Mexico open to new nets

Need for new national TV stations to be evaluated in 2007

MEXICO CITY — Competition has been slow to come to Mexico’s TV market, but the watershed may be near.

The rush is on in Mexico to build a third — and fourth and fifth — network to challenge Mexico’s titan Televisa and its smaller rival TV Azteca.

President-elect Felipe Calderon says his administration will evaluate the need for new national TV stations during the first half of 2007.

NBC Universal-owned Telemundo, partnered with Mexican conglomerate Grupo Xtra, is the biggest potential player waiting in the wings, but other domestic groups are also preparing bids.

Multimedios TV, owned by Monterrey businessman Francisco Gonzalez, and the wealthy Vazquez Rana family are the two biggest local groups aiming to take a piece of the $3 billion-plus TV ad market.

Multimedios TV already operates a local channel in the northern industrial city of Monterrey that reaches some 5 million homes in Mexico and Texas and whose locally flavored news and entertainment shows consistently route the Mexico City-focused nets in ratings.

Multimedios owns a cable company, the newspaper chain Milenio and recently sold theater chain MMCinemas to private equity firm Southern Cross and Morgan Stanley, giving it fresh cash to pursue expansion.

Earlier this year, the Vazquez Rana family’s hotel and hospital conglom Grupo Angeles bought Mexico City UHF station Canal 28. The family also owns radio chain Grupo Imagen and, another recent acquisition, the Mexico City daily Excelsior.

Also looking to expand is cabler MVS Communcaciones, which operates fast-growing feevee MasTV as well as channel MX52, seen in Mexico and the U.S.

The urge to create a broadcast network may seem behind the times, but the audience in Mexico remains large, if diminishing.

Less than a third of the national aud has access to pay TV, while for the rest of the nation’s lower and middle class, broadcast remains the only option.

Even among feevees, local content is king: Televisa’s flagship Canal 2 is the most watched channel.

With the financial backing of NBC Universal parent GE as well as the formidable Saba family fortune, Telemundo and Grupo Xtra have by far the deepest pockets to fund the investment needed to mount a national network.

Partnership is reportedly planning to pump up to $2 billion into their Mexican venture to get it off the ground.

But industry insiders say the entrenched power of Televisa and TV Azteca will make it difficult for new players to get a foothold.

“It may take years. There are a lot of powerful interests involved,” says TV critic Alvaro Cueva. “It is sad that in Mexico there are only two networks that, in the end, offer the exact same thing. Mexico is too big and diverse a country.”

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