Telefe's Axel Kuschevatzky on How Netflix Has Impacted Latin American Market

The head of the film division at the Argentine TV powerhouse also discusses the complexity of the region's film market and competing with Hollywood blockbusters.

A writer, journalist and producer, Argentine film exec Axel Kuschevatzky has put together a career that has touched virtually every aspect of the entertainment business. He started out as a young film buff who created a magazine about genre cinema, then worked as the host of a Buenos Aires cable TV show, where he introduced obscure, cult movies; an established film reporter with Viacom-owned Argentine TV network Telefe; and a writer specializing in adapting American shows for local TV with tremendous success — most notably the local-language version of Married ... With Children, which became a massive hit in Argentina. He went on to become one of the most successful producers in Latin America as the head of the film production division of Telefe, then reached a career high point by serving as a producer on the 2009 foreign-language Oscar winner, Juan Jose Campanella’s drama The Secret in Their Eyes. As if that weren’t enough, Kuschevatzky, 46, has a unique side career: For 13 years, he’s been covering red carpets for TNT Latin America, a gig that has taken him to the Oscars, the Emmys, the Golden Globes and the SAG Awards. “In time, what happened is that I had films nominated on the same edition I was doing the red carpet show,” he tells The Hollywood Reporter. “So, I’m probably an anomaly in the system.”

Led by Kuschevatzky, Telefe has co-produced some of the most prominent Latin American films in recent years, including Argentina’s latest Oscar submission, El Angel, and the Venice competition entry The Accused, an Argentina-Mexico co-production starring LatAm pop star Lali Esposito. His slate at AFM includes Campanella’s The Weasels’ Tale, a remake of Yesterday’s Guys Used No Arsenic, a classic Argentine comedy from 1976. Kuschevatzky sat down to discuss his varied career, the complexity of the Latin American market and how Netflix has impacted the region.

You are already an established producer. Why do you keep covering the red carpet?

It’s really fun. I like the idea of communicating with people and telling them why watching films is still worth it, and the Oscars are a good place to do that. I like the adrenaline of that kind of broadcast, which in Latin America reaches 90 million homes. And I work with a team I really enjoy working with. One of the things I like the most is that it forces me to stay updated and watch all the films and all the shows. I watch everything.

What’s the state of the Latin American film industry?

There’s a great challenge on a conceptual level, which is to view Latin America as one single market in which several different markets coexist. Because on one hand, you have a common language — with the exception of Brazil — but also what happens is that the notion of “a regional film” doesn’t exist. There is no design for it. Yet it is also true that some projects get to cross over or have a regional drive, as has happened with Alfonso Cuaron’s Y Tu Mama Tambien, Juan Jose Campanella’s The Secret in Their Eyes or Damian Szifron’s Wild Tales. And there are a few stars that get to be relevant in different markets at the same time, like Eugenio Derbez, Ricardo Darin or Edgar Ramirez, just to name a few. The case of Instructions Not Included is very interesting: It earned the same in the U.S. as it did in Mexico [roughly $45 million].

How important is the Latin American market to Hollywood?

This market represents 8 percent of overall ticket sales. Granted, in the past 10 years, the driver of the international box office has been China, but if you look at growth, the international market grew by 11.3 percent between 2008 and 2016, and the domestic one (USA and Canada) did so by 1.7 percent. In home entertainment, Netflix is growing much more internationally than domestically. It’s a huge difference. In the 2018 second quarter, out of the 5.2 million new subscribers, 4.5 million were international, only 0.7 million were in North America. And that’s just Netflix. Hence, the international market expanded a lot more than the domestic one. With cinema, it was mostly driven by China, which grew by 500 percent, but if you leave that aside, you get that in Latin America, the market grew by 87 percent! And I’m not even considering the Spanish-speaking market, which is bigger and includes Spain and the U.S. The thing is, you have to be able to read this as several markets, not just one.

What do local producers have to do to stay competitive in local markets dominated by Hollywood blockbusters?

We look for the relevance of local products. You can’t compete with studio blockbusters in terms of budget, so you have to work with themes, ideas and ways to communicate that reverberate with the local audiences. And that is something you can do, precisely because it’s the answer to global products, which are not anchored in any country in particular, except maybe for the U.S. The key is [to create] the kind of content where studios [can’t compete]. Local comedies don’t have an equivalent, nor does content that references local context. That’s a huge difference, because that creates projects with a unique voice.

Which the studios then seek to distribute, right?

For most of these films, the studios act as distributors, not producers, so they have a low risk. Normally, these films also have a partner in the media industry, like a TV network. So the most expensive part of the film’s release is covered by one of the producers, and not the studio. When you do the math, let’s say in Argentina, and you grab three local box-office hits and add them up, you get the same result as with one Pixar film. So, studios get a large market share with a relatively low risk. So, yes, the studios go after these films. They haven’t just learned to coexist, they’ve become a tool.

Telefe has worked with many other big Latin American production companies. What do you see in common with them?

There are players we can very easily agree with, because we share that view of making a post-local film with international aspirations. We agree on things very quickly with companies like Argentina’s K&S [El Angel], Chile’s Fabula [Neruda, A Fantastic Woman] or Colombia’s Dynamo [a co-producer on Netflix’s Narcos]. There is a universe of coexistence among Spanish-speaking producers, both in the LatAm region and Spain. Also, you agree in a certain view because when you work with films that carry some risk, you try to minimize it. Each player tries to minimize it in its own territory. When you know you’re dealing with a complex film, it’s all about securing its presence in other countries.

LatAm companies like Fabula have recently opened offices in L.A. Do you see yourself working in Hollywood in the future?

I believe in a global product. We have a growing number of tools to get local products to circulate and not be so physically tied to a particular place. Today you can produce a film from miles away — that used to be unthinkable. It doesn’t mean it’s easy, but you can do it. And that makes my job more and more interesting. I’m interested in a local product with a global reach, which is very specific. I like using genre devices, and my heroes are scriptwriters, directors and producers who have worked with genre films in order to express a personal view.

What is your view on the impact of Netflix in the industry?

What we see are new opportunities opening up, new ways of reaching an audience. This multiplicity is a super interesting tool. Like everyone else, we’re looking closely at the evolution of consumption and the audiences’ relationship with content. But we are also seeing that content rules. It still rules. Content is what creates a drive within the audience. So, major players want to have the best content. And I believe we are perfectly capable of working within those lines.

This story first appeared in The Hollywood Reporter's Nov. 4 daily issue at the American Film Market.