Argentina is a dual country. With over 40 million inhabitants, it is one of the largest economies in Latin America, after the two giants in the region, Brazil and Mexico. It also ranks among the largest economies in the world (21st, according to World Bank estimates), which allows the country to be member of the G20 and to have hosted the G20 Leaders’ Summit in 2018.
Yet, the country has one of the highest poverty (27.3%) and unemployment (over 9%) rates in the world, according to data of the first half of 2018 provided by Argentina’s National Institute of Statistics and Census (INDEC). It is also one of the countries with the highest debt in the region, which accounts for 80% of its GDP, according to private estimates. Inequality has also increased. INDEC estimates for the second quarter of 2018 show that the richest 10% earns 18 times more than the poorest 10%.
Businessman Mauricio Macri took office in 2016 with the support of the markets and under the promise of “reinserting Argentina into the world” and including important CEOs in his Cabinet.
After several years of growth, poverty reduction and a strong presence of the State in the economy and the financial sector, Argentina’s economy was not at its best during Cristina Fernández’s last years in office, due to growing inflation rates and a GDP reduction in 2014, which barely improved in 2015, according to World Bank figures.
The arrival to power of Macri, the leader of a right-wing electoral coalition, brought about a deep change in Argentina’s economic policies: a reduction of the role of the State in the economy; the removal of transport and utility subsidies; an increase in imports; the removal of financial and monetary controlling mechanisms, among other measures.
In spite of providing the market with several hints, large international companies did not invest in the country. Last year, the Argentine currency, the peso, fell over 100% against the US dollar, thus doubling inflation rates in a recessive context.
Two years after Macri’s inauguration, fearing an imminent crisis, the Argentine Government resorted to the International Monetary Fund (IMF) and received a USD 57 billion loan until 2021, the largest loan the international organization has approved in its history. As a result, a strict contraction of the State accounts began, overseen by the IMF.
The media industry, which was already affected by cultural changes in consumption, also felt the impact of the economic crisis: last year, newspapers and news agencies across the country closed their doors; several radio stations and TV channels faced serious economic issues; and three million jobs were lost due to dismissals and voluntary retirements between mid-2015 and mid-2018.
Cultural industries are among the most dynamic sectors in Argentina’s economy. With $170.54 billion in 2017, cultural industries accounted for 2.56% of the total economic activity, thus contributing more than energy and tourism, in a list where farming is the leading industry, according to Argentina’s Cultural Information System (SINCA).
In recent years, digital content is the area that has expanded the most, though the advertising, audiovisual and publishing sectors are still the largest.
In all these areas, Grupo Clarín ranks first in terms of audience and turnover. Their shareholders are among the wealthiest people in Argentina, according to Forbes. Felipe and Marcela Noble Herrera, the family Noble’s heirs and multimedia owners, and their CEO, Héctor Magnetto, rank 14 with assets worth USD 1 billion.
The media with the highest levels of audience at a national level belong to corporations. In the city of Buenos Aires, there are only two exceptions: Grupo Octubre (AM 750 and Página 12), managed by the Single Trade Union of Concierges (SUTERH), and Cooperativa de Trabajo Por Más Tiempo, a workers’ cooperative that publishes newspaper Tiempo Argentino, among others.
The other exception is the Federal System of Media and Public Content, which comprises TV Pública, Radio Nacional and news agency Télam, which are currently undergoing an asset stripping and audience reduction process.
In spite of experiencing a fall in recent years, advertising continues to be the media’s main source of income. Large supermarket chains and appliances stores, telephone companies, car makers and tourist companies are among the main advertisers in a market where official advertising from the National State and the provinces accounts for 20% of the total.
The Argentine Chamber of Media Agencies reported that in 2017 private advertising amounted to $27.2 billion and accounted for 81% of the total. 46% of it went to TV, 24% to internet, 16% to print media and 8% to radio stations. Almost a quarter of that money went to media owned by Grupo Clarín.
In 2017 official advertising from the National State and the main provinces accounted for 19% and is still under dispute. During Cristina Fernández’s terms in office, that money was allocated to strengthen those groups with an editorial line that supported her policies, while weakening Clarín.
According to figures reported by Argentina’s Chief of Cabinet of Ministers, $2.49 billion and $2.36 billion went to advertising in 2014 and 2015, respectively. Grupo 23, whose assets were stripped once Fernández’s administration was over, was the main beneficiary of that money.
When taking office, Macri tried to differentiate himself from the country’s previous administration by issuing executive orders to establish a series of distribution parameters, including audience levels. However, Macri’s party, Cambiemos, continued to implement a policy of punishments and rewards based on the media’s editorial lines. Now aligned to the Argentine Government, Clarín was the main beneficiary of such a policy: in 2017 the group was awarded $773 million by the Argentine Government and its Buenos Aires city counterpart. Official funds thus accounted for 10.9% of the group’s income from advertising. In contrast, Grupo Octubre, which criticizes Macri’s administration, has been discriminated: its radio station AM 750, the fourth most popular, does not rank among those that receive more official advertising.
In 2016, Macri’s first year in office, $2.43 billion went to official advertising, while in 2017, when mid-term elections were held, $2.98 billion went to official advertising. During the first semester of 2018, official advertising fell considerably to $654 million. Figures show there is a tendency to increase official advertising in election years.
TV consumption in Argentina features a massive paid TV market with high penetration levels. Although there are over 100 open TV broadcasters, many cities lack access to those broadcasters and, therefore, main paid TV channels rank among the most popular.
In 2017 data from Argentina’s National Communications Entity (ENACOM) showed that cable and satellite TV together generated income worth $65.91 billion, 98% of which comes from monthly subscription rates. Open TV is a smaller business: in 2017 it generated income worth $15.33 billion. Over 85% of it comes from official advertising.
Grupo Clarín leads the industry with Canal 13, the second most watched channel after Telefé, and its paid TV channel, TN, the most popular of its category, followed by C5N (Grupo Indalo). In addition, Grupo Clarín’s cable operator, Cablevisión, controls 41% of the cable TV market, followed by American cable operator DirecTv, Supercanal (CVI Austral) and Telecentro (Pierri).
Thanks to Cablevisión’s merger with Telecom, Grupo Clarín became also the largest internet service provider.
With a change in habits and the current economic crisis, traditional media have seen a considerable fall in their audience levels. In 2017 print newspapers reached a historical low in sales, with 732,246 units sold per day across the country. Only five years before, in 2012, net circulation of paid newspapers was above one million copies a day.
In spite of the reduction in the number of readers, Clarín has been the most sold newspaper for almost 40 years. It is followed by La Nacion and Diario Popular.
Part of the readers have moved to the online formats of those newspapers. In 2017 30% of those who read the newspaper read it online, according to the National Survey on Cultural Consumption (ENCC) carried out by SINCA.
Given this context, Clarín and La Nacion developed marketing strategies aimed at keeping their subscribers through their loyalty card programs, 360 (Clarín) and Club La Nacion, and began to charge for access to their websites through a porous paid news system.
Papel Prensa, the only newsprint manufacturer in Argentina, is controlled by Clarín together with La Nacion and Argentina’s National State. In recent years, newsprint consumption has decreased over 50%: in 2011 Papel Prensa sold 204,000 tons of paper, while that number fell to 100,000 tons in 2018.
Together with a reduction in sales, Clarín’s newsprint factory increased the price of paper: in 2017 it rose the price eight times with an accumulated increase of 110%
While print newspaper readership goes down, news portals have more visitors than ever and are consolidating themselves as information sources. Infobae.com, owned by Daniel Hadad, is the most popular website in Argentina, followed by Clarín.com and Lanacion.com.
Many of the most popular portals are digital versions of traditional media. Among them, there are two well-differentiated sustainable models: Infobae and El Destape. Unlike their direct competitors, which attempt to compensate the print media consumption fall by means of digital subscriptions, Infobae’s content is free of charge. El Destape, owned by Roberto Navarro, is ranked 13 among the most popular news portals and depends on the voluntary contributions made by its readers to finance its journalistic project.
Advertising grows every year in the sector: $93 million came from official advertising in 2015, $144 million in 2016, and $213 million in 2017. Over the first semester of 2018, however, it fell to $75.9 million.
Private advertisers are also moving to internet. In 2017 official advertising accounted for only 5.74% of an estimated total of $3.1 billion, according to a report issued by consulting agency adQuality. Among the private sector, those who contributed the most were the retail, political advertising and car industries.
Although they are not journalistic sites, Facebook (25.56%) and YouTube (7.27%) concentrated over 30% of media advertising, followed by La Nacion (3.72%), Clarín (3.26%) and Infobae (3.19%).
Although ENACOM estimates that there are over 10,000 AM and FM radio stations in Argentina, radio is the sector with the lowest income rates, i.e., 17.01% of all the money generated by audiovisual communication services (some $4.05 billion).
In spite of its large penetration, its business scale remains small. In 2017 radio received only 8% of private advertising ($2.42 billion). Official advertising played a more prominent role, however: 16.2% ($544 million) of it went to radio.
Clarín also leads this market with AM Radio Mitre and FM La 100, the most popular radio stations. In the AM segment, the other most popular radio stations are La Red (Vila-Manzano) and Radio 10 (Grupo Indalo), while in FM, Radio Pop (Grupo Indalo), Disney and Aspen rank among the first.
Radio has been one of the most affected sectors in recent years: Radio América’s asset stripping; AM Radio Rivadavia and FM Radio Uno’s bankruptcies; dismissals and salaries paid in installments in Radio Nacional, Radio El Mundo (Fio Fio Producciones), Radio del Plata (Electroingeniería) and Grupo Indalo’s radio stations, among other conflicts, show the sector is facing a serious crisis.
Given this context, three new projects were born. After being marginalized in traditional spaces, they have bet on the digital format and on the financial support of their public: Futurock.fm, made up of former managers and workers of Nacional Rock; El Destape Radio, created by Roberto Navarro after being fired from Radio 10 and C5N; and Congo.Fm, a station that revolves around radio program Gente Sexy (now called Sexy People), hosted by Clemente Cancela. The program was removed from FM Blue’s programming when the station became a music only radio station.
Indec (2018). Evolución de la distribución del ingreso
Cuenta satélite de cultura (2018). Informe sobre valor agregado bruto, comercio exterior, puestos de trabajo, generación del ingreso y consumo privado cultural de 2017
Sistema de Información Cultural de la Argentina. Informes de coyuntura cultural
Cámara Argentina de Agencias de Medios (2017). Inversiones publicitarias