Telemundo dreams of flyng south to Mexican market

Web opens news bureau, corporate offices in capital

MEXICO CITY — While Mexico’s TV titan Televisa dreams of expanding north of the border, NBC Universal’s U.S. Hispanic broadcaster Telemundo has taken its first big step into Mexico.

Late last month, Telemundo opened a news bureau and corporate offices in Mexico City. A studio will be running early next year and Telemundo prexy Don Browne aims to have a Mexican network shaking up a local market dominated by Televisa and Azteca within a couple years. “We are here for the long haul,” says Browne, who took over as prexy at the beginning of 2005 and has been restructuring the company. “There is no question that to be successful in the U.S., we have to have a strong commitment in Mexico.”

He is convinced Telemundo will gain a broadcast license in Mexico, despite past setbacks.

“Mexico is going global, and the global pressures here will eventually open up a competitive environment,” Browne says.

Telemundo parent NBC has long wanted to break into Mexico, where the $3 billion per year ad market outstrips the growing U.S. Hispanic market, valued at around $2.5 billion.

The company tried to buy into its erstwhile partner Azteca after the web was launched in 1993 to challenge Televisa’s monopoly of the Mexican broadcast market.

Then, last year, Telemundo tried to buy into the bankrupt Canal 40. But the Mexican government ordered a probe of GE Mexico’s involvement with the Mexico City-based web, saying the deal could have violated strict prohibitions on foreign investments in broadcast assets. With officials running regulatory interference, Azteca was able to stage its own takeover of the troubled Canal 40.

But now Browne sees a new opportunity. He is confident he will get a break from the incoming administration of Felipe Calderon, who takes office Dec. 1.

Key is Telemundo’s partnership with Grupo Xtra, owned by the Saba family, announced in April.  

“We have already started the formal process to solicit a broadcast license,” says Manuel Saba, chief exec of Grupo Xtra, which has holdings ranging from textiles to tourism. “Felipe Calderon has said he will evaluate the need for new TV stations in the first half of next year, and we will be there making our case.”

Browne says he expects there will be further obstacles and that it could take anywhere from one to three years to get a license, but the prospects look “better than ever.”

“We are going to be run by Mexicans here, we are going to create thousands of jobs. As the Mexican government agencies see we are bringing investment, I think they will look at us more favorably.”

Browne envisions a Mexican network gaining at least 15% of the market within five years of its launch.

Network has also been taking tighter control of content production since 2003, opening studios in Miami and Colombia. Browne appointed Hispanic market vets Patrico Willis and Marco Santana, who had different ideas about production from Argos’ Epigmenio Ibarra. A telenovela contract with Argos has been allowed to expire.

Telemundo had also been poaching Mexican talent until the courts intervened.

Backed by a Mexican court order, TV Azteca last month shut down Telemundo’s reality show “Quinceanera: Mama quiero ser artista” (Quinceanera: Mommy, I Want to Be an Artist),” whose host, Alan Tacher, is under exclusive contract with TV Azteca.

Telemundo now hopes to finish taping in Miami.

But Browne says the Telemundo won’t need to keep swiping talent because its increased Mexican productions will revitalize the market, allowing more independent production houses to open.

This could whet local appetite for Telemundo content, which is unavailable in Mexico.

“I think there are a lot of people in Mexico who think there should be more ability to see other content,” Browne says.

(Anna Marie de la Fuente in Los Angeles contributed to this report.)

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