soap set in Turkey, prompted hordes ofBrazilians to take holidays there. Its programmes also shape the national culture. This year it aired what itbelieves was the first gay kiss on a broadcast network.Elsewhere in Latin America big media companies are in the midst of real-life dramas. Argentinas Grupo Clarn isbeing carved up by the government, and Mexico is trying to make Televisa slim down. But Brazils government ismore docile towards media owners. It helps that the Marinhos tend to adapt to the political climate. Mr Marinhowas a staunch supporter of the countrys 1964-85 military dictatorship; today his sons live in a more liberal,democratic Brazil and stay out of the public eye. Last year they ran an apology for their fathers politics in theerrors section of O Globo.Brazil does not have a tradition of sequels and prequels, and popular telenovelas are always killed off after a fewmonths to make way for new ones (Meu Pedacinho is a rare remake). Likewise, for two decades people havepredicted that Globos heady success would come to an end as Brazilians look for entertainment elsewhere. So farit has defied them. Sir Martin Sorrell, the boss of WPP, an advertising firm, points out that, as in Japan, traditionalmedia in Brazil are like a fortress and continue to hold strong in spite of the incursions of new entertainmentsources.Because Brazil has lagged media trends in rich countries, Globo has been able to watch foreign firms mistakesso we dont have to make them, says Roberto Irineu Marinho, the groups boss. But internet use has taken off inBrazil, and will alter consumers viewing habits over time. Today Brazil has more mobile phones than it haspeople, and penetration of pay-television has slowly crept up to around 28% of households. In April Braziliansspent around 12.5 hours a week on online social networks from their desktop computers, more than double theglobal average, according to comScore, a research firm. For the first time in Globos history it is facing seriouscompetition for advertisers and audience. Increasingly, Brazils advertising market will be a contest between thetwo Gs: Globo and Google.Globo is still the biggest fish in a big pond, and can keep a hold on Brazilians attention, even as they migrate tonew platforms. For example, as more households can afford pay-TV packages, Globo may lose viewers from itsfree-to-air network, but should gain when they tune in to the groups paid-for channels. It is experimenting withnew online offerings, such as letting people subscribe for a monthly fee to view its content online with a timedelay.We dont want to jeopardise our advertising revenues by changing peoples habits, but we have to be ready,says Jorge Nbrega, a senior Globo executive. Netflix, an American online-video firm, has entered Brazil, butGlobo-boosters argue that Brazilians prefer telenovelas to foreign fare. In television, as in football, they are likelyto keep rooting for the home team.