Locals Challenge MTV Juggernaut

When pundits for Time, Newsweek and other publications trot out their occasional features about global cultural integration in the ’90s, they often opt for the metaphor: MTV. Nowhere is that metaphor more apt than in Latin America, where a single Spanish-language channel – MTV Latino – reaches 5.4 million homes across 23 countries, plus an

other 600,000 homes in the U.S. colossal brand power – following launches in the U.S. (1981), Europe (1987), Brazil (1990) and Japan (1992) – 2-year old MTV Latino has grown more quickly than any other pan-Latin pay channel. ESPN and GEMS claim as many subscribers, but ESPN’s LatAm signal is four years older and GEMS’ figure includes an overlap into 2 million non- Spanish-speaking U.S. homes.

MTV Latino has also made the biggest inroad into the jungle of Latin American advertising, where the attraction of a single pan-regional network has proved a harder sell than almost everyone had imagined. The web has signed million-dollar deals with Coca- Cola, IBM and Kodak, and claims a total of 40 advertisers.

Though the channel has yet to reach break-even (which was foreseen from the get-go as a three-to-five year prospect), MTV Latino execs say they are on track with all their targets. But while MTV Latino seems to be the paradigm of a successful channel, all is not hunky-dory at its Miami Beach, Fla., headquarters. Early this month, following months of speculation, MTV honchos replaced Latino boss Dick Arroyo with Tom Hunter – the third change of administration in the web’s short history.

Though one source commented that Arroyo was “ready to leave,” industry insiders often remark about MTV Latino’s high employee turnover. The channel is also frequently criticized for under-programming Spanish-lingo videos and for generally being “too gringo.”

MTV Latino also faces a challenging future. More international music nets are launching – at least four this year. And with pan-regional cable ratings possible next year, MTV Latino may prove to be less popular than the pundits assume.

Argentina already shows that MTV Latino is far from king. Domestic signal, Much- Music, has regularly outranked MTV over the past 18 months, something prexy Ralph Haiek attributes to his net’s local flavor.

In early October, another domestic web, Music 21, placed first among the three, according to IPSA-Nielsen. Similarly, Mexico offers several competitors , including Spanish-language nets TeleHit and Ritmo Son from TV giant Televisa, and the recent launch of MuchMusic’s North American signal.

Trouble looms

A bigger challenge now comes from Ya TV, backed by the mighty music divisions of Bertelsmann and Warner, and set to launch late this year. Both control impressive rosters of artists, which could spell trouble for MTV Latino if BMG and Warner execs decide to give Ya TV an exclusive window for their own artists.

“I think it would be foolish of us to do that,” says Rudi Gassner, CEO of BMG Entertainment Intl. “If we think artists are more suitable for MTV, then OK – it should depend on marketing needs.” But some industry insiders report a tension between . Warner’s TV and music execs because the former say they do want that window.

Even if exclusivity proves a non-issue, Ya TV is also playing the language card: unlike MTV Latino, a majority of its videos will be in Spanish. Similarly, the Televisa channels, newly-launched HTV, and Much- Music’s Argentine web all put Latino artists first.

Under Arroyo, MTV Latino redressed the balance somewhat. At startup, just 15% of videos were in Spanish, but now that figure has evolved to 25% to 30% – partly since more MTV-standard videos are now shot in Latin America.

Perfect balance

Arroyo maintains the ideal balance should be 50-50 in Argentina, and, due to greater U.S. influence, roughly 40% Spanish to 60% English in Mexico. Sales VP Damaris Valero confirms that the web is still working toward that kind of mix.

Early next year MTV Latino will cater to the Mexico/Argentine difference of tastes with a double feed: one for northern Latin America and one for the southern cone. This way, the web should also boost ad sales through more specific buys.

“We’re planning to become much more of a local channel in Argentina. We want to give less of an impression that we’re ‘from the U.S.,'” Valero adds.

MTV Latino would never admit that such changes owe to competition. Staffers often refer to the web as a “lifestyle channel” more than a run-of-the-mill music channel.

The network’s news division, high-risk sports shows, “Rock ‘n’ Goal” soccer events and roving beach parties all point to a definite sense of lifestyle. As Dick Arroyo put it shortly before his departure, “We’re getting out of the studio and into our territory.”

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