Prisa banks on local heroes

Radio, TV to be focus of Spain group

MADRID — Forget Euro mergers and global acquisitions. Spain’s TV big boys are setting their sights on more modest goals.

In early March Juan Luis Cebrian, CEO of the Prisa Group, Spain’s second biggest media company, reviewed full-year earnings and marked out more achievable strategic priorities for 2002.

Prisa has surfed Spain’s waves of recession with a pretty strait board: net profits for 2001 were just 17% down to 76.7 million euros ($67 million) off revenues up 8% to $1 billion.

Beyond growing Latin American radio ops, Prisa will focus this year on local TV, says Cebrian.

“There’s a general trend in broadcasting to attract advertisers by functioning on a local level rather than just dub U.S. programming,” says David Gladstone, a high-yield analyst at Morgan Stanley.

But Prisa thinks really local.

Grouped under Localia TV, its 63 stations in Spain target single cities, even small towns.

In Spain, such a micro approach is inevitable. Spain measures 620 miles from west coast to east. The Catalans around Barcelona and Basques in the north think of themselves as separate nations.

No country in Western Europe has experienced more political devolution over the last 25 years. Within living memory, most Spaniards worked on the land. Strong, sometimes arcane local sentiments still flare at village fiestas.

Since the ’80s Prisa has built its radio biz, led by Cadena Ser into a nationwide web of local operations.

“To capture advertising, local TV offers great synergies with radio. Prisa already has the know-how, the local contacts in place,” says Jose Saiz, a market research analyst at Morgan Stanley.

“Spain’s ad market is evolving toward cross-media sales. But local markets are still relatively unexploited,” argues Miguel Gil, Prisa head of staff.

Localia has created a market for productions at the Prisa-run pay TV operator Sogecable. It is also creating new distribution windows.

Per Rafael Garcia Mediano, CEO of Localia owner and Prisa subsid Pretesa, Localia has inked local TV product deals with Sogecable, Warner Bros., Disney, Discovery and the BBC.

Other Spanish media giants are now entering local TV.

The Correo Group owns 23 stations. Last April, ChumCity Intl., the overseas arm of the Toronto-based broadcaster, teamed with Spanish publisher Godo to launch Citytv in Barcelona.

Reaching some 30% of Spaniards, Localia still has much room for growth. 2001 revenues stood at $6.7 million. Per Garcia Mediano, it takes two years of investment for a local TV to turn a profit.

There are some 1,200 local TV stations in Spain, though perhaps half the country may prove too sparsely populated for even the most local of nets.

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