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Pay TV climbing out of crisis

Industry had good news to report annual ABTA confab

RIO DE JANEIRO — With new services, new channels and new locally produced programs in the pipeline, Brazil’s pay TV industry is beginning to emerge from the country’s economic crisis.

Pay TV was hit hard by the economic slowdown and currency depreciation that caused dollar-denominated costs to skyrocket and forced many hard-up subscribers to drop the service.

The industry had good news to report at its annual ABTA confab, which wrapped Oct. 9 in Sao Paulo.

Dominant satcaster Sky Brasil, now managed by Rupert Murdoch’s aggressive News Corp., has announced plans to be the first in Brazil to offer a personal video recorder service.

News Corp. bought into Sky Brasil in Sept. 2002 and is gradually picking up the shares of fellow partner Organizacoes Globo.

News Corp. executive VP Romulo Pontual promised more details next month, including a launch date and the price. He did disclose that the service would not allow subscribers to skip ads, Tivo’s controversial feature that is a major concern for networks.

In December, pay TV programmer Globosat (an Oganizacoes Globo subsid) will launch Sportv 2, a second signal of its popular sports net SporTV.

With exclusive rights to key Brazilian soccer leagues, SporTV is one of the most important pay TV nets. It is at the center of a legal battle between the Globo group and No. 2 satcaster DirecTV Brasil, which is seeking carriage rights to the net.

Initially, SporTV 2 will rebroadcast content from the main network. But eventually, it will feature its own original programming, focusing on local sporting events, says Globosat’s general director Alberto Pecegueiro.

Investments from U.S. pay TV programmers are helping to float the sector’s recovery.

Under tax regulations known as Condecine, foreign programmers can invest 3% of their remittances in local production, or pay an 11% tax on those remittances — virtually all the programmers have opted to funnel the monies into production.

The fund totaled $3.4 million by the end of August, of which half had been designated for local series, docus or other programming.

ABTA members elected a new president for a two-year term. As expected, Francisco Valim, CEO of cabler Net Servicos, will replace Leila Loria, general director of cable operator TVA, under a rotating system.

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