Download AdelmanAlan1977

CALIFORNIA STATE UNIVERSITY 1 NORTHRIDGE
. TELEVISION AND DEPENDENCE IN LATIN AMERICA
1\
A thesis submitted in partial satisfaction of the
requirements for the degree of Master of Arts in
Mass Communications
by
Alan H. Adelman
January, 1977
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The
,--.-.Jthesis of Alan Adelman is approved:
~
Cali£ornia State University, Northridge
December, 1976
p '
ACKNOWLEDGEMEN'fS
My gratitude and appreciation is extended to
• all those who counseled me in this venture.
Especially,
:I would like to thank the members of my thesis committee:
l
;Professor Fred Kuretski, whose insight into the implica-
- l tions of this research encouraged me in the development
of a theoretical framework; Dr. Felix Gutierrez, who provided important sources for the conduct of this study as
' well as assisting me in the development of a more rigorous
i
methodology; the Chairman of the committee, Dr. Donald
Wood, whose inexorable objectivity and incisive criticism
forced me to refine and document my arguments.
Equally, I am appreciative of the efforts
undertaken on my behalf by Charlotte Oyer and Carol
Kindschi, staff librarians at the
flee.
Th~:.""y
Inter~library
loan of-
eomplied with my r.1any requests for documents
and texts with trust and concern.
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS
iii
TABLE OF CONTENTS
iv
LIST OF TABLES
v
ABSTRACT
CHAPTER I
1
CHAPTER II
7
CHAPTER III
36
CHAPTER IV
60
CHAPTER
v
68
CHAPTER VI
77
BIBLIOGRAPHY
84
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LIST OF TABLES
Table 1. U.S. Direct Investment in Latin America ... 19
Table 2. Fund Flows Related to U.S. Foreign
Investr.nent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 3. U.S. Investment in Latin America by
Sector and Country. . . . . . . . . . . . . . . . . . . . . . . . 20
Table 4. Capital Expenditures of U.S. Companies
i.n Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 5. Percent Assets of Manufacturers in Mexico. 23
Table 6. Percent Assets of Manufacturers in Brazil. 25
Table 7. Percentages of Foreign Programs in Latin
America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 8. U.S. Manufacturing Investment in Latin
America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 9. Sponsor Investment in Colombian Television 39
Table 10. Relationship between Program and Sponsor
Origins on Colombian Television . . . . . . . . . . . 40
Table l l 1975 Billings of the 10 Largest U.S. Ad
Agencies. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Table 12
International Billings of the 3 Largest
U.S. Agencies . . . . . . . . . . . . . . . . . . . . . . ~ . . . . . . 43
Table 13. Top Agencies in Latin America - 1975 . . . . . . 45
Table 14. 1976 Prices of U.S. TV Exports to Latin
America. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 52
Table 15. Economic Stratification of TV Homes in
Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Diagram 1 and 2.
1-bdel of Economic and Cultural
61-
Penetration in Latin America
62
'"
ABSTRACT
TELEVISION AND DEPENDENCE IN LATIN AMERICA
BY
Alan H. Adelman
Master of Arts in Mass Communications
This study analyzed the economic structure of
commercial television in Latin America.
A theoretical
framework was derived from the published writings on
international economic relationships by leading Latin
American social scientists who adhere to a perspective
embracing dependency.
Based on the exploratory studies of Schiller
(1969), Pasquali (1972), and Nordenstreng and Varis (1974),
the four institutions that control and manipulate the
content of television via their economic interaction were
determined to be the following: sponsors, advertising
' agencies, program distributors, and station owners.
was found that·
th~
It
first three of these institutions are
distinguished in several Latin American countries by a
high concentration of foreign investment.
The influence
of foreign investment in the fourth institution was found
to be limited primarily to Central America.
However,
broadcasting surveys of countries such as Mexico and
Brazil, whose television stations are owned by domestic
'lli
industrialists, indicated that domestic and foreign owners
1relied on the same criteria in the selection of programs.
A model set of relationships in the commercial
I
l television
structure was developed from the analysis.
:The model evidences a dual role for television in the de-
:
. pendency framework.
Television reflects dependency in
'the economic and cultural links within its structure.
'Television sustains dependency by its capacity to trans;mit and reinforce commercial values.
It was found th~t
consumerism transmitted by television generates a production-consumption cycle oriented toward the upper and
:middle classes, and away from the needs of the lower
classes, by increasing demand in the direction of luxury
products.
The major conclusion of this study is that
commereial television in Latin America reflects and sustains dependency as a natural development of the international capitalist system.
As the literature review
documents, the concentration of foreign investment in
television has a parallel in many other industries throughout Latin America.
The shift of emphasis from extractive
industries to manufacturing has enlarged the role of
telev-.ision ·as a perpetuator of dependency.
This study
evidenced a consciousness on the part of multinational
1
companies and domestic industrialists of how to utilize
television for economic and social control.
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TELEVISION AND DEPENDENCE
IN LATIN AMERICA
I. Introduction
Statement of the Problem.
The plan of the pre-
sent study is to establish the economic and cultural
underpinnings of television in Latin America by analyzing the medium within the context of an independent capitalist relationship between multinational companies and
national industrialists.
Purpose of the Study.
The purpose of the study
is to determine the extent that the programming and sponsorship of Latin American television reflects and sustains the dependent
pos~tion
of Latin America in the
international economy.
Significance of the Study.
This study is signif-
icant in that by utilizing a structural analysis of economic sources of control it integrates and orients recent
eollections of data on Latin American television.
Surveys
conducted by Nordenstreng and Varis (1974) and Vision
(1975) documented the quantity of imported programmitt"g
in Latin America.
Researchers in communications <::l.nd edu.-
cation such as Schiller (1969) and Friere (1971) have
written of the threat to cultural sovereignty posed by
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the presence of foreign programming in the countries of
Latin America.
The principal idea that emerges from
these studies is that an unequal communications relationship places developing countries under the influence of
values and images either extraneous to them or not representitive of the needs of their majorities.
However,
most of these studies concern the cultural effects of
foreign programming, and only a few,
(Schiller,
Nordenstreng and Varis), speculate about their cause.
None of the studies in the literature analyzed Latin
American television in the context of the relationship
between multinational companies and national elites.
This study will examine their mutual interests.
Economic penetration has been found by Smythe
(1974) and Pasquali (1972) to effect an ideological penetration i.n which values and attitudes are exported to
developing nations as commodities.
While both forms of
penetration may be manifest in all the mass media, television was selected as the medium for investigation because of the potential attributed to it by Wells (1972)
and Barnet and Muller (1974) as a disseminator of consumerism.
The choice of region was partly dictated by the
researcher 1 s own familiarityWith Latin America, but also
because it is the unofficial sphere of cultural, economic
and political influence for the United States.
It should
therefore follow that if a dependent relationship sup-
ported by the mass media can be said to exist between one
dominant nation and others as its satellites, it should
be manifest in the relationship between the United States
and the countries of Latin America.
Definition of Terms.
The following terms are
used in this study:
Dependency - A situation in which the economies
of certain countries are conditioned by the
development and expansion of another economy
to which the former are subjected.
Cultural Penetration - A process in which values
and ideologies of one society are introduced
and promoted within another society.
Import Substitution - The manufacture within a
raw material producing a country of goods
previously imported from industrial centers.
Consumerism - Ideology advocating the pleasure
to be found in the possession and use of new
things.
Core, Metropolis or Center - Synonomous terms
that refer to economies possessed of the
technology, production and capital to be
autonomous and expand.
Periphery or Satellites - Synonomous terms
that refer to economies that are reliant on
foreign capital and technology for industrial
development.
Hypothesis.
The literature review for this
study provides evidence that the composition of television is the same in most countries of Latin America:
imported series and feature films, soap operas and musical variety shows.
The work of such dependency theorists
as Cardoso (1972), Sunkel (1973) and DosSantos (1976)
and the studies of Newfarmer and Mueller (1975) and
l Pasquali (1972) suggest that there are common forces responsible for that sameness.
These and related studies
haV2",- formed the basis for the following hypothesis:
The
composition of programming and sponsorship in Latin
American television reflects the economic and cultural
links between multinational corporations and national
industrialists.
Method.
To test the hypothesis that television
in Latin America reflects an economic inter-dependency
between multinational companies and national industrialists this study analyzes the foreign and national investments in the present commercial structure of Latin
American television.
Research Hypothesis.
is:
The research hypothesis
The national origin and composition of broadcasting
in Latin American television reflects the national origin
and cultural bias of the economic sources of control.
The observed variables in this structure are economic
sources of control and broadcast composition.
The inde-
pendent variable "economic sources of control" is operationalized as:
l) sponsors; 2) advertising agencies;
3) program distributors; 4) station owners.
The depend-
ent variable "broadcast composition" is operationalized
as the origin and class of programming in the individual
Latin American countries.
two
v~riables
The relationship between the
is tested by comparing research findings
on the origin of investments and the origin and class of
programming in different countries of Latin America for
evidence of reciprocal ties.
Procedure.
This study
utili~es
the media trade
publications, Variety, Advertising Age and TelevisionRadio Age, as sources £or the Latin American activities
of U.S. mass media enterprises.
The data encountered in
these journals provides the basis for an analysis of the
infrastructure relationship of U.S. sponsors, advertising
agencies and distributors with Latin American station
owners.
These sources were selected following a systema-.
tic survey of the literature that revealed that textbook
studies in these areas contained dated information and
corporate reports maintained strict secrecy concerning
foreign holdings.
This study has been organized as follows:
Chapter II - Review of the literature.
Theories
of dependency suggested by leading Latin American social
scientists are considered as a theoretical framework for
this study.
These theories are given support by reports
related to dependency funded by the U.S. Senate and the
United Nations.
The application of dependency to tele-
vision is discussed in the review of exploratory research by Herbert Schiller and Alan Wells.
Chapter III - Discussion of the economic sources
of control iri Latin American television.
Analysis is
the .four institutions ·within the commercial structure o:f television that are related to dependency: sponsorship,. advertising agencies, distributors, and station
ownership ..
Chapter IV - Based on the findings of Chapter
III~
a model of economic and cultural penetration in
Latin American television is constructed.
Chapter V
~
Exploration of the impact of con-
sumerism on development.
Economic and cultural effects
on both the- elite and poor sectors are considered.
Chapter VI - Results and Discussion.
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II.
Review of the Literature
The dependency theory is one of two major theoretical models that have been at the heart of much Third
World development research since the end of World War II.
The other theory is diffusion.
According to Chilcote
and Edelstein (1974), a basic assumption of the diffusion
theory is that National elites will promote development
"through the diffusion of technology, capital and enterprising spirit to the backwards areas." 1
Two other as-
suptions of diffusion theory, cited by Beltran (1976),
are that: 1), increased production and consumption of
goods and services constitutes the essence of development; and 2), the key to increased productivity is technological innovation. 2
The diffusion strategy finally
assumes that there will inevitably be a fair national
distribution of income and opportunities and an integration of the rural masses into modern society.
1 Ronald H. Chilcote and Joel C. Edelstein (Eds.),
Latin America:
The struggle with Dependency and Bevond,
(Ne~.¥ York: 1974)
-:53.
2 Louis Ramiro Beltran, "Alien Premises, Objectives and Methods in Latin American Communication Research, (April, 1976)
: 111.
·------· .-
The insensitivity of diffusion theory to decisive contextual influences has led to a
of
challeng~
some of its basic assumptions by analysts in both the
U.S. and Latin America.
According to Beltran, these con-
tentions essentially are: 11 overall
ch~nge
of societal
structure is the fundamental prerequisite for the attain-·
ment of a genuine human and democratic development; and
2), technological improvements in productive sectors do
not necessarily lead to development, but may even impede
it by further strengthening the dominant conservative
elites. 3
Thus, import substituting industrialization and
consumerism, two important mechanisms in the diffusionist .
development strategy, were seen by many critics as
instr~
ments of dominant class interests.
Dependency Theories.
Having arisen from the
challenge to diffusion, dependency is a relatively recent
theory in Latin America.
Its formulation and dissemina-
tion among Latin American social scientists not coincidentally parallels the penetration and growth of multinational companies in the region.
The denationalization
and economic stagnation that were attributed by some
economists to import substitution led to the search for
a
theory that would explain the failure of foreign in-
vestment in promoting aevelopment.
Ludovicio Silva
.
Michelena wrote in Teoria y
P~actica
de la Ideologia that
the failure of the ideology of import substitution
"obliges a rigourous search for a new theory in which dependency is re-interpreted in the light of historical
fact.n 4
Whereas dif.fusion evidencesa blindness to
social structures and historical perspective, dependency
made these its focal points.
In analyzing the process of dependency and its
effects on development, the dependency school adopted the
argument that import substituting industrialization
places new and greater elements of external control on
the economies o:f Latin America.
The common point of de-
parture for dependency theorists is the link of underdevelopment to the international economic system.
By
concentrating on the international system, the dependency theory proceeds .from a basic fact of Latin American
history:
th~t
beginning with the Spanish conquest, Latin
American econrnies have .always been shaped by dominant
capitalist nations (Spain and Portugal in the colonial
and post-independency period, England throughout the
nineteenth century, and the United States during the
twentieth century).
The nature of this relationship is
4 Ludovicio Silva Michelena, Teoria y Practica
de la Ideol,.ogia,. (Mexico, D. F. : 1971)
:177. *All
quotations from Spanish titles in this thesis are trans~
lated into English by the researcher.
~
.
illustrated by Theotonio Dos Santos (1973) in "The Crisis
of Development Theory and the Problem of Dependence in
Latin America."
DosSantos states, "The relation of
interdependence between two or more economies, and between these and world trade, assumes the form of dependence when some countries can expand and be self-sustaining while others can do this only as a reflection of that
expansion, which can have either a positive or negative
effect on their immediate development." 5
The link between internal structures is a key
element in the general thesis that incorporation into
the international economic. system molded Latin American
production to the specifications of dominant economies.
Dependency theorists investigating this link, Cardoso, 6
Furtado,
8
7
and Sunkel,
are in agreement that the rewards
5 Theotonio Dos Santos, "The Crisis of Development Theory and the Problem of Dependence in Latin
America," in Henry Bernstein (Ed.), Underdevelopment
and Development, (Middlesex, England: 1973):231.
6Fernando Henrique Cardoso, "Dependency and
Development in Latin America," New Left Review, no. 74
(July-August, 1972)
7
.......
America,
Celso Furtado, Economic Development of Latin
(London: 1970)
8 oswaldo Sunkel, "The Pattern of Latin American
Dependence," in Victor Urquidi and Rosemary Thorpe (Eds.)
Latin America in the International Economy, (London:l973)
:5.
of industrialization have been divided between a small
Latin American class (who use much of their gain for the
purchase of luxury consumer goods) and the dominant
countries.
Cecena (1970) attributes an ideological
motivation to Latin American industrial and military
elites, claiming that they favor foreign interests as a
means of perpetuating their hegemony over the masses. 9
Consenus on external control and internal collaboration nonwithstanding, the dependency literature has
evolved into two distinctly different traditions.
One
stems from the perspective of the Economic Commission for
Latin America.
The other has Marxian antecedents.
Be-
tween them are sociologists like Fernando Cardoso and
Annibal Quijano who borrow freely from both sides.
Each
group stresses different aspects of how and why the international economy and its changes condition changes in
Latin America.
The perspectives and literature associated
with each tradition bears consideration.
The Economic Commission for Latin America, ECLA,
was organized as a regional commission of the United
Nations in 1948.
Its principles and attitudes are at-
tributed by Hirschman and others to the Argentine economist~
Raul Prebisch, who was appointed Executive
Secret~y
9 Jose Luis Cecena, Mexico er~_la Orbi ta Imperial
(Mexico, D.F.: 1970)
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.,,.,...,,, -o
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-"'"-'~~-_,-.-...!·•'<• _,,._, ··••· --~---~·~"-' ~>->-<•.J
of ECLA in 1950.10
The Prebisch formulation of an ECLA
philosophy drew early attention to the link between Latin
American underdevelopment and world capitalism.
Original
j
ECLA doctrine consisted of dividing the world into an
industrial center anda raw material producing periphery,
demonstrating that unrestrained competition appropriated
to the center most of the increment in world income. 11
This purely structural analysis led to an early advocacy
of import substitution as a means of achieving economic
equilibrium.
Since the first formulation of his thesis,
Prebisch has become aware that the perpetuation of dependency relations entails the maintenance of cooperative
elements based on mutual interests.
He gives recogni-
tion in Change and Development - Latin America's Great
Task, to one of the basic theses of Marx, writing that
"changes in production techniques make it essential to
transform social, political and institutional structures
as well as attitudes of mind and ideologies." 12 Similarly
10 Albert 0. Hirschman, A Bias for Hope, (New
Haven: 1971)
:80.
11
Raul Prebisch, The Economic Development of
Latin America and Itsftincipafr Problems,(New York:l950)
1 ')
~Raul Prebisch, Change and Development - Latin
America 1 s Greatest Task, (New York: 1971)
:222.
l
this
perspect~ve
has been modified by contemporart theo-
rists to include import substitution as a mechanism of
e:xterna.l control and an internal elite as co-beneficiaries
of tha.t control.
Oswaldo Sunkel, Chilean economist, con-
tends that the dynamics of import substitution only aggravate dependence.
In "The pattern of Latin American
Dependence" he writes:
It (import substiution) is in fact very
difficult to understand if, apart from the
internal peculiarities of each country,
reference is not made to the framework of
external links, conditioning factors and
pressures that have influenced industrial
development so decisively in our countries.
In fact. its dynamics and structure and the
nature of the productive processes adopted,
especially with reference to technology,
have been inducBd to a large extent by external cond~tions. As a consequence, the
development strategy of import substituting
industrialization, which was supposed to
free the economy from its heavy reliance
on primary exports, foreign capital and·
technology, has not only failed to achieve
these aims bu't has in fact aggravated the
dependent nature of our economies.l3
In another essay, "Capitalismo Transnacional y
Disintegracion Nacio·nal," Su.nkel argues that the multinational. companies have created import substitution
depend.ency by satisfying and generati.ng internal market
demands for a sma11 elite class, who appropriate for
themselves the rewards of technical progress and other
sources of high income.
He identifies these sources as
!.
i
;
13oswaldo Sunkel, op. cit.,
I
: 5.
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high productivity activities; transfer of income from
high productivity sectors to areas unrelated to them and
external transfers of
income~
These sources, according to
Sunkel ,. allow the Latin American upper and middle classes
to maintain consumption patterns and styles of living
comparable to their counterparts in developed countries.
14
Celso Furado shares Sunkel 1 s emphasis on the
shaping of the Latin American structure of production by
the multinational corporation.
In his history, Economic
Development of Latin America, he writes:
We have already seen that the structure of the Latin American economy tends
to be increasingly controlled by international consortia, a situation which
introduces new disintegrating elements
into the national economies ... Given the
oligopolistic positions they occupy and
price leadership policies they pursue,
foreign enterprises are in a position
to plan their expansion on the basis of
self-financing, complemented where
necessary by local banking systems.
In
other words, in economies characterized
by a·sizeable structural manpower surplus, the enterprises that dominate the
market are in a privileged position for
retaining all the benefits of increased
productivity. Such a situation implies
that economic development would not benefit the country itself, if we take this
to mean the bulk of its population, but
t.he foreign groups in control of the
enterprises.l5
14oswaldo Sunkel, "Capitalismo Transnacional
y Dis:in.tegracion Naciona1" El Trimestre Economico,
( Apri.l-June, 1971).
15 celso Furtado, op, cit.,
.
:28.
.
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o·~
Both Sunkel and Eurtado base their analyses of
!underdevelopment on the cotrcepts of process, structure
and system.
I
! development
They point out in very similar language that
is a structural process of change and under-
developed countries are those countries that lack an auto'nomous capacity for change and growth and are dependent
for these on the dominating core.
The core-periphery
relationship and its interna-
tional division of labor have shaped the uneven develop· ment of various regions of Latin America, according to the
view of Andre Gunder Frank and Theotonio Dos Santos.
In
Latin America: Underdevelopment or Revolution, Frank discusses the replication of the international core-periphery
relationship at the national-regional level.
He character-
izes this relationship as a series of unequal social ex16
changes between urban and rural groups.
His analysis
is pr:i.marily concerned with demonstrating how the establishment of a market economy based on the demands of
capitalist production in advanced industrial countries
leads to the establishment of these internal center-satellite relationships.
Frank, a Marxist, differs from
Sunkel and Furtado in his view that socialism is a precondition for change in the internal structure.
l6Andre Gunder Frank, Latin America:
ment or Hev~lution, (New York: 1969)
UnderdeveloJ2:-
Another
~arxian
analyst concerned with dominant
~nd dependent social formation~ is Theotonio Dos Santos.
·In "The Crisis of Contemporary Capitalism? "Dos Santo8
\
i
'contends that underdevelopment is not an original state
;but rather a consequence of the "uneven and combined de~
:velopment of capital ism."
His thesis is that the
develop~
l
ment of capitalism (being monopolistic and imperialistic}
'could not produce "an international economy of equilib·rium," but instead produced "an increasing disparity and
'
~onflict
between a dominant capitalism and a dependent
capitalism."l7
Parts of the system are developed at the
'expense of other parts.
This uneveness of development is
explained by Dos Santos as the combination of technology?
production. and capital on one hand andan integrated world
market of commodities and exploitable labor power on the
other.
Fernando Henrique Cardoso is a sociologist who
bor~
rows freely from Marxist thinking while stopping short of
embracing socialism as a precondition fo.r development,
Cardoso is primarily interested in the economic process,
In an essay entitled "Dependency and Development in Latin
America," he stresses that the social and political aspects·
'
of the·development process need to be concretely linked
,with the economic aspects.
17
According to Cardoso, this is
Theotonio Dos Santos, ''The Crisis of Contemporary
Capitalism. "Latin Ameriean Perspectives, no. 2, (Spring
:1976)
:93.
because economic groups try to ·establish a system of social
;relationships which permit them to impose on society an
economic form compatible with their interests and objecl; t~bes.
.
18
Case Studies.
A sociological orientation simi-
'lar to Cardoso is found.m Annibal Quijano's case study,
:Nat:l.onalism and Capitalism in Peru:
A Study in Neo-Imper-
'
: ialism. By adopting an analytical framework based on a
dependency model, Quijano reveals that the nationalist
regime is linked to a network of corporate monopolies. 19
James Cockcroft analyzed the socio-economic
stratification of Mexico, concluding that the class struc; ture is conditioned by Mexico's dependent relationship
with the United States.
He reports that U.S. corporations
and "two thousand Mexican families" who compose the national oligarchy dominate the political economy by means
of capital accumulation and monopolistic control of commerce and the distribution of goods and
no
services.~
DosSantos' examination of Brazil's intensive·
l8Fernando Henrique Cardoso, op. cit.
in Peru:
19Annibal Quijano, Nationalism and Capitalism
A Study in Neo-Imerialism, (New York: 1971) ~
2 0,James D. Cockcroft, "Mexico," in Ronald H.
Chilcote and Joel C. Edelstin (Eds.), Latin America: The
Struggle with Dependencv and Beyond, (New York: 1974)
:264
-
~~--v~
..
·~--'->cu,.,-,_..,....._., .,.__,.,....~_.,,....,_~._..,_.,_.=n._..._.. __~,..,~--.o.•"!""•---,..~-~--.--•--~- ------~--...-"'"'~~--
,. .,. ._. ,. .,. ,. _,. . .. . ,._. . . . .,_. ,. _
~
j
_,,..,~ ~••·'"
~
industrial development suggests that the "economic miracle
is monopolistic, concentrated and exclusive." He reports
that development is based on increases in worker exploita-
1 tion
(increases of profit based on lowered wages), result-!
ing in "more disposable capital for investment but a restricted market." 21
Reports related to Dependency. Newfarmer and
!Mueller presented a report to the Senate Subcommitee on
l
i
;Multinational Corporations, entitled:
; Corporations in Mexico and Brazil:
Economic and Noneconomic Power.
Multinational
Structural Sources of
This report revealed the
the pattern of U.S. foreign investment in Latin America.
As indicated in Table 1, between 1960 and 1972, U.S.
holdings in Latin America increased from 9.2 billion
dollars to 16.6 billion dollars. 22
Table 2 reveals that during the same growth
period (1960-1972), U.S. firms invested 4.18 billion
dollars in Latin America and extracted 9.15 billion in
earnings. 23
This situation exerts a decisively negative
21 Theotonio Dos Santos, "Brazil: The Origin of
A Crisis," in Ronald H. Chilcote and Joel C. Edelstein
(Eds.), Latin America: The Struggle with Dependency and
Beyond, (New York: 1974..)
:475-476.
22
Richard Newfarmer and Willard Mueller, Multi
national Corporations in Brazil and Mexico: Structural
Sources of Economic and Noneconomic Power, Report to the
Subcommittee on Multinati.onal Corporations, Committee on
Foreign Relations,U.S. Senate,(August, 1975)
:34
23Ibid. ,
:10.
(-. . . . , . . _., ._" '.___. . . .
. . '" ___._,. .,._ ______
--~-,.,.-
I
.......- ..
----~---_,.,.-...
...,..~----~-.-..-=~-
..
..
~-·---~
~-"--~=-,....,_
•
\influence on the balance of payments of Latin American
)countries in their dealings with the United States.
Table l
U.S. Direct Investment in Latin America
by Country (in millions of dollars)
Country
Total----, Mexico
:Panama
i Cuba
Other Central Am.
; Argentina
Brazil
Chile
Colombia
. Peru
Venezuela
· Other Western
Hemisphere
1960
1966
1970
1972
9,249
11,448
14,760
16,644
795
405
956
319
472
953
738
424
446
2,569
1,248
792
0
683
1,035
1,247
844
571
548
2,615
l, 786 .
1,251
0
624
1,281
1,847
748
698
688
2,704
1,993
1,423
0
646
1,391
2,490
621
739
714
2,683
1,132
1,864
3,134
3,944
Newfarmer and Mueller, p. 34.
• Source:
Table 2
Fund Flows Related to U.S. Direct Foreign Investment
1960-1972 By Region (in millions of dollars)
. Reg] on
Net capital inflow
All regions
• Canada
Western Europe
Latin America
Other
Source:
Inflow less
38,533
7·, 058
16,954
4,188
10,333
N~wfarmer
r~atriation
-20,875
-2,137
5,245
-9,155
-14,826
and Mueller, p. 10.
This report also determined that increasing sensitivity on the part of Latin American countries to foreign;
extraction of petroleum and minerals has led to a greater
U.S. company concentration in manufacturing.
Table 3
illustrates the more than tripling of U.S. manufacturing
j
'l,,..._., __,. •...,..,.....-.. ....
,~
...,,y_..~,._..._'T.>........,.V
.., ..
~---,.,."01C~~--·---._.-•,._
__
,,~......,._-~---------'---'___._,~
.... .. -.-.... . .- \....__. .__._.....
_..._~
-.,~...__.._,_.~,
...
.,_,_~·,._---.•
..
r------~'"~--~- ~·~"-·----~·,~~- ~~-----··"---·~
1
--..
.. .
····~---~--~---~ ~ ~-------··
..
~~~----·"···········-···"·-····-~···~
investment in Latin America between 1960 and 1972.24
This
represents almost three-fourths of the total increase in
U.S. investment for that period reported in Table 1.
Table 3
U.S. Direct Investment in Latin America by Country and
Sector for 1960 and 1972 (in millions of dollars)
Mining
1960 - 1972
Country
Latin America
Petroleum
1960 1972
Manufacturing
1960 1972
1,331
2,082
3,264
4,267
1,631
5,565
130
17
956
145
124
19
32
56
147
48
32
265
391
I, 865
9
165
0
111
11
10
517
136
359
76
169
327
Mexico
Panama
Cuba
Other C.A.
Argentina
Brazi 1
Chile
Colombia
Peru
Venezuela
Other Lat. Am.
Other Western
Hemisphere
0
15
251
416
3
33
233
79
1'995
49
176
782
382
159
0
II 0
213
836
I, 745
424
515
21
91
90
180
33
1 '022
21
299
1 '546
47
262
81
539
89
Source: Newfarmer and Mueller, p. 11.
While Latin American pressure to nationalize its
natural resources has created a net decrease in U.S. in'vestments in mining and petroleum, manufacturing invest-ment since 1972 has held firm.
This most recent trend is
'revealed in Table 4, compiled from data in the Survey of
Current
Busines~,
March, 1976.
The 1976 capital expendi-
; tures of U.S. companies in Lati:n America indicate a de.crease from 1974 of 34 percent in mining and 54 percent
in petroleum.
Manufacturing, on the other hand, registers
a 20 percent increase and an investment two and one-half
.
~-~~'"-"~'"-"--" ''-~----·~--~----------·-------·--~--·---~-~----·~--~--=·~··-~--~,~-~~---«w•-
[that of mining and petroleum coinbined.25
The reduction
iin extractive industries and simultaneous focus on manufacturing has enlarged the significance of television
l as
a factor in economic penetration.
Table 4
Capital Expenditures of U.S. Companies in Latin
America 1974-1976 (millions of Dollars)
:All Latin America
Mining
Petroleum
Manufacturing
1974
277
937
1,268
1975
317
638
1,484
1976(projected) 185
432
1,533
Source:
Survey of
Current Business, March, 1976, p.24
The expansion of U.S. manufacturing investment
in Latin America is generally attributed to the exigencies
:of profit-making.
The U.S. Senate Committee on Fiance
·put this issue succinctly:
In all its product lines the typical large
U.S. company reaches a market share plateau
beyond which further market development
may be too costly in relation to the returns anticipated.
It may also fear government anti-trust action.
If it does not
diversify, it must generally be content
to grow no faster than the economy in general. But the reward system of American
businesses make it imperative to grow
faster than that.
Some such growth can
come via introduction of new products
from research or by licensing other's
research.
Acquisition of other companies
offers additional potential. Foreign investment is a third way to go, a way which
is often cheaper, p::>ssibly more profitable,
and always glamorous.26
25 survev of Current Business, (March, 1976)
:24
26The Multinational Corporation: Studies on U.S.
Foreign Investment, U.S. Department of Commerce,{March
1972)
:120
..
..
·--·~,..,_,_,_.._.,.,_.,..'<,.<"'-·OUF~··•"'-<''>.,-.....,~·-~-"~---~----r~-·~>.1>------·-~---------~------·---··- ~--. ------·""--"'-'><>-~--~···~--'
Further findings of the Newfarmer and Mueller
report lead to the conclusion that by using sophisticated
analytical techniques and making selective use of modern
i
;technologies, multinational companies have been able to
/concentrate their investment in the most profitable
'sectors.
Concentration of investment is regarded by
·Barnet and Muller in Global Reach, as a "classic device
; for eliminating effective competition and thereby estab!
lishing
oligopolistic control of the marketplace." 27
The Newfarmer and Mueller report illustrates this point.
Multinational companies in Mexico and Brazil were found
·to be locating in the fastest growing industries.
In
Table 5 it can be seen that privately held Mexican firms
predominate in only four of the nineteen industries: nonmetallic minerals, textiles, food, and leather.
These
industries are the less iBchnologically advanced and more
competitive sectors.28
Although the role of the U.S. is less predominam
in Brazil than in Mexico, multinational companies' share
among the 300 largest firms in Brazil was over fifty percent in 13 of the 21 industries listed in Table 6.
Again
concentration is in the most technologically advanced
Reach,
27 Richard Barnet arid Ronald Muller, Global
(New York: 1974)
:140.
28
:55
Richard Newfarmer and Willard Mueller, op.cit.
'~--~~-· ... -«-'-'«--"h·--.---"-•"'""-""·""""-................-... .-.~-~-- ..... -
....-----·.,-~- ~---___,.- ...,...._....___,_..,..,...._-,,......,.._ _.. _ _._. __.._..,~
_,~ ...,..,_.,......,.,M~•s;>OO--ft-=-·---·~·--
-""""'--
~· ><V<~~
:sectors. 29
Table 5
!Mexico: Largest 300 MNC and Mexican Manufacturing Firms
·in 1972 and Percent Assets Held by LargemFirms by
Industry
Percent of Assets
Foreign
Mexican
! Industry
U.S. Other Total
, Mining
36
· Food
20
; Tobacco
34
!Textiles
0
Lumber
39
1 Paper
22
·Printing
38
Chemicals
54
Rubber
100
Leather
0
Stone, glass, clay 9
1
Primary metals
31
Fabricated Metals
48
Nonelectrical
Machinery
36
Electricai
machinery
35
Transportation
70
Instruments
65
Other
100
Private State Total
44
17
26
100
5
100
51
38
68
100
67
7
74
0
0
0
73
22
95
0
0
10
0
100
23
32
66
10
41
8
6
6
66
5
61
29
39
56
0
32
49
62
20
32
0
0
2
0
0
68
24
59
56
35
33
11
44
58
94
6
0
6
25
9
60
24
16
40
79
100
100
8
13
0
0
21
0
0
0
14
0
0
35
0
39
30
]2
0
0
0
Source: Newfarmer and Mueller, p.55.
The report for the Senate subcommittee on MNC
activities quantifies one of the basic assumptions of
dependency theorists:
The existence of foreign pentra-
tion and selective economic domination of Latin American
industry.
The United Nations Economic Bulletin for Latin
America (1974) supports another basic tenant of dependency
thought, reporting that average per capita increases have
had minimal effects on the distribution of incomes.
The
proportion of populati6n effectively excluded from the
24
market because of income levels lower than $500 dollars
p~r
annum is 30% in Argentina, 40% in Venezuela, 50% in
Chile, 60% in Mexico, 80% in Colombia and 90% in
Honduras. 30 Information on the income distribution of
Brazil is provided by an economic survey conducted by
Brazilian Trends magazine.
Between 1960 and 1970 the
number of people earning less than $500 a year in Brazil
grew almost 5 percent, covering about 60 percent of the
working population in 1970.
31
Among the reasons cited
by the Economic Bulletin for Latin America for the flow
of capital away from the poorer section is consumerism.
The report states:
As the per capita income of a country
increases, the structure of demand changes
and the demand for goods with a higher
import content increases more rapidly.
This occurs because the middle and higher
sectors, which play an important part in
actual demand, keep wanting more complex
goods as their simpler needs are satisfied
and their incomes increase.
As regards
consumer goods for example, the demand
for more sophisticated consumer durables
increases more swiftly than that for simpler goods which satisfy more elementary
needs.32
30 Economic Bulletin of Latin America, "Some
Conclusions on Integration, Industrialization and
Economic Development in Latin America," Vol. 24, Nos. 1
and 2, (1974) :74.
31 Brazilian Trends.
"The Boom is Growing
Strong Roots."
.',,
(April, 1972) :20.
32 Economic Survey of Latin America 1973,
Economic Commission for Latin America, (New York:
1975)
:292.
.
~- .....,.,_,.....,_.~~·.,..,.,~..., -~,<-·
.. ..
~ -.~-._._.._
____ -"'_•_•_____
.. _,·..• _ --·•c•
_,.._.,......,._~~~--'"---,.._.~-._,.~-~-"'-""-'"..>,._~-··----
.
~-
... ~ ..-,__..,___,,,....:
25
Table 6
Braz.il :. Largest 300 MNC and Brazilian Manufacturing Firms
in 1972 and Percent Assets held by Largest Firms by
Industry
Percent of Assets
Foreign
Brazilian
Industry
U.S.
Non meta 1 l i c ores
1 ·1
Metal fabrication
4
Iron and steel 20
Nonferrous meta12 I
Other
9
Machinery
34
M;otors, industry
equ;ipment---- 29
E1ect:rical machinay 22
Trarrsportation
37
1:-to tor v e h i c 1es 4 2
Vehicle parts 53
Woodr paper,furniiture--------- 10
Rubber
100
Chem.fcals
34
Cl:temi'cals and
petroleum--35
Plastics
41
P ha r mace u t i ca 1s 3 5
Textiels
6
Food and beverages 2
Other
3
Source:
Other Total
11
22
21
15
25
15
61
45
40
36
Private
78
25
16
39
55
State
0
51
70
Total
78
76
86
0
39
0
55
26
0
26
69
31
78
22
0
0
31
22
40
74
40
56
47
84
12
4
16
58
8
100
61
0
0
0
40
19
0
29
100
71
35
69
19
40
30
65
38
30
49
65
16
29
40
0
71
100
0
44
56.
67
32
48
52
Newfarmer and Mueller, p.
0
0
12
18
0
0
0
0
0
0
71
0
31
34
29
0
56
67
48
108
The 1975 publication of the ECLA Economic Survey of Latin America further substantiates the idea that
consumption of luxury g:>ods and products is at the expense
of the poorer segments of society.
The survey concludes:
The further growth of 'modern' consumer goods industries, housing construction and services, depends on the size
and purchasing power of the upper-income
minorities rather than the scanty purchasing power of the rest of the population.
The structure of production is rooted in
and draws its sustenance from a highly
uneven income distribution, but this
26
income concentration, by the logic of
the system, cannot generate a high rate
of capital accumulation, Price policies,
the function of the tax system and weak
bargaining power aggravate the disadvantages of the groups in the lower
reaches of the economic structure and
compel them to subsidize the consumption
levels of tmodern' groups, so that their
incomes may be even lower than their
productivity would justify,33
'
.i
It is based on the same process of a flow in
demand in the direction of luxury products that Galbraith
demonstrated that "high incomes of the minority draw
development resources into privileged consumption."
34
Ivan Illich arrives at the same conclusion in
his article entitled "Outwitting the 'Developed'
Countrieo.''
Illich points out graphically that U.S.
trucks can do more lasting damage than U.S. tanks.
He
argues:
"It is easier to create mass demand
for the former than the latter, Only a
minority need heavy weapons, while a
majority can become dependent on unrealistic levels of supply for such productive machines as modern trucks. Once
the Third World has become a mass market
for the goods, products and processes
which are designed by the rich for themselves, the discrepancy between demand
for these Western artifacts and the
supply will increase indefinitely ... Each
car which Brazil puts on the road denies
fifty good people transportation by bus.
33
Economic Survey of Latin America 1973,
Economic Commission for Latin America, (New York:
1975)
:292.
,
34John Kenneth Galbraith, Economic Development
:...... .LQ:;tlJlp r: :l.4ge
J. ...•.
Ma_§_§ ~·· .:..... -J~-~.'?J._!.Z.:._. -~-··-··-··-·~--------- ....-.. --·--·------..···--'
27
Each merchandized refrigerator reduces a
chance of building a community freezer ... 35
The
EGLA
study, Galbraith and Illich are in
I accord in concluding that
~t
is the enclaves of wealth
:within impoverished societies that are the principal tarj gets of global manufacturers and that consumerism is a
social concept sustaining a production-consumption cycle
for and by the wealthy.
Consumerism is the self-professed basic ideology
• of the multinational corporation.
The MNC must continu-
ally sell and resell itself to maintain the type of growth
reported by the Newfarmer and Mueller study.
In Global
Reachr Barnet and Muller make the final determination that
"Stimulating consumption in low income countries is
crucial to the development of an ever-expanding Global
Shopping Center. " 36
Alan Wells also concludes that consumerism is
encouraged in much of the Third World by Western commercial pressures.
In his book, Picture Tube Imperialism?,
he wri.tes that, "The United States and Europe fuel their
economies with the export of consumer goods and where permitted will launch advertising drives to achieve these
35
Countries,
; 20--21'
11
Ivan Illieh, "Outwitting the rDeveloped'
New York Review of Books, (Nove.moer 6, 1969)
.
36 Richard Barnet and Ronald Muller, op, cit.,
:173.
28
.
37
purposes,"
l
He reasons that there is far greater finan-
cial reward and less risk in generating and satisfying
demands of the Latin American elite for modern apparel,
food and toiletry than in experimenting with new technologies specifically designed for development needs.
Harry G. Johnson investigated the multinational
corporation as an agency of economic development and observed that consumerism, and not development, is the vital
force sustaining the multinational manufacturers in Latin
America.
He concludes that the MNC "has no commercial
interest in diffusing its knowledge to potential native
customers, nor has it any interest in investing more than
it has to in acquiring knowledge of local conditions and
investigating ways of adapting its productive knowledge
to local-factor price ratios and market conditions."
38
The concept of consumerism is promoted through
advertising.
Prebisch found that through the technology
of market manipulation, manufacturers shape the tastes
and values of the Latin American market.
He reports that
"consumer preferences are influenced by increasingly
subtle and pervasive forms of advertising which, in
37 Alan Wells, Picture-Tube Imperialism?,
(Maryknoll, New York:
1972) :44.
38 Harry G. Johnson, "The Multinational Corporation as an Agent of Development," in Barbara Ward,
Lenore DtAnjou and J.D. Runnals (Eds.), The Widening Gap:
Developm~_!:i t in the 1970's, (New York:
1971) : 244.
29
Latin American countries, are promoting the systematic
dissemination of consumption patterns that militate
against capital formation. 39
Television Studies.
Television is a particularly
effective medium for spreading the ideology of consumption; especially in a region with a high rate of illiteracy such as Latin America.
In Dallas Smythe's (1974)
analysis of television content, programs are seen as
commodities- or as a means of producing audiences for
commerci2.l purposes.
Smythe declares:
"Practically speaking, the immediate
effect of TV programme content in the
Western commercial system j_s to produce
audiences for the particular prograrrunes
and for later programs advertised in
them. This obvious fact must be given
a theshold position in the theory of
TV content. The immediate, instrumental
purpose of TV is to produce audiences
which can be influenced by the programnes
in certain directions.
The self-professed
direction which their programmes seek to
move audiences which their programmes
produce is toward consumption of the advertisers' goods and services.40
The "consciousness" of global manufacturers and
advertising agencies of how to utilize television for
economic purposes was the subject of Herbert Schiller
( 1969) in his exploratory work, Mass Com..rnunicat ion and
39Raul Prebisch,
(1971) op. cit.,
:130.
40 Dallas Smythe, in Kaarle Nordenstreng and Tapio
Varis, The International Flow of Television Traffic: A
One-Way Street?, (Paris: 1974)
:50.
@
•
30
American Empire.
Schiller speculated that a cultural
"imperialism" was being spread by the mass media,
He
based this argument on the growth of American station
ownership, advertising agencies and program exports
around the worlct. 41
Alan Wells {1972) followed Schiller in suggesting that the interest of American manufacturers and
advertising agencies were allied with the fortunes of
program distributors because American television exports
served the purpose of stimulating demand for American
products. 42
However, neither author produced any sub-
stantial_ documentation in the area of programming or
advertising.
Furthermore, and most importantly, by
lacking a theoretical framework that took into account
the collaboration of national elites, both Schiller and
Wells overemphasized station ownership and ignored
economic and class structures as determinants of
programming composition.
The importance of internal structures is evident
from the findings of Antonio Pasquali (1972) in Comunicacion y Cultura de Masas.
Investigating communications in
Venezuela, Pasquali writes that television is dominated
41
Herbert I, Schiller, Mass Communications and
American_ Empire, (New York:
1969) :95.
42
Alan Wells, op, cit,,
:43.
31
i by a ruling
oligarchy that became more united following
the fall of the populist dicator Perez-Jiminez in 1957.
This was reflected in communications by the fact that
the National Association of Commercial Sponsors was
founded in 1957,
The Society of Newspaper Owners, The
Film Industry Alliance, The Federation of Venezuelan
Advertising Agencies in 1958, and The Venezuelan Publicity
Council in 1961.
Pasquali asserts that this rapid or-
ganization of lobbies and pressure groups facilitated
the scientific defense of common interests and favored
the infiltration of industry in the public administration
. 43
o f th e me d la.
Pasquali also shows that the National Association of Commercial Sponsors (ANDA)
majority foreign interest. 44
represen~
in the
He determines that they
prefer and request imported serials and films for the
insertion of their commercial messages.
Program Surveys. The documentation on programming absent
in the studies by Schiller and Wells is
provided by the Nordenstreng and Varis (1974) survey
of world television programming conducted for the
United Nations Educational, Scientific and Cultural
43Antonio Pasquali, Communicacion y Cultura de
Masas, (Caracas: 1972)
:118.
44
Ihid.,
:115-117
32
Organization, UNESCO.
The survey found that the propor-
tion of programs imported worldwide vary in the extreme.
A few countries show markedly low figures: United States,
1-2 percent; Soviet Union, 5 percent; Japan, 2-1/2 percent.
On the other hand, about half of Latin At"llerican
programs are imports and similar proportions are found
throughout the Middle East and China. 45
The flow of
programming is almost exclusively from the industrial
nations to developing nations.
Nordenstreng and Varis received survey responses
from seven Latin American countries.
Table 7 shows the
percentages of total programming that are of foreign
origin and the percentages of total programming that are
of U.S. origin alone. 46
Table 7
Percentages of Foreign and U.S. Programs in Latin America
Percentage
Percentage
Country
Foreign Imports
U.S. Imports
Argentina
30%
25%
Chile
40%
50%
Colombia
33%
26%
Dominican Republic
50%
35%
Guatemala
50%
90%
Mexico
35%
50%
Uruguay
40%
66%
Source: The International Flow of Television Traffic,
p. 21. Nordenstreng and Varis.
45
Kaarle Nordenstreng and Tapio Varis, The
International Flow of Television Traffic: A One-Way
Street? (Paris: 1974) :13-14.
46 Tb"d
~
1
.,
:
2 1.
33
The Nordenstreng and Varis survey also found
that most TV stations in Latin America operate on a commercial basis.
They reported that "If Cuba is excluded,
93 percent o:f the stations are commercial." 47 It was also
reported that the average advertising time in Latin
American countries is 26 percent of the total TV broad.
cast t 1me.
48
A further observation based on the survey
findings was that
two-th~rds
of the total time of Latin
American broadcasting is composed of movies, series,
variety shows, children's entertainment and soap operas.
The time dedicated to education and culture is less than
49
one- f ·""fth
1
...
A 1975 survey conducted by the Mexican business
journal, Vision, provides a supplement to the UNESCO
Countries included in the Vision
survey on programming.
survey though absent in the Nordenstreng and Varis survey
were Ecuador, Peru, El Salvador and Venezuela.
Per-
centages of imports were found to be similar for the
countries included in both surveys.
The following per-
centages of foreign programming were reported by Vision:
Argentina, 30-percent; Colombia, 25 percent, Chile, 40
percent; El Salvador, 80 percent, Guatemala, 90 percent;
Mexico, 50 percent, Peru, 80 percent; and Venezuela, 60
47
48
,
"<>··--~~-...
Ibid. ,
: 19 .
Ibid. ,
:21.
49 rbid.
. . . = .._._..._...,...,...._...._.,. .....,..,.,.____
.-...-..~----·-••-·••'•"'-'-'
_____ ,...,_ __
.......
~_,,.......,.
.. '''"'""""",__...,,_..
~w"'·-~--:0.''"-"""''~0V~',
...,..~.._,
..... .--..-
.
...
~·~,_,.-..~~·---.......-_.,_.
,.,-~-~~-
_ .... .,..
"~
.......
.
,-~..J
-
·.__.
-34
percent. 5 0
Combined, the two surveys show that 11 Latin
American countries average the importation of more than
one~nalf
of their programming.
For the seven countries
that responded to No?denstreng and Varis, one-third of
their total broadcast time is filled with U.S. exported
programs.
Conclusion.
The failure to take into account
social structures was a major drawback in the
sionist framework of development analysis.
diffu~
This same
drawback is found in the television studies of Herbert
Schiller and Alan Wells.
Both authors ignored socio-
economic structures as determinants of programming composition.
The dependency framework and its analysis of
investment concentration, income distribution, and the
link between internal and external structures, provides
a key to understanding television as it exists in Latin
America.
It suggest that, contrary to the expectations
of diffusion and its instrument of
import substituting
industria.lization, television is so subdued to the influence of the prevailing organizational arrangements
of society that it can hardly be expected to work in
favor of development and against the ruling minorities.
The programming surveys in this chapter report
a cultural penetration in the form of program exports
50 vision, "Un Vistazo a La TV en America Latina,"
L.-.L~.~Y.~.}g.l_J.~J~. )_~·~··-·---
35
from the U.S. and other
America.
indust~ial
countries to Latin
Dependency theory analyzes this condition from
the perspective of the economic sources of control.
Thus,
a significant finding emerging from this review is that
1
the MNCS in Latin America are orienting their investments
to manufacturing.
This suggests that consumerism spread
through television is assuming a growing role in the MNC
. i
strategy for Latin America.
The first step in testing
the two suggestions that: 1), television is an obstacle
to development because it is a reflection of minority
domination; and 2), consumerism spread through TV is assuming an enlarged role in MNC strategy for the region,
is to identify the economic sources in the structure of
commercial television in Latin America.
ject of the next chapter.
This is the sub-
36
III.
Commercial Structures
Television is one of the most effective single
j
i
: media~ for spreading an advertising message.
According
to Barnet and Muller (1974) and Wells (1972), multinational corporations in Latin America use this medium to open
markets and establish demand for consumer products.
In
' those areas of manufacturing where they already have the
upper hand, MNCs use television to consolidate their dominance.
There are four major institutions within the
commercial structure of
television that control and manirr
ulate the content of television via their economic and
ideological interaction.
The identification of these in-
stitutions has evolved from the exploratory literature in
the field.
As stated earlier, Schiller and Wells empha-
sized station ownership as a primary institution within
the commercial structure.
Wells also identified adver-
tising agencies as an element in the commercial equation
of Latin American television.
Pasquali (1972) analyzed
station ownership and advertis"ing agency lobbies and adp.ed
sponsor organization and investment to his commercial
, structure.
Finally, Nordenstreng and Varis concentrated
on distribution as a major element in the commer,cial
J(
structure of international television.
The institutions
to be analyzed in this study are thus the following:
sponsors, advertising agencies, distributors, and station
owners.
The analysis here of these sources of control
is based on the Cardoso theory that "Economic groups try
to establish a system of social relationships which permit them to impose on society an economic form compatible
with their interests and objectives."
Therefore, a de-
pendent situation in television, culturally manifest in
a high ratio of imported programs and commercials, may be
produced by .MNC domination or collaboration with a national elite minority in any one or more of the four institutions.
Economic control and the forming of social re-
lat.ionships to impose programming objectives would be
characterized in each institution as follows:
Sponsorship
Advertising Agency
1. origin, size of
l. origin, .size of
billings.
investment.
2. programs selected
2. lobbies in support
for investment.
of the commercial
system.
J. formation of lobbies
toexpress program
Station Ownership
preferences.
Distribution
1. cost of programs
2. convenience of
programs.
1. origins of ownership.
2. ec6nomic and clas%
identification manifest in investment.
This paper will now analyze these institutions
individually with regard to characteristics of dependency .
.
. . .---·----.-.. _.______,____
~·"'-T.-~....-~~---...., .....-.~.....,__~,.,_.....,. ...,......._-.~_...,._----.-...------··------c
.i
f
"•~-.c-...J
38
; .
Sponsorship.
l
The growth of multinational corp-
orations in Latin America has occasioned lavish investment in television commercial sponsorship, The percentage
of multinational company investment in television sponsorship is often far greater than the percentage of MNC investment in an industry.
An illustration of this point
is the case of Colombia.
As Table 8 indicates, Colombia
is not a leading area for U.S. corporation activity,
'
ranking well below Brazil, Mexico, Argentina
and
Venezuela with a 262 million dollar U.S. investment in
.
manu f ac t ur1ng.
51
Table 8
U.S. Manufacturing Investment in Latin America
1972
(in millions of dollars)
l.
2.
3.
4.
5.
6.
7.
8.
Brazil
1.745
1.385
Mexico
Argentina
836
Venezuela
539
262
162
90
47
Colombia
Panama
Peru
Chile
Newfarmer and Mueller, p. 37.
Source:
Nonetheless, two-thirds of the largest sponsors
in Colombian television are multinational compariies.
Most of them are of U.S. origin.
Table 9 shows the
investments of the major advertisers in Colombian
.
.
t e l ev1s1on.
52
51
op. cit. ,
Richard Newfarmer and Willard Mueller,
: 37.
52
~
E1izabeth De Cardona, "Multinational Television," Journal of Cornmunications, (Spring 1975)
:126-127.
>,.,.,_,__,_..'""""'""--"'"'~"""''''--=----'""
___ """' __.....,.,__ ~..-
•• __ -~~··
..........,._...,....._,_~-·~...,
-~-,._,......_._."~-
... ···~ _ .............~.,
. --·-"'"' '
... - .....__.,..,•..-.... >~--~-----
~__......._.......,_
:
-----,~--"'-~-~.._,_,. ---""'·~~
39
Table 9
Sponsor Investment in Colombian Television
(in millions of Colombian pesos per annum) 30 pesos - $1
l. Colgate-Palmolive
25
2. Lever Brothers
12
3. Cicolac, La Rosa,
12
California Maggi
4. Lotteries, raffles 10
5. Miles laboratories
6
6. Ley Department Stores 6
7. Grasco Soaps
6
8.Banks
9. Luz, Postobon
10. Insurance Companies
ll.Cheesebrough Ponds
12.Johnson and Johnson
13.Quaker, Inc.
14.Bayer Laboratories
15.Construction Bonds
6
5
5
4
4
4
4
4
Source: Jornal of Communication, Spring 1975, pp. 126-127.
The multinational company has the capital for
massive investments in television in order that it may
disseminate its own particular consumption values.
Barnet and Muller write that Procter and Gamble spends
more on advertising than on its global payroll. 5 3
This
evidences a clear consciousness of the capacity of communicaticns to act as a mechanism for consolidating
economic control over an industry.
This consciousness is apparent in the extent
to which advertising support follows lines of nationality
in Colombian television.
In a 1975 study conducted by
the author on 14 consecutive evenings of prime time
Colombian television, it wasfound that there was a difference of less than two percent in the degree to which
American sponsors supported American programs and
Colombian sponsors supported Colombian programs.
The
53 Richard Barnet and Ronald Muller, op. cit.,
:146
40
relationship between national origin of program and sponsor was demonstrated in the construction of a percentage
table of commercial time.
Table 10
Commercial time
on u.s. programs
N == 202
Commercial time
Colombian shows
N = 572
American
55.4%
Other
3.5%
Colombian
41.1%
112 min.
7 min.
83 min.
2.8%
57.2%
16 min.
327 min.
40%
229 min.
The study also found that the ratio of MNC to
local sponsors in prime time minutes was approximately
3.5 to 4, nearly equal, and that the summed prime time
share of American programs and commercial equaled 35.5
percent of prime time broadcasting on the two national
channels.
An implication that might be drawn from those
relationships is that MNC advertisers in Colombia give
economic support to the broadcasting of imported programming by direct sponsorship investment.
Another means of imposing programming objectives
is apparent in Venezuela, where the association of companies that advertise on television is dominated by many
of the giant multinational companies.
ANDA, the National
Association of Commercial Sponsors, includes General
Electric, Sears Roebuck, and Procter and Gamble on its
nine-company Council of Directors.
Nearly half of its
66 active members are multinationals.
~--
..., . . , ....... "''-"''_,,_.._,_.
..,........,~,,,,,,,_"""'."'''""'""'""=-<>.-~.<>--
..
----~?--·.-...o
....
. --_.
. ..
------------~..,
These include:
...
....,~-~~-~-
-~.-·-
. . . . . .,. .__ _.. __ .. _. . _ . . . . . . __.._.___
~_
. . . . . . . _..,i
41
Aramco Steel
Beecham
Bristol-Myers
Coca-Cola
Celanese
Cynami d
Chrysler
Del Monte
Ford Motors
General Motors
Gillette
Goodyear
Heinz
Helene Curtis
Johnson and
Johnson
Kodak
Knorr
Lever Brothers
Minnesota 3M
01 ivetti
Pepsi-Cola
Phillips
Rohl and Co.
Bayer Laboratories
She 11 Oi 1
Shulton
Vicks Chemicals 54
The companies listed here are only the most
readily identifiable.
The list does not take into
account those companies that are wholly owned or
partially owned by MNCs and operating under another name.
The proclaimed primary objective of the sponsor
organization is "to protect the common interests of its
members as buyers of publicity."
55
These interests are
primarily economic and find expression in lobbies for program preferences and greater advertising time.
Befo~e
1976, thirty percent of Venezuelan television consisted
. l messages. 56
o f commercla
Reacting to the salience of
this manifestation of foreign interest in television,
the Venezuelan government imposed regulations in January,
1976 that limit commercials to 12 minutes an hour.
54A n t.10n1o
. p asquaLl,
, .
op.
55
Ibid.,
cit.,
57
It
:116-117.
:113.
56
world Communications, United Nations Educacational, Scientific and Cultural Organization, (Paris:
1975).
57Variety, (March 31, 1976) :88.
J
""
""'~' '"~rr.,.,T,O• ~-«" ~~·--·····"-""~
......, . .
.,.__..,.~
, , _ , _ _ _ _ ~,~~---
~-~ ...... ~~----~--W~~-
'
.......... ~-~-~-~-_,....,...,_.~..,..,._,..,,,,,.,_,.._...,._.,.....,._~LT- ---·... ··--------..,.,.......-..,.=.,_.~~-~----.-.....-.T-.....,;J
---
-
..
----
~
42
~
remains to be seen if other Latin American governments
will react to the Nordenstreng and Varis report that 26
percent of Latin American television is composed of
adver~
tisements.
An example of a country that has nationalized
its television and at the same time has become a bastion
of consumerist emission is Peru.
Thirty-seven percent
of the broadcasting time on Peru's three governmentowned channels is devoted to advertising. 58
As else-
where in privately-owned operations, much of the advertising messages are on behalf of multinational companies.
Channel 5, which earned 63 percent of all advertising for
television income in Peru (1969), gained 11 percent of
.59
its revenue from Procter and Gamble and Colgate-Palmolive.
Both advertising investment and the reporting of the
Vision survey that 80 percent of Peruvian prgramming is
imported offer another perspective of Annibal Quijano's
assertion that the Peruvian leaders are linked to corporate monopolies.
Advertising Agencies.
The opening of new markets
in Latin America by the multinational corporation has
occasioned an expansion in the same markets on the part
of U.S.
advertising agencie~~
58
The growth of manufactur-
world Communication, op. cit.
59 Richard Barnet and Ronald Muller,
:146.
op~ cit.,
.
~-
..
-------._,._....--
43
ing investments on an international scale
~nd
the similar
rise in U.S. advertising activity abroad is reflected in
the foreign billings below.
Table 11 indicates that
several of the largest agencies lRd the greater part of
their billings outside the United States in 1975.
60
Table 11
1975 Billings of the 10 Largest U.S. Agencies
Agency
1975 Total
%Outs ide
Outside u . s . u . s .
T
1. J. Walter Thompson
2.
3.
4.
5.
6.
7.
8.
9.
1 0.
Young and Rubicam
McCann-Erickson
teo Burnett
Ted Bats and Co.
Ogilvy and Mather
BBDO
Grey Advertising
Foote, Cone & Be 1 d i ng
D1 Arcy, McManus &
Masisus
on
on
on
on
on
on
on
on
on
52%
40%
70%
36%
54%
54%
30%
28%
31%
329.5 million 1 21. 2 million
39%
9 00. 1
800.9
77 5. 1
623.0
604.0
5 81 . 6
525.0
399.3
39 6 . 4
m 11 ion 467.3
m 1 1 ion 324.3
m 11 ion 544.3
m 1 1 ion 233.0
m 11 ion 323.7
m 1 1 ion 31 5. 5
m 1 1 ion 1 55. 1
m 1 1 ion 1 1 2. 3
m 1 1 ion 1 2 1 . 2
mi 1 1
mi 1 1
mi 1 1
mi 1 1
mi 1 1
mi 11
mi 1 1
mi 1 1
mi 1 1
Source: AdvertisingAge, February 23, 1976.
Comparing these percentages of international
billings with the 1966 and 1970 percentages of the three
largest agencies, the proliferation of their activity
becomes apparent. 61
Table 12
International Billings of 3 Largest U.S. Agencies
(in percent of total billings)
1966
1970
1975
1 . .J. Walter Thompson
34 .. 5%
43.1%
52%
2. Young and Rubicam
21.4%
31.3%
40%
3. McCann-Erickson
37.5%
55.0%
70%
44
The financial strength of U.S. advertising
agencies abroad is nowhere more apparent than in Latin
America.
In 1968, U.S. firms had interests in half or
more of the agencies in nine of the 16 countries surveyed
by Advertising Age.
By 1970, 14 of these countries had
more U.S.owned agencies than they had domestic agencies? 2
Furthermore, Advertising Age reports that most of these
U.S. agency subsidiaries were leaders in total billings
for their country.
In 1968, a U.S. agency subsidiary
was the leader in Argentina, Brazil, Chile, the Dominican
Republic, Ecuador, Honduras, Panama and Peru.
In 1970,
three more countries, Nicaragua, Guatemala and Uruguay,
had their domestic leaders supplanted while the other
eight remained under U.S. agency leadership.
In 1975,
the ratio of the U.S. advertising agency hegemony was
sustaineC:. by trade-offs; Colombia, Bol via, Costa Rica,
and Venezuela produced billings for new U.S. subsidiary
leaders while Argentina, Ecuador, Honduras, Nicaragua,
and Uruguay were newly-led by domestics. 63
Table 13 contains data on the rank ordering of
the top agencies in each Latin American country for 1975.
McCann-Erickson and J. Walter Thompson are seen as the
64
..
f.
.
th e reg1on.
.
'1rms 1n
d om~nant
62 Advertising Age,
(March 31, 1969 & March 29,
63 Ad
(March 29, 1976)
1971)
..
ver t 1s1ng
Age,
e4 Ibid.
45
Table 13
Top Agencies in Latin America - 1975
Country
Agency
Argentina
Sagarra Propanganda
Casares-Grey Advertising
McCann-Erickson
J. Walter Thompson
Kenyon-Eckhardt
Publicidad Fabres
Promoplan Ltd.
Leo Burnett
Propaganda Sancho
McCann-Erickson
APCU
Young and Rubicam
Organizaciones Norlop
McCann-Erickson
McCann-Erickson
J. Walter Thompson
APCU
McCann-Erickson
Noble and Associates
J. Walter Thompson
Istmo Publicidad
McCann-Erickson
McCann-Erickson
McCann-Erickson
J. Walter Thompson
Corp a
J. Walter Thompson
Leo Burnett
Young and Rubicam
Brazil
Bolivia*
Chile·
Colombia
Costa Rica
1
Dominican Republic
Ecuador
Guatemala
Honduras
Mexico
Nicaragua
Panama
Peru
Uruguay
Venezuela
Source:
Rank
1
2
1
2
1
1
2
1
2
1
2
1
1
2
l
2
1
2
1
2
1
2
1
1
2
1
2
1
2
Advertising Age, March 29, 1976. *Bolivia 1974
billings - not included in 1975 survey.
In Latin America, the leading agencies are
heavy users of the television medium. The share of their
business with television runs from 35 percent to 80 percent,.;
Typical examples are:
Casares-Grey (Argentina)
70 percent, Sagarra Propaganda (Argentina) 35 percent,
J.W. Thompson (Brazil) 64 percent, J.W. Thompson (Mexico)
64 percent, Noble and Associates (Mexico) 76 percent,
:.
•.
.. ....,_ ,_._., •• .,._......,___,._..,,.,_,_.,.-_-=--.-..·~-.-.,·-o;-•r~,---,-- ..,.. .. .,..-... ~,,_..._~_..,.....~, .... _._.,_,~ _ _ _ ....___:;,
1•~-......-,.,...--.-,.,_.,_, __ ""'-""'.,._,... _...,....._~~.._.-<>--<~,-..._~~"~"-"''"'' "d•··-~~•-·--...._,..~,,..._~,,,,..,.,.~.,....,
46
65
J. W. Thompson (Peru) 68 percent.
Wells makes the statement that "The American
agency is overseas to provide services for its chief
customer, the American consumer goods manufacturer." 66
An international agency-client directory would be a useful tool to test such an assumption.
However, the only
approximation of such listings available to the public
is the listing of accounts gained and lost by American
agencies in Advertising Age. If one looks at the accounts
gained and lost by U.S. subsidiary agencies in Latin
America during the years 1974 and 1975, it would seem
that the host countries are more frequently mentioned.
U.S. agencies do handle many local sponsors.
But given
the greater percentage of domestic manufacturers this
reading is misleading.
A more accurate measure would
be to survey the accounts gained and lost by the domestic
agencies.
While American agencies list many multinational
manufacturers as new and former clients, few multinational companies
~e
listed among the gains and losses of
the domestic agencies.
Harry Clark, Senior Vice-Presiden
of J. Walter Thompson, explains the situation this way:
"The multinational company has become much more brand
65 rbid.
66Alan Wells,op. cit.,
:132.
47
{--~·-·· ~-
...-......~--~..- .. ~~'·"'·~.. ""'--··-~""'--"'""~·-d'"""""""-'~""'.....,-"='~-'""...... =-~·"--""'""""""""-"•"""~-~--------~-----,._-..._..---~-.-""'""""'~"'"-·=>J«'""'-"'-'~~---- ..--...-.,..-=·""'·
\
oriented.
of origin.
It thinks about its brand beyond the country
It looks for a single agency to handle it in
a number of markets." 67
Clark's remarks, included in an
article for Television-Radio Age, are corraborated from
other sources in the same article.
It is mentioned, for
example, that Grey Advertising, doing its 1975 business
in 15 countries, served Proctor and Gamble in 12, Revlon
in 14, and Block Drugs in 13.
Ogilvy and Mather, doing
business in 29 countries, had American Express in 23,
Unilever in 20, and Shell in 17.68
The large U.S. advertising agencies can exploit
an advantage in that they can take proven techniques,
developed and paid for in the U.S. market, and transfer
them to the Latin American market at little extra cost.
The multinational corporation reciprocates by holding out
the promise of billing at an international scale.
It is in the interest of the advertising agencies, like that of the sponsors, to promote the commercialization of television. This common objective has
resulted in the formation of lobbies to influence government and public attitude towards commercial television and
tbe role of advertising agencies.
According to Pasquali,
the Federation of Venezuelan Advertising Agencies list 14
67 Leon Morse, "Agency Ventures Abroad Find the
Going Tougher," Radio-Television Age, (July 7, 1975)
:86
6 8Ibid.
48
members, including J. Walter Thompson, McCann-Erickson,
1
Grey Advertising, Grant Advertising, Leo Burnett, and
Young and RubLcam.69
It was noted earlier that commercial
time in Venezuelan television was reduced in January,
1976 from 30 percent to 20 percent; a major defeat for
the advertising agency and sponsorship lobbies.
But the
lobbies are still powerful in protection of their narrow
interest.
For example, in 1975 President Carlos Andres
Perez of Venezuela announced that
his government planned
to administer a tax on advertising income.
The adver-
tising agency lobby was joined by the sponsorship lobby
in quickly denoucing the measure, alleging that it would
cost them the loss of 30 million dollars and would contribute to unemployment.
combined
lobbi(~s
Before the protest of these
oi MNCs and national entrepreneurs, the
government discarded the plan.70 Again, we can see the
establishment of social realtionships based on economic
and class interests, over-riding concerns
~f
nationalism.
Dist!_·ibution. According to Nordenstreng and
Varis, about one-third of U.S. foreign sales of televisfun
71
programs go to Latin America.
ABC, CBS, and NBC no
~ 9 Antonio Pasquali, op. cit.,
:119.
70 Louis Ramiro Beltran, "Politicas Nacionales
de Cornunicacion en America Latina,'' ·Nueva Sociedad,
(Septemb~r, 1976)
:11.
71 Kaarle Nordenstreng and Tapio Varis, op. cit.,
: 32.
1
49
longer play the major role in distribution of television
abroad.
They are currently restricted by the Federal
Communications Commission to selling abroad only those
programs which they directly produce, and this is limited
mostly to news, public affairs, sports and documentaries.
As the majority of U.S. programs were found by Nordensteng
and Varis to be of the entertainment variety, it is the
subsidiaries of the major studios that are most actively
exporting U.S. programs.
Guback (1973) has demonstrated that the international expansion of American business in general and
film distribution in particu1ar has been actively encouraged and aided by the U.S. government.
He notes that
the Webb-Pomerene Export Trade Act of 1918 first permitred
domestic competitors to cooperate in trade by forming
export associations which might otherwise have been held
illegal under the Sherman and Clayton Antitrust Acts.
Guback states that in effect, "this exemption allowed
American companies to combine and fix prices and allocate
2
customers in foreign markets."7
Under the provisions of the Webb-Pomerene
legi~
lation, the subsidiaries of the major studios formed
the .,Motion Picutre Export Association of America.
..
72
.
Thoms Gunback, "Film as International
Business," Journal of Communication, (Winter 1974)
:93.
The
50
Nordenstreng and Varis survey estimates that the member
companies of MPE account for eighty percent of the total
U~S.
foreign sales of programs.
Warner Brothers dis-
tributes The Waltons, Wonder Woman, and The Streets of
San Francisco.
Paramount distributes Mannix, Mission
Impossible, and Star Trek.
73
Screen Gems distributes
among others The Flintstones, Bewitched, Father Knows
Best, and Rin Tin Tin.
MCA distributes A Family Affair,
Ironsides, It Takes A Thief, and The Virginian.
Twenti~h
Century Fox exports a representative sample of Americana:
Peyton Place, Lost in Space and Batman.
Viacom Interna-
tional was established in 1970 as a spin-off from CBS.
It distributes Wild, Wild West, The Dick Van Dyke Show
and Perry Mason.
distributes
Invaders.
~en
The International Division of ABC Films
Casey, The Fugitive, Combat, and The
Of the NBC exports, best known is Bonanza,
which it has been estimated, is watched by 250 million
people around the world every week.
Others from NBC
include Dr. Kildare, Get Smart, The High Chapparal, and
I . ·s py. 74
According to the September13, 1976 edition of
Television-Radio Age, costs of production have already
been,"more .than compensated by sales in the United States,
73
:A40.
74
Television-Radio Age,
(September 13, 1976)
Ka~rle Nordenstreng and Tapio Varis, op. cit.,
51
allowing
u. s.
uistributors to easily undersell their
competition abroad.
For this reason, the price in a
region such as Latin America, "is one-tenth to one!
twentieth of what it would cost these countries to produce such programs."75
As an illustration, the produc-
tion costs for a novela" or soap opera in Bogota, Colombia
runs about $1,000 dollars per half-hour chapter and may
go up as high as $20,000 dollars for a special program. 7 6
On the other hand, the cost in Colombia of a half-hour
episode of a U.S. program runs between $190 dollars and
$200 dollars.
The prices being paid by Latin American
nations for U.S. television programs in 1976 are pre77
sented in Table 14.
The low cost of U.S. programs has reduced the
incentive for many Latin American producers to compete.
A Guatemala television executive is quoted by Vision as
stating:
"We try to make our own dramatic series but
the costs of production result in being so much higher
than tre imported series. " 7 8
It is therefore quite nat-
ural, according to this executive, that fifty percent of
the programs shown on Guatemalan television are of U.S.
75Television-Radio Age, (September 13, 1976)
A56.
76v arlety,
.
(March 31, 1976)
· 77variety,
(April 21, 1976)
78v·
.
. lSlOn,
op. Cl·t . ,
:11
:41
:40
52
, origin.
Table 14
Prices of U.S. Programs and.Feature Films 1976
Latin American Market
! Country
Price range per
Price range per
half hour episode feature film
; Argentina
$500 - 800
$1600 - 4000
:Brazil
$2000 - 3000
$5000 - 10000
Chile
$65 - 75
$350 - 400
. Colombia
$190 - 200
$700 - 1000
• Costa Rica
$60 - 70
$200 - 500
Dominican Republic
$100 - 150
$225 - 300
Eduador
$55 - 75
$200 - 250
: El Salvador
$50 - 55
$400 - 450
Guatemala
$70 - 80
$250 - 400
Honduras
$30 - 35
$135 - 150
·Mexico
$900 - 1100
$10000 - 50000
Nicaragua
40 - 50
$200 - 300
Panama
$60 - 70
$350 - 500
Peru
$120 - 125
$750 - 1100
Uruguay
$ 75 - 85
$350 - 550
Venezuela
$500
600
$2000
3500
Source:
Variety, April 21; 1976.
P.40 ·
Most countries cannot fill the hours of broadcasting with home-made products, nor can they afford to
shop around fastidiously for the programs they want.
Convenience is a second important factor in the merchandizing of U.S. programs.
The large distributor members
of MPE have salesmen who bring to the television station
programs which appear in long series.
It is very con-
venient and economical to purchase programs in this manner.
As Nordenstreng and Varis report:
"Traveling abroad
, 1v
and buying idividual programs multiplies the cost per
"
program hour.
In practice,then countries with scanty
resources are at the mercy of the international distribu.
(,,._, .....,,..,-,, ~"""' •. ~>.-,.,~-.~--"""-' ,...............~---
-·>-.. . .
"-'"~·· '"'"'""-""'"'".,..__.,~ ~·~~--y_...,...__.,____ . _, ........ . -.. --~-~-..
..
,
___.-,~- ,_,__~·----R---.-..~~-.-. .--~...-.~~~-,.....,....--~~-..0.·>-...;. .....r-.J
53
T"'"''''''"""~-··~-..:··-~-·-~··~·-..-~~~79""--~
tion system."
..-·.
-·
··~~"·---------·--------·
.
--~~·-· •·~---~·~-·.,••·~-•·•·---~--··-·"·""
Simply stated, cost and convenience are
primary factors in the program planning of most
Lat~n
American countries.
Station Ownership.
Following an uninterrupted
demonstration of hegemony since 1960, foreign interest is
on the wane in television stations of Latin America. This
diminishing of external ownership is due to recent protectionist legislation that is favoring national ownership of television stations in Argentina, Brazil and the
countries of the Andean Pact.
Brazil prohibits TV sta-
tion ownership by anyone other than a native-born
Brazilian.
Argentina has gone to government ownership
of television. Colombia, Ecuador, Peru, Venezuela, Chile
and Bolivia have drafted the Andean Code on Multinational
Enterprises which would force divesture of station ownership by
Pact.
f~reign
investors in the countries of the Andean
80
Nonetheless, foreign interest remains strong in
areas like Central America, where nationalist legislation has not been implemented.
51% interest in 5 Central
In 1960, ABC acquired
Ame~ican
television stations,
later known as the Central American Television Network.
79 Kaarle Nordenstreng and Tapio Varis,
op. cit., :54.
80
Paul A. Thorpe, Jr., "Transnational Enterprises and International Regulation," International
Organization, (Winter 1976) :47-73.
54
An article in the January, 1976 edition of the El
' Salvadorean journal, ECA, reports that ABC maintains its
financial interest in television stations in Guatemala,
81
El Salvador, Honduras, Costa Rica, and Panama.
In
1968, ABC enlarged its Latin American operation when it
invested in the largest channels of 6 countries in South
America.
These stations were grouped together in the
Latin American Television International Organization or
LATINO.
It is this network that
of interest by ABC.
has witnessed divesture
Subsidiaries of ABC, as listed by
The Directory of Inter-Corporate Ownership - 1974, are
limited in South America to Primera Television Ecuatormna
82
in Ecuador _ and Venevision in Venezuela.
Aware that the total market is no longer open
to them in Latin America, NBC and CBS are phasing out
their investments to Radio Caracas in Venezuela and an
affiliate station in Mexico City.
CBS found even less
inducement to invest in the region, although it does
-t
mai~-
{.
tan an affilate station in Mexico City.
1\..
"'
Arising from the waning of foreign ownership of
.
television in Latin America is
phenomenon unanticipated
1,..
by both Herbert Schller and Alan Wells.
A
These two
81
Armando Mattelart, "Una Estrategia Global
para America Latina,n ECA, (January-February, 1976) n33.
82
Vol_.:__!_,
~~e Directory of Inter-Corporate Ownership
(New York: 1974)
: 34
55
scholars had premised their respective models of communi1
cation¢ imperialism on station ownership by foreign interests, documented by J. Frappier in an article for The
83
NACLA Newsletter in 1969.
Their studies implicity
1
assumed that the acquisition of ownership by national
.IV
intersts would have a significant effect on the MNC
1\
strategy of spreading consumerism.
the case.
This has not been
Programming in Latin America remains a high
percentage of U.S. imports as well as local soap operas
and variety shows that, as Smythe would say, feed the
drive to consume.
This situation is derived in large part
from the fact that national owners, like foreign owners,
hold commercial value as the sole criterion for television and are passive guardians of the public interest.
The corporate monopolies who are the new owners of Latin
American television stations are citizens of the continent.
but their economic interests are allied with the policies
of the multinational corporations.
The theory of Andre
Gunder Frank that dependency relations are replicable in
Latin American countries on a metropolis -periphery basis
provides a key to understanding this development.
The
demands of capitalist production internalized by the new
0
station owners has jnsured the continuance of MNC influence.
Thus, the Mexican network,Televisa, the largest
TV organization in the Spanish speaking world, is
...
~r»~>
._,
·'""'""-·,--,~~
<><'>'..,__.,,,,,._.A"•~·
__ ,_...., __.,.~..-....><-••••J•--·~-----·-
..
_.,.,...~,_.,,-~..-~-·c·-•
..
-.-,..,..-....,.~--<.,.__,.
co~
'
_ _ _ _ .._...___,_ _ ,. _ _ ,_,..,.,.,,
56
headed by a major stockholder in U.S. corporations.
Emilio Azcarraga, Jr., a fiftj percent owner of Televisa,
is reported to have large holdings in American Airlines,
Marriott Hotels and Western International.84
Azcarraga
also owns 20 percent of the stock in each of three
Spanish-language television stations in the United States:
KMEX (channel 34) in Los Angeles, WXTV(channel 41) in
New York City and KWEX (channel 41) in San Antonio, Texas.
Moreover, he owns 75 percent of Spanish International
Network which supplies programs and sell ads on 14 stations programming to the u.s. 85
The conglomerate holdings of Azcarraga are
dwarfed by those of the other
Televisa, Romulo O'Farrill.
fift~
percent owner of
The O'Farrill major holdings
include: a chain of 7 newspaper dailies, the national
radio station XEX, 18 magazines ranging from risque pulp
to general interest, General Motors and Volkswagon
deale~
ships in Puebla and Mexico City, and of course, Televisa~
These two elites, Azcarrago and O'Farril, essentially
control television in Mexico.
For, according to Variety,
"Televisa has no opposition (in Mexico) and faces little
84Armando Mattelart, op. cit.,
:34
8 5 Richard Ray Cole, The Mass Media of Mexico:
Ownership and Control, (University of Minnesota, Ph.D.:
1972)
:169
8
~Ibid.,
161-162.
57
competition from Channel 13, which went bankrupt and was
acquired by the government."
that
Variety goes on to report
Televisa consists of four channels and is concen-
trated mostly on soap operas and variety shows. 8 7
Another network with virtually no opposition
is TV Globe in Brazil.
This giant of Brazilian television
returns $120 million a year in gross revenue entirely
from advertising.
-
The profitfable business is run by an
American, Joe Wallach.
But TV Globe is just one property
in a huge corporate empire.
Variety reports:
empire is now run by Robert Marinho.
"The Globe
It includes radio
stations, a publishing company, the hugh television operation, a record company, as well as film interests." 88
Globe has followed the pattern of U.S. networks from programming to corporate diversification.
As with Televisa,
its content and orientations are not essentially different
from the content and orientations of American television.
Although Televisa and Globe are the largest
examples of a Latin American television network interdependence with North American interests, the model is
repeated in much of Latin America where station ownership
is no longer under foreign control.
In Colombia, the
government agency, Inravision, rents out commercial space
87v ar1e
. t y,
88
Ibid.,
(March 31, 1976)
:42.
1
~.--~..,.,~..,_.,,..,_ -·-~--,,_~,,,...,.c~•-·-'~...- ........-~l'.",
~·
,_, 0 ' " ' ' " · - • •
:41.
--~ _,~,~.~-·--......._... .... ~ '-~~-"""---• __..,..,._..,_..,_~··•·-"""'"'""',._..._,......
. , . . , _. . .
.
~.~-~v ....-----~-------:
\
...,___.-,... .,..._ __ ~....,,-..~---·...,_.._~,..,.,.,.,....,
58
to private programmers on two channels.
The large&-of
the three major programmers, RTI, is a subsidiary of
Titulos Ltd., which also runs a publishing house and has
89
interest in the Banco Panamericana.
Among the programs
RTI scheduled for 1976 were:
Kojak, The Virginian,
Space 1999, The Avengers, Mash, and The World of Disnev.
RTI programs these exports to maintain parity with its
competititors.
One competititor, Punch, included
Petrocelli, Mission Impossible and Emergency on its 1976
schedule.
However, the third programmer, Caracol, appears
to be assuming leadership in the scheduling of American
exports.
Caracol lists on its schedule for 1977 the
latest violent serials the U.S. has to offer including
Starsky and Hutch, Serpico, The Six Million Dollar Man,
90
T~Bionic Woman, Delvecchio, and S.W.A.T.
As demonstrated
earlier, the profits of these programmers accrue largely
from MNC investors.
In return,the programmers in
Colombia and the station owners in a Mexico or a Brazil
act as deterrents to institutional change by programming
consumerism in bulk.
Evelina Dagnino offers as good of
a summarizing description as any.
89 Ibid.,
She writes:
:88
90Programacion y tarifas 1976: RTI, Punch,
Caracol, Programacion y tarifas 1977: Caracol.
(program
schedules and commercial rates)
59
... tbe effects of cultural dependence on the lives of Latin Americans
are not a consequence of an "invasion"
led by a foreign enemy, but a choice
made by their ruling class, in the
name of national development. Through
this choice, national life and national
culture are subordinate to the dynamics
of the international capitalist system,
submitting national cultures to a form
of homogenation that is considered a
requirement for the maintenance of an
international system.91
Summary.
This chapter has demonstrated that
massive economic penetration by MNCs in the form of
sponsorship, ad agencies, distribution and station ownership is related to the broadcast composition of Latin
American television.
Furthermore, it is shown that the
interests of the domestic industrialists, who control
some of the largest television stations in Latin America,
follow the diversification pattern and profit maximization strategy of the MNCs.
The next chapter will analyze the reciprocal
relationships of the institutions within the commercial
structure of Latin American television.
The objective
is to furth.er the understanding of the mechanisms of
MNC economic penetration and domestic collaboration.
91 Evelina Dagnino, "Cultural and Ideological
Dependence: Building a Theoretical Framework," in
F. Bonilla and Robert Girling (Eds.), Struggles of
Dependency, (Stanford, 1973).
60
IV. A Television-Dependency Model
The analysis of commercial structures in this
study evidences a duel role for television in the dependency framework.
First, television reflects dependency in
the economic links within its own commercial structure.
Secondly, it sustains dependency by its capacity to transmit and
re~nforce
commercial values.
Television in Latin America reflects dependency
as a natural development of the international capitalist
system.
It is the same as such other industries as motor
vehicles and pharmaceuticals, a microcosm and outgrowth
of the economic infrastructure.
The changing objectives
of this infrastructure are documented in the shift of
emphasis from extractive industries to manufacturing.
The concentration on manufacturing by the MNCs has enlarged the role and importance of television.
Multi-
national companies and national entrepreneurs alike are
aware that television that is an effective mechanism for
transmitting consumerism.
As the findings of the pre-
vious chapter indicate, a clear consciousness exists on
the part of multinational companies and their domestic
counterparts of how to utilize television for economic
and ideological purposes.
The dependent nature of television in Latin
America·can be described by different models for the
different levels of abstraction involved.
In a model
61
describing the structure of economic and cultural penetration, U.S. program exports to Latin America is the
central mechanism.
1
This model incorporates the economic
and social relationships in the television commercial
structure that were analyzed in the previous chapter.
The reciprocal ties between MNC sponsors and
Multinational Advertising Agencies are as strong as any
in the model.
The multinational corporation has opened
new markets for advertising as indicated by the rate
of agency growth in the l970ts.
The replication of the
client-agency relationship and advertising campaign in
several countries has contributed considerable billings
to the advertising agencies with little additional creative effort.
The MNC sponsors gain, in turn, from the
marketing experience and loyalty of the multinational
advertising agencies.
The linkage also offers image
continuity for the sponsor's brand:
an important factor
for influencing the more mobile upper
i~come
groups who
are their target audience.
~NC
sponsors and U.S. Programs are linked ac-
cording to the findings of this study.
Venezuela pre-
sents an example of how MNC sponsors organize lobbies
to pressure for their special interests, including program preferences.
The study of sponsorship in Colombia
showed that commercial sponsors followed national lines
of origins in program investment.
The apparent reason
62
Reciprocity Among Economic-Cultural
Penetrators in Latin America
U.S. Owned
Stations
u.s.
Distributor
Domestic
Station
U.S. Programs·
u.s.
Mul tin at ional
d. Agencies
Sponsors
Domestic
Programs
Domestic
Sponsors
Domestic
Ad. Agencies
63
Model of Economic and Cultural Penetration
of Television in Latin America
:rograms mostly U.S. productions}
ID."8.-owned
~on
~. S. proGrams'
Broadcast
feinforces taste for similar fare
automatic outlet for distributor)
luStation
.s.
Owned
r.s.
Distributor
(
programs for high ratings
commercial fare,
ational
tat ion
tu.Broadcast
S . Programs'
taste for similar fare
l
!
National
sacrifices production to distributor)
IU. S.
~-S~t~a~t~i~o~n~----~~l----------------------------------------~~D~i~s~t~r~i~b~u~t~o~r~~
low price and convenlence
billings are world-wide in
scope~
fu. s.
jMNc
1
Ad.
~nsor______~~(-----------------------------------------LA~g~e_n_c~x~----expertise, loyalty, brand continuity
lobbies and invests in broadcast/
Scmsor
~
lobbies for
ju.s. Ad.
~cy
_j
coiT~ercial
broadcasting)
I
U. S. Programs!
~~----------------------------------------~--B_r_o_a_d_c_a_s_t____~_
sustains Ad. Agency clients
~>iNC
Sponsor
Dom~stic
emulated by domestic sponsors)
Sponsor
!Agency
emulated by domestic Ad. Agency)
Domestic
1\d,..Agency
ll.J.S. Program
!Broadcast
emulated by domestic program)
!Domestic
!Program
IV .s. Ad.
_....;.,.::
----
64
for favorable MNC attitudes toward U.S. programs is incorporated in Smythe's argument that these programs reflect certain values and stimulate material purpose.
The ties between Multinational Advertising
Agencies and U. S. programs are indirect, (dependent on
other relationships), but significant nonetheless.
The
formation of U.S. agencies in Venezuela into a lobby for
a commercial broadcasting system is an action that favors
low-cost U.S. imports.
The U.S. programing reciprocates
by promoting the gospel of the advertising agencies:
consumerism.
U.S. Owned Stations and U.S. Programs maintain
visible ties.
As indicated by the Nordenstreng and Varis
and Vision surveys of Central American countries, stations
owned by ABC program
programs.
a high percentage of U.S. exported
Exported programs from the U.S., when con-
sidered solely by commercial value, are not only inexpensive, of high technical quality and convenient to
acquire, but also knowledgable and explotiative of the
formulae for high ·ratings.
Cultural penetration is mani-
fested here by the development and reinforcement of taste
for these formulae.
·.
'The relationship between U.S. Owned Stations
and U.S. Distributors has obvious advantages for both
sides.
As illustrated in Central America, the U.S. owned
station is almost an automatic outlet for the U.S. dis-
---~--
65
tributor.
station.
The distributor may, in fact, be owned by the
ABC stations in Latin America were fed programs
largely by their Worldvision distribution arm, according
to Alan Wells.
But cross-ownership nonwithstanding, the
ratings, cost and convenience of product weigh in favor
of U.S. distributors.
This study finds that National Stations and
U.S.programs are linked by economic interests.
The na-
tional stations, mostly owned by conglomerate companies
like those of Azcarrage, O'Farrill and Marinho, are
interested primarily in profit.
They therefore aim to
promote popular commercial fare at low cost; objectives
very compatible with the qualities of U.S. exported programs.
As in the relationship with U.S. owned stations,
U.S. programs reinforce tastes for similar programs.
The final reciprocal relationship in the model
is represented by National Stations and U.S. Distributors.
In exchange for sacrificing national production to the
to the
in
~.S.
distributor and granting a foreign hegemony
program~ing,
the national stations gain in lowered
operating costs and greater convenience.
The above "penetration model" describes the
primary and most direct mechanisms of economic and
cultural penetration in the commercial structure of
Latin American television.
Another aspect of cultural
penetration takes place in the domestic imitation of
66
foreign production and philosophy.
This results in na-
tional emulation (usually inferior) of internationally
marketed material.
Thus, in a second phase of media
development such as had occured in Mexico and Brazil,
U.S. programs and commercials are providing the values
and formulae for national program and advertising production.
As an example, Guatemala, which by importing
90 percent of its programs is the most culturally dependent country surveyed, has 88 percent of i·ts_;program.-:'
ming comprised of entertainment (films, series and shows).
Mexico, one of the most autonomous countries in production with 50 percent importation of programs, still
dedicates 75 percent of its programming to entertainment.
If the 16 percent that comprise daily news is added in,
only 9 percent remains for programs in the categories of
documentary, educational, dramatic plays, sports, current
affairs, and children.92
The dependence of local firms
on U.S. agencies in advertising is illustrated by the
remarks of Geraldo Alonson, head of the Brazilian firm
Norton and president of the Brazilian Association of
Advertising Agencies.
As Alonson puts it, "It is im-
portant to Norton to establish an international connection
with~~n
American agency.
It's not reasonable for us to
expect to keep our position in Brazil without knowledge
92
Barnet and Muller, op. cit.,
:143-144.
67
from the United States." 93
This second generation of penetration is also
evident on the level of economics.
The reports of both
Pasquali and Beltran indicate that MNCs have philosophical junior partners in the special interest groups organized for the defense of commercial television against
public interest-minded reformers.
The commercial
interests of the multinational manufacturers and advertising agencies have become integrally related in television with the interests of the small fraction of national elites.
93.
Barnet and Muller, op. cit.,
:143-144
68
V. The Effect of Consumerism on Development
Whether or not the disseminationof consumerism
via television is good or bad for development depends on
the definition of development.
MNCs point to average
per capita increases and larger GNPs as evidence of development.
Yet, in the interest of an immediate return
on investment, MNCs carve their market out of those who
have money rather than supporting processes of income
distribution that may create a wider market in the future.
One result is that ECLA surveys are reporting increasingly disparate income distribution in the face of per
capita increases.
If the priority of development is to
attack problems of poverty, unemployment and inequality
through restructuring the income-distribution, health
and education systems; then it must be concluded that
consumerism has had deliterious effects.
This chapter
examines some of the significant effects of consumerism
on the elite and poor sectors of Latin American society.
The Elite Sector. According to Alan Wells,
consumerism is "the replications of the dominant country's
life style in the elite sectors of the subservient
country .;,94
It is noted by Barnet and Muller that this
ideology has had a cooling effect on reform.
94Alan Wells, op. cit.,
:132.
They write:
69
"In Latin America, the university radical who by his late
twenties is obediently sipping beer in front of
hi~
color
TV in a comfortable house in the suburbs is a stereotype.
Those who rent their comforts through installment debt,
no matter what revolutionary impulses may lie dormant
within them, do not like to think about, much less do
anything about, social change."
95
For at least one noted scholar, the success
of consumerism, as reflected in profits and industrial
emulation, is more insidious than the cooling of reformist zeal; it means that Latin Americans are being persuaded of their own cultural inadequacy.
Paulo Friere
writes that, "For cultural invasion to succeed, it is
essential that those invaded become convinced of their
intrinsic inferiority.
Since everything has its op-
posite, if those who are invaded consider themselves
inferior, they must necessarily recognize the superiority of the invaders.
The more invasion is accent-
uated and those invaded are alienated from the spirit
of their
o~n
culture and from themselves, the more the
latter want to be like the invaders:
dress like them, talk like them."
to walk like them,
96
The homogenization of culture that Friere and
95
:175.
Richard Barnet and Ronald Muller, op. cit.,
'70
'
Barnet and Muller attribute to the spread of consumerism
may be less a product of "invasion" than choice as far
as the elite sector is concerned.
effect is the same.
Nevertheless, the
An illustration of this
~homogeniz-
ation effect is found in the work of sociologist, Oscar
Lewis.
In his case study of five Mexican families, Five
Families, Lewis described the nouveau riche Castro
family.
Notable is the degree to which the family ad-
mires and imitates the United States and its rejections
of Mexican traditions.
The following passages were
drawn from his exposition of one day in their family
life: 97
Page 296- " ... nor was their any reading matter in the house with
the exception of some popular magazines and some copies
of the Reader's Digest scattered about the living room.
Page 306 - "David no longer missed the
breakfasts of tortillas,
refried beans and chile."
Page 307 - "David laughed aloud and ate
a great deal of pancakes.
These had become standard
breakfast for the family
ever since Isabel had bought
a box of pancake mix at a
neighborhood supermarket
five years ago."
Page 297 - "When she had finished in the
dining room, Josephine went
out to wipe off the yellow
and black Lincoln convertible which belonged to the
Senor."
97oscar Lewis, Five Families,
:296-327
(New York: 1971)
.
71
Page 325 - "They won't shrink. This
is American corduroy."
Page 327
"Next Isabel asked to be
shown Mickey Mouse socks
for Lourdes and bought six.
Page 306 - "Like other members of the
new middle and upper classes,
David was a great admirer
of the United States and
unquestionably accepted
many of its standards and
customs as superior to his
own.''
The Lewis study is of but one upper-middleclass Mexican family.
But the values and actions repre-
sented by the Castro family are easily visible on the
cultural fronts of Latin America.
The promotion of indi-
vidual desires over collective needs through television
programming and advertising is contributing to the replication of U.S. culture in the upper sectors of Latin
American society and the undermining of development
experiments emenating from other sources.
E. G. McAnany
elaborates on this argument:
That problem for most governments is
that the direction of social change and
development by offic~al plan and that of
outside investors is often contradictory.
Advocacy of rural development and dedication to self-sacrifice for one's country
through a government media program may
stand in sharp contrast to the life styles
and values advocated by prime-time television imports. Viewers are going to
respond to the more credible message and
accept the consumer message that their
leaderships have chosen to follow.98
98 E.G. McAnany, "Television, Mass Communication
and Elite Controls, 11 Society, (September, 1975) :44.
72
The situation presented by.the elite sector is
i
1
1
further illustration of Illich's wartiing that trucks can
do more lasting damage than guns.
The stimulation of de-
~mand for individualistic and luxury products via televisio~
i
; may retard the motivation for reform and development among
; the elite.
Consumerism may contribute to the achievement
of MNC objectives by inducing their affluent market to
defend their own particular positions of privilege without
concern for the needs of the nation as a whole.
The Poor Sector.
What effect does consumerism
via television have on those who cannot afford to buy?
We have already seen an indirect factor: the inhibition
of reform among the elite.
Until recently, speculations
of direct effects upon the masses of poor have been concerned with violence and revolution.
Barnet and Muller
quote Thomas J. Watson, Jr., Chairman of IBM, as worrying
not so long ago that if "we flaunt our wealth in those
people's faces, we shall drive them either to despair or
frenzy or revolution like none of the world has ever
seen." 99
The term given this phenomenon by social scien-
tists in development studies is "the revolution of rising
frustrations."
In this vein, mass communications re-
searcher . Daniel Lerner expresses his concern that the
psychological impact of consumerism on the poor will be
99 Richard Barnet and Ronald Muller, op. cit.,
73
to provoke rebellion:
Poor people everywhere have been
led to believe that something like
the levels of modernity achieved by
the western world in over 500 years
could be reached by the less developed
countries in their own lifetime. This
has turned out illusory. Hopes have
been dashed and expectations turned to
frustrations.lOO
However, the recent research that has been conducted on consumerism and the poor does little to suggest
that "a revolution of rising frustrations" is occurring.
On the contrary, indications are that both television
advertising and programming have contributed to a false
sense of being middle-class among the poor.
This spuri-
ous feeling, at odds with their basic needs, is evidenced in an ECLA study:
Certain durable consumer goods are
now subjective necessities even in the
lowest income strata, and many families
acquire more costly goods even at the
price of deprivation in other areas of
consumption.
Inquiries carried out in
1969 among families, mainly at very low
income levels and experiencing considerable underemployment, living in slums
and shanty towns in the cities of
Guayaquil and Santiago, revealed that
64.4 percent of the sample families in
Guayaquil and 81.4 percent in Santiago
posessed radios while 19.6 percent and
10.1 percent had television receivers. 101
100
Daniel Lerner, "Mass Communications and the
Nation State," in Mass.Communications Research:
Major
Issues and Future Directions, W. Phillips Davidson and
Frederick Yu ( Eds. ) , (New York:
1974) :90.
1° 1Economic Survey of Latin America 1973,
United Nations, (New York:
1975) :309.
74
Further statistical evidence of the spread of
consumerism, "even at the price
vided from the business quarter.
of
deprivation," is proThe Guide to Mexican
Markets is a publication designed to attract foreign investment in Mexico.
Included in its 1975-1976 edition
are tables of socio-economic stratification and of homes
possessing television in
~he
major cities of Mexico.
The ten largest cities appear in the combination of the
two tables below. 102
Table 15
_______E_c_on~mi~ Stratification of TV Homes in Mexico
Monthly income percent above
$U.S. 560
City
i co City
GuadalajarCl
Monterrey
Cd. Juarez
Leon
Puebla
Tijuana
Chihuahua
Mexical i
Tapico
~lex
8
6
7
6
6
6
7
6
6
5
Monthly income percent between
$U.S.240 & 560
37
34
36
34
28
33
37
40
34
32
Montliy in- TV Homes
come perPercent
cent below
$U.S. 240
83.8
71.3
70.9
74.9
6 7. 0
75.9
85. 1
69.4
88.2
69. 1
55
60
57
60
66
61
56
54
60
63
Source: Guide to Mexican Markets 1975-1976, pp. 28 and 219.
The above table indicates that, on average, 75%
of the homes in Mexico's ten largest cities have televisions while 59% of the homes in these cities have rnvnthly incomes of between zero and 240 dollars.
102
For manypoor
Guide to Mexican Markets 1975-1976,
(Mexico,
.. _. ..1? ·.~:-: ...~~?? ?.... .:.?._8 -~~~....?.~.-~ :_., _________ ,__ ",.~..····-~·----· .... --·······--«~-·-----~-----~--. ···~---·-"
75
families, television has assumed the stature of necessity.
The implications
of the survey findings in,
Guayaquil, Santiago and the 10 largest cities of Mexico
are, as the definition of development, different according
to perspective.
For example, Albert Stridsberg writes in
Advertising Age that we must shed our conventional ideas
about the needs of the impoverished individual, declaring,
"The psychological significance of his spending his money
on a transistor radio may be more important than the
physical benefit of spending the same money for basic
103
foodstuffs."
Obviously though, it is curious for an
advertising specialist to talk about the psychological
satisfaction of the consumer with such complete disingenuousness regarding the modern technology of manipulation as practiced by advertised agencies.
An interpretation less subject to self-interest
of the direct effect of consumerist ideology on the poor
is that advertising has enlarged the problem
tion.
~f
malnutri-
The basic foodstuff that Stridsberg would take away
for a radio is necessary for the survivial of a large
percentage of Latin America.
According to a study by
Alan Berg, malnutrition is the primary or contributing
caus~~of
death-
103
in 57 percent of all deaths in Latin
Advertising Age,
(September 22,
1~69)
:64.
--
76
.Americ~ of one-to-four-years-olds.l04
In her studies of
!changing dietary habits in Colombian villages, nutritionist Elizabeth Shipley found that the two products peasants
!want to buy as soon as they come into contact with the
:advertising message are white bread and soft drinks.
·Bread becomes a substitute for arepa, the traditional corn
pancake.
Soft drinks replace consumption of agua de
panela, the raw mash from sugar cane.
of the substitutes are slightly lower.
The nutrition value
But more important-·
ly, the impact of this shift in eating habits is that it
105
cuts deeper into the small food budget.
According to
Barnet and Muller, doctors working in rural Mexican
villages commonly report of families who sell the raw eggs
and chickens they raise to buy Coke for the father while
the children waste away for lack of protein. 106
The creation and satisfaction of wants among
the poor is only a by-product of advertising.
As has been
consistently noted, the target market is the wealthy, but
the deleterious effects of consumerism are not lessened
because advertisers are less insidious than insensible.
l04Alan Berg, The Nutrition Factor:
Its Role
in National Development, (Washington, D.C.: 1973)
:65.
105 Reference made to Elizabeth Shipley is from
personal interview with the author in August, 1976,
San Francisco.
· l06Richard Barnet and Ronald Muller, op. cit.,
:184.
77-
VI.
Results and Discussion
Testing of the Hypothesis.
! this
The hypothesis of
study was tested by construction of a model based
:upon the following relationshipsamong economic sources
of control and broadcast composition:
MNC sponsors and
U.S. programs, multinational_ advertising agencies and
i
U.S. programs. U. S. owned stations and U.S. programs,
U.S. owned stations and U.S. distributors, National stations and U.S. programs, and National stations and U.S.
distributors.
The analysis of economic and social ties between MNC sponsors and multinational agencies was conducted
as follows: 1) Accounts gained and lost by
multination~l
and domestic agencies in Latin America were surveyed: 2)
A review of trade journals was conducted for evidence of
multinational client-agency relationships.
The analysis of economic and social ties between MNC sponsors and U.S. programs was conducted as
i'ollows:
1) The relationship between program and sponsor
origlrrs in Colombian television was subject to temporal
measurement by viewing judges; 2) A review of Latin
American journals was made for evidence of the composi:tion
and objectives of sponsor lobbies.
The same method applred
to the study oi' relationship between multinational advertising agencies and U.S. programs.
'
'
78
The analysis of economic and social ties between
!
:U.S. owned stations and U.S. programs was conducted as
:follows:
Results of surveys on origins of programming
were compared with data on ownership compiled from trade
:journals.
The analysis of economic and social ties between
U.S. owned stations and U.S. distributors was conducted
as foll.ows:
l) a review of trade journals was conducted
for evidence of price policies adopted by U.S. distributors and 2)station owners were reviewed for evidence of
cross ownership.
The analysis of economic and social ties between
national stations and U.S. programs and between national
stations and U.S. distributors was conducted as follows:
Surveys on origins of programming were compared with
data on ownership compiled from trade journals.
!_I_ypothests.
The results of this study revealed
that the hypothesis was confirmed:
The composition of
programming and sponsorship does reflect and sustain the
economic and cultural links between multinational companies and national elites.
The origin and class of
programming in Latin America were related in varying degrees to: 1) The national origin of sponsorship investment: 2) The cost and convenience of programming: 3)
The national origin of station ownership: 4) The class
79
interest of station owners: and· 5) Expressions of preference by advertising agency and sponsor lobbies.
Findings of the study.
This study found that
'like other industries in a "dependent" Latin America,
:television is monopolistic, concentrated and distinguished
by a large scale foreign penetration (primarily by U.S.
firms).
Multinational companies are leaders in television
sponsorship and advertising agency and sponsor lobbies are
dominated by multinational companies in Venezuela.
Dis-
tribution of television programs throughout Latin
America is dominated by a few film companies (frequently
subsidiaries of conglomerate MNCs).
U.S. investment. is
highly concentrated in advertising agencies.
· were found to be billings leaders
U.S. agencies
in 9 out of the six-
teen countries surveyed and first or second in all 16.
In short, three of the four major institutions in the
commercial structure of Latin America television are dis-tingui~hed
panies.
by a high concentration of multinational com-
The influence of foreign investment was found
to be extended to the fourth institution, station ownership.
However, control of television stations in large
countries such as Mexico and Brazil was found to be in the
hands of domestic conglomerates.
Significantly, broadcast
composition in these countries indicated that national
owners and U.S. owners adopted similar criteria, (cost,
convenience, consumerism), in the selection of programs.
80
1n addition to reflecting dependency by economic
.i
penetration, commercial television in Latin America was
found, to be a mechanism for sustaining dependency.
Al-
·though capital.ismjconsumerism spread by television is
!difficult to isolate and quantify, the evidence available
·suggests that television programming and advertising has
a significant role in dependency.
It was found that con-
;sumerism generates a production-consumption cycle by and
for the wealthy by increasing demand in the
of
irrd~vidualistic
direction
(car vs. bus) luxury products.
Profits
acc-ruing from this demand consolidate multinational company
pen~tration
in Latin American industry.
At least
one case study (Lewis) has given rise to the speculation
tha-t c:onsumerism has generated complacency about economic
reform and emulation of the United States among the middle and upper elasses of Latin America.
This study could
not find sufficient evidence to buttress or undermine
this speculation.
Bowever, it was found that certain
consumer goods such as Coke and white bread, or even
radios and television sets, have become subjective necessi. ties among the poor.
This change in di~'tary habits and
consumption patterns,may according to this study, have
enla:rg_ed the problem of malnutrtion in Colombia and
Mexico ..
Tmplications of the study. The following impli-·. cations: may be dra'i.vn from the study: 1) Advertisers tend
OJ.
· to
fo~low
lines of nationality jn sponsoring programs in
at least one Latin American country; 2) Sponsor groups .
: composed of domestic firms and MNCs express program pre\ ferences and thwart government regulation in at least one
:Latin American country; 3) Advertising agency groups
composed. of domestic and U.S. firms support commercial
television against government regulation in at least one
, Latin American country; 4) Transnational links bind MNCs
and U.S. advertising agencies; 5) Domestic station owners
in Latin America tend to program according to cost and
convenience·and maintain programming composition similar
to U.S. station owners: 6) Domestic station owners tend
to be conglomerates in at least three Latin American
countries; 7) U.S. distributors undercut the cost of local
production in every country of Latin America.
Limitations of the study.
The major limitation
of this study \vas the lack of hard evidence for more than
one country on the processes of sponsor investment and
lobbies,. and more than three countries on domestic station
ownership.
The secrecy maintained by multinational cor-
pora.tions concerning their foreign investments limited
their annual reports to the most general references.
An
even more forwidable limitation was produced by the seciBcy
regardi.ng domestic ownership of stations in Latin America.
As mentioned earlier in the paper, an international directory of corporate interlocks and an 1nternational
: ..dil"Bctory; of. advertising __ agenc:i,es .an(.l
t.l:l~tr
.clil',':'nt$. 1NO:Ul.d
82
facilitate the study of economic and cultural penetration
in Latin America.
The major limitation of the study of sponsorship .investment in Colombia was judge reliability of observations.
This limitation extends to other areas where
research could have been better undertaken by the presence
of the investigator in Latin America.
Suggestions for further research. This study
attempted primarily to analyze why Latin American audiences
are viewing what they are viewing on the television.
Further research is needed to determine the effect of
this
mate~ial
on its audience: l) Studies of stereotypic
attitudes among both a foreign population exposed to
large amounts of Ameircan programming and a population
more naive in this regard; 2) Linguistic studies to determine the degree to which words and phrases pertaining
to exported American programs and commercial messages
are creeping into the local idiom; 3) A study to determine
if American
pra~;rams
and commercials effect a greater
consumption of American products abroad among viewers
than nob-viewers of similar socio-economic backgrounds;
4) A study to determine the degree to which subjective
nece3sities have taken hold among the poor and to compare
this data to media use; 5) A.comparison study of hours of
viewing, programs viewed, and attitudes toward reform
and development among the elite.
Another important area
83
for research suggested by this
~
1) An analysis of the
~tudy
is content analysis:
individual, the family, and the
·collective in American programs and national programs of
Latin America; 2) A study of the emphasis on material
tneeds in American programs.
Further study is needed in
·the area of station ownership in Latin America.
of ownership need be explored.
Patterns
An important study for
dependency analysis would be an investigation of areas
of collaboration and competition in the co-existence of
MNCs and national entrepreneurs in Latin America and to
analyze this relationship in the context of television.
84
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