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Televisa, EMI duet for record company

Deal will create joint-venture co. in Mexico

Nearly four years after Mexico’s Televisa sold its music business, the Spanish-language media conglom is getting back into the sector via EMI.

In a two-pronged deal announced Tuesday, Televisa and EMI are creating a joint-venture record company in Mexico, and Televisa will become a partner in EMI’s U.S. Latin operation beginning Sept. 1.

Televisa will be in direct competition Stateside with rival media giant Univision Communications’ music division at a time when relations between the two are icy.

Televisa sold label Fonovisa to Univision as part of a 2001 renegotiation of Televisa’s long-term accord to supply programming to the U.S. Spanish-language group.

Music was losing money amid rampant piracy. Televisa got approximately $235 million in Univision stock (it later paid Univision $16.5 million to settle a dispute over asset valuation) and signed a noncompetition accord.

Jumping back in

The clause expired in April and the market for Latin music, particularly in the U.S., is growing.

The Intl. Federation of Phonographic Industries values the whole Latin American music market at $903 million; the Recording Industry Assn. of America estimates the industry is worth $650 million in the U.S.

Both Televisa-EMI ventures will be headed by industry vet Rodolfo Lopez Negrete, former prexy of MBG U.S. Latin. He replaces EMI U.S. Latin prexy Jorge Pino.

Lopez Negrete will report to EMI Music Latin America prexy-CEO Marco Bissi and to Javier Prado, general director of Televisa Entertainment.

Soaping up

In Mexico, Televisa EMI Music will be a 50-50 joint venture, leveraging the musical talents of thesps featured on telenovelas like “Rebelde” and “Complices al rescate,” developing records based on other Televisa properties and producing compilation albums.

EMI Music Mexico will remain a separate operation.

The U.S. venture, EMI Televisa Music, will bring established artists to the roster, including Thalia and AB Quintanilla & Kumbia Kings.

Televisa isn’t putting up cash, but will provide TV ad time in Mexico and media support on both sides of the border.

The group has four national broadcast nets in Mexico plus several music feevees, a giant publishing division with operations in Mexico and in Miami, a popular Internet site and radio interests.

Its music pay TV channels — Telehit, Ritmoson and Bandamax — are distributed in the U.S. via TuTV, a joint venture with Univision.

Televisa sees possibilities for cross-promoting CDs and DVDs, and promise in selling music downloads via Web site EsMas.com.

Televisa is already selling its telenovelas on DVD in the U.S. with partner Xenon. The sudsers air on Univision a year or so after their Mexico launches, which gives Televisa talent an on-air presence in the U.S.

Stateside presence

Getting back into the U.S. Latin market is key for Televisa, said Ana Gabriela Ocejo, an analyst with Scotia Inverlat in Mexico City. “It will represent marginal costs for Televisa and probably good income.”

The upside potential is north of the border, music industry execs agreed.

“The U.S. market is changing and traditional means of marketing and promotion are being supplanted by new platforms,” said one executive. “I think we are going to see more development of U.S. Latin artists.”

Regional Mexican music is the top-selling subgenre of Latin music in the U.S.

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