Chile becomes hot spot for int’l TV investment

SANTIAGO — Even though Chile is a relatively small market, it has become one of the prime targets for international investors who see it as one of the best Latin low-risk growth areas.

In the TV sector, the big news has been the growth of cable along with foreign coin flowing into local TV webs.

The first cable operation in Chile started in May 1987, originally called Mundo Cable and renamed Metropolis about a year ago. System, largely owned by Argentine interests, currently reaches 35,000 homes in Santiago, offering 24 channels.

Its major competitor is Intercom, owned by the powerful Mercurio publishing group, with 18,000 subscribers and about 24 channels, including recent additions such as the Discovery Channel, MTV Latino and Gems.

A third cable system, called Cable Hogar, just started up and hopes to reach 10,000 subscribers sometime this year. There’s also an over-the-air feevee company, Naxivision, owned by the Luksic group, which has about 5,000 subscribers in Santiago offering eight channels.

Systems are charging about $ 20-$ 25 a month to homeowners, though in some cases the price is a lot lower.

Thus far, Chilean cable has been limited mostly to the capital, Santiago. But 109 licenses have been granted by the government, and sites range from the northernmost town of Arica to Arctic city of Punta Arenas.

An estimated 20 systems are already operational around the country, with another 60 or so expected to go on line this year.

Thanks to the start-up of cable and the entry of new over-the-air private channels during the last four years, program sales have been booming.

“We expect to double our sales this year, largely thanks to the growth of cable in Latin America. Chile is about 10% of sales,” commented Osvaldo Barzelatto, the country’s largest broker, who reps MGM-TV, CBC, Yorkshire and Chile’s Television Nacional for all of Latin America,

Chilean TV has recently been the target of various foreign-interest groups. Mexico’s Grupo Televisa last year bought a 49% interest in private web Megavision, which has about 15% share of the market. Venezuela’s powerful Cisneros Group, which owns Venevision, and seems to be in an acquisitions race with Televisa, bought 49% of the University of Chile web (Channel 11).

At press time the ailing La Red was dickering with a major Canadian group for the sale of half of its equity.

Said La Red’s general manager, Eduardo Tironi, “Five channels are just too many stations in a small country like this and the competition is fierce for the $ 150 million Chilean market. We have a 7% share.”

Controlling about 80% of the ad pie are government-owned Television Nacional (Channel 7) which bags about 50% of the market, and the Catholic University station, Channel 13, with a 30% share.

Said Channel 13 general manager Alfredo Abba, “We’re producing about half of our programming, which includes two novelas per year. New studios are being built and we’ll have 11 soundstages by the end of this year. Business is very good indeed.”

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