Latin TV industry meets in Buenos Aires: ATVC CAPER conference and exhibition gets Latins going.

ATVC/CAPER Conference and Exhibition gets Latins going

It has been a hard year for the Argentinean television industry. Nevertheless, the November 19-22, 1995 conference and exhibition to be held in Buenos Aires-sponsored jointly by the Cable Television Operators' Association (ATVC) and CAPER, the equipment importers' trade association - is expected to be another success.

The event attracted nearly 200 exhibitors and 16,000 visitors last year; this year bookings could be lower but still sufficient to fill up the floor space. Last year the floor space was extended by adding a tent, which became rather unpleasant because of the high temperature and lack of air conditioning. The conference alone, which included an award ceremony for made-for-cable programming, was attended by 700 participants.

The ATVC/CAPER show is the biggest Latin American trade exhibition. There is a reason for this: Argentina has accounted for roughly 40 per cent of pay-TV subscribers in Latin America. With revenues in excess of $1.4 billion a year, the industry has attracted many satellite-delivered channels from the U.S., all fighting to get a share of the 20 per cent of revenues usually earmarked for programming by cable operators. But local channels have also mushroomed, pre-empting the most relevant formats (news, sports and movies) and forcing the international channels to lower prices and maintain a high profile.

Now other stars are rising: Brazil and Chile are expected to double their existing TV subscriber base this year. Brazil, fueled by massive investments by Rede Globo and TVA (a subsidiary of Editora Abril), is expected to expand its base to one million subscribers at the end of 1995, while Chile aims to reach 500,000 households. By comparison, Argentina is expected to grow by 10 per cent, exceeding 5 million households. Mexico, which holds its CANITEC show every September, has temporarily lost some of its luster because of the Mexican peso meltdown.

Both Brazil and Chile have developed their own TV trade shows and conferences, but with a difference: while Argentina boasts more than 1,600 cable systems, Brazil has 103 licenses and Chile has 67. So the number of buyers is small and a large exhibition is unnecessary. Even Brazilian manufacturers are exhibiting in Buenos Aires, willing to enter the Argentinean market, while cable and MMDS operators from several neighboring countries visit the show to learn about the latest technical and programming news. The Mercosur free trade zone, which encompasses Brazil, Argentina, Uruguay and Paraguay, is also helping.

Broadcasters are not absent from the show: CAPER offers the hardware needed by the radio and TV stations. Argentina has only 43 stand-alone TV broadcasters, five of them superstations, and 95 privately-owned radio stations, a pittance compared with the pay-TV market.

There are also some 3,000 "pirate" FM radio stations in the country, but their purchasing power is minimal.

DTH 

This year another trend is expected to emerge: the launching of the new PAS-3R, two Intelsat craft and a Galaxy bird will open the markets to DTH (direct-to-home satellite). Service will most likely start in early 1996 by several groups: Galaxy Latin America, a joint venture by Hughes Communications from the U.S.; Multivision from Mexico; TVA from Brazil; and Organizacion Diego Cisneros from Venezuela. There is also Galavision, a joint venture between Mexican Televisa and PanAMSat, of which the corporation headed by Emilio Azcarraga owns 50 per cent. And the latest entry is a partnership between Rupert Murdoch's News Corp. and Brazilian powerhouse Rede Globo, which already has its own DTH operation in Brazil with roughly 80,000 subscribers. A fourth competitor is SUR, established in Miami and linked to Peruvian broadcaster Panamericana de Television.

The Latin American DTH market is expected to grow to five million households by the end of the decade. However the feeling is that no more than two competitors will be able to profit from the increase. This means that there will be some degree of consolidation; some experts point to the story of British Sky Broadcasting as an example that should be taken into account.

The cost of entry is exorbitant: Alberto Gonzalez of Argentinean programming supplier Imagen Satelital estimates that an investment of $20 million in about four months is needed to play the game.

Pay and Premium Channels

The Argentine TV market has other peculiar patterns that must be sorted out. Most of the 1,600 existing systems offer only a basic package, which sometimes includes premium channels like HBO-Ole and Cine Canal at fiat prices ranging from $28 to $35. Pay channels have been introduced in a few cities, and recently there has been a massive move toward a scrambled channel featuring a soccer game on Sunday afternoon. HBO (Time Warner, Sony) and Cine Canal (Universal, Paramount, Fox and MGM) and their Latin partners have been unhappy about the basic package, but until now there has been little they could do about it.

DTH is expected to help change the situation, with premium channels and pay-per-view movies that will probably force cable systems to upgrade their networks and offer these attractions.

The four major local MSOs are considering making changes, but experts believe that it will not be easy to pull premium channels from the basic package and charge extra money for them. The satellite-delivered systems have a fresh start, but they will face the same hurdle in places where cable is available.

Cable operators agree that the current situation, with basic packages of up to 65 channels, is no longer sustainable. But, since over-building is also extended, a client could easily switch from one supplier to another if he finds a clear advantage to doing so. On the other hand, the relationship between the major MSOs is competitive enough to prevent a coordinated switch to a new marketing strategy.

Going North

The exhibition will also be home to the renewed efforts of Latin American programming suppliers to sell cable channels to systems outside their country. The major roadblock is the issue of copyrights: the most attractive products are movies from Hollywood or Europe, but until now it has been very expensive to buy rights for Latin America as a whole. However, Imagen Satelital was able to purchase rights for the Southern Cone and has chosen to extend its reach by means of a documentary channel called Infinito, which aims to compete with Discovery. Cablevision, which recently spun off its programming division, has a news channel. A tango music signal and other specialty formats are available from other Argentinean outlets.

Chile has two broadcasters, Television Nacional and Universidad Catolica, which are uplinked cable-oriented channels. Peru has SUR, a channel that is already available in the U.S. and features news and entertainment from 12 Latin American broadcasters.

Televisa of Mexico has been delivering four channels for some time but faces the same problem: no major studio will let its movies be shown by third parties across the Continent. So its contents are limited to news, telenovelas, broadcast shows and music video dips.

New Channels

Digital compression, applied to satellite transmissions, has not only eased the dearth of bandwidth limitations but enhanced the choice of fare. HBO-Ole, which also has Cinemax, will start offering its Warner Bros. Television and Sony Entertainment channels, as well as a new music channel that will compete against MTV Latino.

Several other newcomers, like Country Music Television and the Travel Channel, will be spotlighted at the ATVC/CAPER market. The transponder carrying Gems Television - aimed at women - will add the EWTN channel. The Box, a music channel not delivered via satellite, will give a taste of interactivity to viewers, who will have to pay in order to watch their favorite videos. Prime Deportiva will compete with the well-established ESPN - which has a regional feed for the Southern Cone - and TyC Sports, a local channel that holds the coveted rights to the most attractive soccer games.

In an industry where change is constant, exhibitions like the ATVC/CAPER Buenos Aires convention offer a good opportunity to see what has happened during the past few months. It doesn't compete directly with worldwide gatherings like NATPE, NAB or MIP-TV, but for the Latin American crowd it offers a great chance to get in touch with the latest developments.