Local outfits jump into Latin American TV: Fox, Hughes go after Spanish-language viewers.

Fox, Hughes go after Spanish-language viewers

The battle for Latin America's television markets got one degree hotter in early July, when Century City-based Twentieth Century Fox announced a new direct-to-home or DTH television joint venture with Brazilian multimedia giant Globo Organization. DTH systems use satellite technology to bring pay television to viewers with small satellite dishes in their homes.

The Fox-Globo partnership is the third U.S.-Latin American DTH joint venture to be announced in recent months. A similar announcement came in March, when Hughes Communications Inc., a unit of Los Angeles-based Hughes Electronics Corp., launched its DTH joint venture, Galaxy Latin America, with three Latin American partners. And about a year ago, Greenwich, Conn.-based PanAmSat Corp. announced a DTH joint venture called Galavision with Mexican media conglomerate Grupo Televisa SA.

All three ventures plan to launch their respective DTH services in the beginning of 1996. Each service is designed to offer subscribers from tens to more than 100 channels for viewing.

Sources said the DTH start-ups are part of an ongoing race among U.S.-based media and high-tech companies to grab market share in Latin America's emerging pay-television market.

"Right now, everyone is in an investment-spending mode," said Marcelino Miyares, president of Canoga Park-based Tamayo Miyares Advertising Inc., an advertising firm that focuses on media for Spanish-speaking markets. Miyares explained that 50 million Latin American homes are currently wired for cable television, but the market for pay television has a much greater potential.

"The long-term payout (for cable and DTH carriers) is a hemispheric audience of 480 million in Latin America and another 25 million Hispanics in the U.S.," he said.

Made in America

U.S. firms may be rushing to set up high-tech DTH ventures in Latin America, but a number of U.S. cable stations have already established Spanish- and Portuguese-language channels that are currently carded by Latin American-based cable operators.

Some U.S. cable networks with Latin American channels include Fox, HBO, the USA Network, the Discovery Channel, MTV, CNN, TNT and the Cartoon Network. Despite their Latin presence, however, many of these U.S.-based networks still rely heavily on U.S.-made programming dubbed into Spanish or Portuguese for their Latin American operations.

Kim Hatamiya, general manager of the Fox Latin American Channel, said much of the programming for her channel, also known as Canal Fox, is dubbed material from Fox's English-language film and television libraries.

"Generally speaking, most of our programming is from the U.S., because it's expensive to make original programming (for the Latin American market)," said Hatamiya. She added that Fox's Latin American channel was launched two years ago and currently has some 4 million subscribers.

The three DTH joint ventures have yet to announce their programming line-ups, but all have hinted they will draw on their Latin American connections to offer more programs tailored to local audiences.

High priced

As a case in point, Joseph Del Riego, vice president of Hughes Communications, said Galaxy Latin America will obtain about one-third of its DTH programming from local sources.

As with any cutting-edge technology, new hook-ups for Latin American DTH customers will not come cheap. Aside from the usual start-up fees, DTH customers will also have to buy individual satellite dishes for their homes.

Del Riego said dishes for Galaxy Latin America customers will initially cost about $700 each. PanAmSat spokesperson Kevin Burgoyne said Galavision satellite dishes will cost between $500 and $700.

Both Burgoyne and Del Riego asserted that prices for satellite dishes will likely come down as service becomes more widespread; but even after reductions, the final $300-to-$500 price tags they predicted are still very expensive for most Latin American households.

To address the affordability problem, Galaxy Latin America is considering various financing options for its future DTH customers, Del Riego said.

Pricing issues aside, the volatility of local economies is another problem facing U.S. companies entering Latin American pay television markets.

The volatility factor became all-too-apparent early this year, when the Mexican peso plummeted against the U.S. dollar, triggering economic problems throughout Latin America.

But despite the setback, Fox remains committed to the Latin American market, Hatamiya said.