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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 ' L.. ~··-u--··--·-··--•·--.,-- "'"·'"" -· '"""'"'·'-- ,,..,_._•---••·•---~--••• ••~•· ••-••••·•~"'"'-'""·•-• ••' ··-·••··"""" "·''"'' ".. <>"'., "'"" """"'"«·••" ......,.,; 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. !.,.,_...., _ _ ,,,...~r.~.<..,_._...._,..-.,_,_~,.....-__..~t<>.-·•"'"'.,.. •'~f··---....,-~---•><~----~---"""""'•,u·~">'--...•..,..,..,...... "'<._.,...,.~,- ...._ ~ ,...._..,.__ ,,. ,..,._ - ..-......,_v~---·-----,, .__.., . .-,. , ·~-~.,.,,,. .... ' ,_,~.-.~T;..,.~-...-..-~.. ---~1 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 I .•• ,....,,.,.,__. .,,...,.....-.,, ·~ vi ..q.OO>~~-·~-...,...,>---=•~--,,_.,., r..-..--...,....,...,._,~..- . • .......-.~ .... - ...... •-·~-·-•• ... ,..~~ •«•-..-.......-...~,,..,.,,,,,. ; y·.-· O<nc>~...,....,.,~,_,, .,,.,.-~·~~• ~~·~·,.-~,.. . .,._, -~ "'"' •.-. ••• --....~., ......,. .... ,.P.,~·~~.·.<.~···~ ~ . ,,_.,_.._.,~,,.,.,_.,,,.,..~,..~ 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. "~---._~..,._,,._.....,, ..., __ ~~ •·..-~-....... _,~._.,..~.,.,,, ,,,• ._.._,,..,.;< ___ .,....,~·~..- ''"'••~~•..>"•.._.__., ___ .,,_~- , •.,. ~·••'""-"""'"..,..·'"••-- ........ _...,.,.._..._. ......,._.,,...,_,,..,...,._,_.,.. _ , ·---~"_...., ' _ _ _.._._..__,. ..~-~•·•""-'~-<.-.o.-n-..------~J, 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 _,.,.,.,.__ ·--~· ... ...... ., ....... ~ ~·~-'"'·""•·: ........... """""".<-·-............. ~~-"''"......-~·-··n< ... ~.._. . . . . . . . . , . _.., __. . . . -~·---= ·-·~ ~ "'~ ~-------- ·- 1 - . ---.._., ___,___._. __.. . "'"'. . .,'"""'""". . '"'""" ,. . ,.,_._,__... . . _... . . . . . . . . . . . . ~ ' ?- ~ ....... ,.., 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. ~~''"""flo.~~·"''--'~"'~-"«--•<>'""''r _.,...,_ ~--,,......,,, ''''" """~'"-'"-"'"""'·....,_•....,__._..,.~ ,...._._,,......_~--. .. ,~,._,,~ _,.,., •• ,_,__.4......,.,_,..,"'<.'<> , ..,,,__. • -~-v•o·&>.'~ .,.,_..,»~<~.~.,.,...__,. _ _~,....,_- I -~--~.__.,,_""-'-"'-'·'""'""""._,'<c...-~ ,,......._"~~~-~~·•'-......_,_ _..._........_ __..,..,.. . ...._,.,.,.>£<.o-,} 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) .<- •'-"•'" ~· ',,--, ~• • ><•· ·-'" '-' ~· ~ _,._-,, -~····-'·"'•" ""~''''' :24 ,~ •. ».,·.~· ·-'-•• ~ ~ -~•1 ~·--~ .._'>L•--•·"•'• • .,_,~,. .. ~~~·"-• -- •·-~-<.• _,_,.,_..., ,,_,_~·-•· .,,.,...,,, -o "''· -"'"-'~~-_,-.-...!·•'<• _,,._, ··••· --~---~·~"-' ~>->-<•.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. ...,_..,_,.__...,.,.,...--=a,_.. _ ..""'~-------,.,._.,...,~---~·"""'"'-~-#~•><.""""-"~- ....~J<'P>>"'......_..,.,,"..-.._....... ;,~"·""""'""'"'~·~'<•X'"~~~·' >'>-~"'-'·'"-"'l'»"N ..... ,...,,,._~w.=->.--..-.~--<"""'~-~~ ' .~~>">'~'"''"~ 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. . / ••~·-~>o4'-~""""""~"'--'• "'k.-",....._'>.. A~._..,._-.._..--...,.,-._....,.._,.,..,.,_ ><_,...,..,,..._,._..,,... ~.._.,_........,.,..,...,.,._. ._...__.....,.._,..,..,. -~·.._......__..,..~._..,..._,,.,...,._~-·--~ •...,-....,_._,._.-._,_.., "~• __ ,.,._.,,,..__-.""_,............... --._,.:,~.To>.'--_.., ,,_,_., __ ._.~.._,~ ....._,~.._ 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 BIBLIOGRAPHY Books and Journal Articles Barnet, Richard and Muller, Ronald. Simon and Schuster, 1974. Global Reach, Beltran, Louis Ramiro. "Politican Nacionales de Comunicaciones en America Latina." Nueva Sociedad (September 1976) :11. Alan. The Nutrition Factor: Its Role in National Development. Washington, D.C.: The Bookings lnst i tute, 1973. 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