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Wary pay TV toppers ride out crisis

But TBS, HBO face flak in Latin America

MIAMI — The Latin American pay TV market continues to recover from major economic crises in Argentina and Brazil, but programmers gathering in Buenos Aires this week for annual industry confab Jornadas still have fires to put out.

On Nov. 1 the Colombian pay TV cooperative TVPC unilaterally pulled Turner Broadcasting System’s signals, which include the top-rated Cartoon Network, after the collapse of talks to cut carriage fees. This will lose the TBS feevees 800,000 subscribers from a base of 1.3 million homes.

Meanwhile, in Argentina, the HBO Latin America Group is in a legal battle with No. 2 cabler Multicanal over carriage rights and piracy beefs. Argentina’s antitrust department has ordered HBO to restore the 10 networks it pulled from Multicanal, even though their contract has expired, a situation one exec likened to “legally authorized piracy.”

Other panregional programmers are eyeing these situations warily.

“The general feeling is the market is coming back,” says Sean Spencer, head of pay TV programmers’ organization TAP Latin America.

“We’re back where we were in 2001,” maintains Luis Bolio, senior VP of affiliate and marketing for TBS Latin America, responsible for Mexico, Central America/Caribbean, and the northern parts of South America.

While pursuing what he hopes will be a “sustainable solution in accordance with the economic reality of Colombia,” he anticipates the industry regionwide will see growth in 2005. “We’re not overly optimistic, but the worst is over.”

“We experienced modest recovery in 2004,” says Allan Navarette, director of affiliate sales for Discovery Networks Latin America, who also acknowledged that other programmers were likewise regaining lost ground.

Still, he sees above-average improvements in smaller markets in Central America and the Caribbean, and gains in key secondary markets like Venezuela, which had been battered by political and economic uncertainties and the accompanying currency problems.

Navarette is encouraged by consolidation among pay TV providers, which he and his counterparts believe will help those operators make investments like digital upgrades.

“Mexico is the most developed in terms of digital technology, and that’s exciting for us,” Bolio says. TBS is continuing to roll out its newest channel, Turner Classic Movies, which bowed Sept. 1, one of only two new panregional nets to bow in 2004.

MTV Networks Latin America’s senior VP of distribution Pierluigi Gazzolo is working on the expansion of its new net, VH1, while seeing gains for MTV Latin America and Nickelodeon.

A digital suite of U.S. channels, introduced in Mexico this year, will bow in Brazil this month.

“The challenge will always be economies,” Gazzolo says. “But the market feels better.”

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