U.S. auds hear Claxson call

Music, doc channels lead the way

NEW YORK — Latin media conglom Claxson, which is struggling South of the Border, is quietly making inroads into the U.S.

Based in Miami Beach and Buenos Aires, Claxson has 10 Spanish-lingo satellite-delivered channels distributed in Latin America, and some are starting to migrate Stateside.

Among the Latino channels is an Hispanic version of the Playboy Channel, in partnership with Playboy Enterprises.

“I believe the different distribution platforms have now clearly realized it’s important to have a Hispanic tier,” says Claxson’s bilingual chairman and CEO Roberto Vivo, who is based in Buenos Aires.

“We’re trying to put together a bouquet of channels either controlled by us or channels owned by other companies looking to penetrate the U.S. market.”

Vivo says Claxson eventually plans to launch English-lingo versions of some Claxson channels in the States as well.

Two services in particular lead the charge into the U.S.: music-driven HTV Musica and the doc channel Infinito.

Both are making gains on two of the largest operators in the U.S. — and both have potential as English-lingo services.

Infinito and HTV recently launched across Time Warner Cable’s New York and New Jersey systems on a new DTV en Espanol digital tier. Those operations have a basic subscriber base of 1.4 million.

It is Infinito’s first landing in the States; HTV previously had 750,000 U.S. subscribers. Both channels have a Time Warner Cable greenlight to pursue system-by-system carriage deals.

But the New York foothold is particularly significant: The Espanol digital tier created there is a prototype for other Hispanic tiers that will eventually be launched by Time Warner across the country.

What’s more, HTV just landed a carriage agreement to be part of a new Hispanic digital tier on Comcast, which boasts 21 million subscribers. Infinito is among the finalists to be part of another, more costly Comcast Hispanic tier that will include an expanded selection of services.

Distributors of Spanish-lingo channels note that MSOs are becoming much more interested in catering to Hispanic audiences.

They’re increasingly conscious that Latinos now make up America’s largest ethnic minority — and that one of the reasons the cable industry is losing market share is that it hasn’t catered to the sector, unlike satcasters that are keen to pick up niche auds.

The U.S. gains and future opportunities couldn’t come at a more important time for Claxson.

It has been hard pressed to fine-tune its strategy almost from the time it was formed in September 2001 by three entities — the Argentine-based Internet company El Sitio, the Venezuelan Cisneros conglom and the Dallas-based investment firm Hicks, Muse, Tate & Furst.

While Claxson has grown subs to 50 million across Latin America, revenue from subscriber fees in 2002 were cut practically in half — from just over $60 million in 2001 to $32 million in fiscal 2002, which ended Dec. 31.

Declining revenue from advertising in Latin America contributed to a downward spiral that led to a nasty piece of coal in the company’s stocking last Christmas: a Nasdaq delisting.

Turning the ship around has involved staff cuts and restructuring $8 million in debt.

The way forward is far from assured.

One of the significant distribution platforms for Claxson channels in Latin America is the Cisneros-backed DirecTV Latin America, which is now in Chapter 11, struggling to renegotiate channel deals — a feat already accomplished with Claxson.

Having its headquarters in the Miami area may have been important to Claxson in the past because the city is a Latin American hub. But given the company’s current situation, it’s perhaps even more important as a major U.S. Hispanic market.

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