Mexican Ad Dispute Continues Deadlocked
By JO DALLAS -- Multichannel News, 7/9/2000 8:00:00 PM
Mexico City-Mexico's largest wireless-cable operator, MVS Multivisión S.A., might not have carried out its threat to block the commercials of international networks, but the tiff between operators and programmers over the industry's advertising market continued through last week.
Meanwhile, a proposal from another major pay TV company here, Cablevisión S.A., failed to impress a panregional programming trade group.
Multivisión director general for Latin America Jorge Tatto confirmed that so far, the company had not blocked any commercials carried by foreign-owned networks, despite its threat to do so by the end of June.
"These kind of deadlines don't help us to negotiate a solution, which is what we are seeking," Tatto said, striking a conciliatory note.
The Mexican operators reasoned that ad blocking is in order for several reasons, including allegations that the content of some ads violated Mexican laws.
MSO Cablevisión claimed that this has been happening ever since Mexico's new pay TV regulations allowed the transmission of ads and programming into Mexico directly from abroad. Previously, all content had to be uplinked via a Mexican satellite.
However, many industry insiders argued that advertising revenue is at the heart of the operator-programmer tiff.
Operators are up in arms over a few issues. One is the government's recent decision that panregional networks are no longer required to transmit their programming into the country by a Mexican satellite. Operators are now missing out on some of the uplinking fees they once earned.
But by far the largest problem is what one operator described as the "prostitution of Mexico's advertising rates" by the pan-regional networks.
Operators argued that pan-regional programmers are selling panregional ads at lower costs than spots covering single, local markets. At the same time, operators complained that many panregional programmers are setting up or strengthening their local advertising-sales offices in Mexico and infringing on their market.
Cablevisión director general Pablo Vazquez bitterly spoke of one panregional programmer that ended up selling an advertising package with rates that averaged $9 per 60 seconds, whereas Cablevisión was not prepared to offer the same time for less than $350 per minute.
"The panregionals are undermining the value of Mexican advertising," Vazquez said.
Cablevisión holds the distinction of being the first, and only, Mexican operator that has carried out its ad-blocking threat to date. At the end of May, it briefly blocked all of the ads carried on foreign-owned networks, although it has been talking with programmers since.
Cablevisión's latest proposal would see it alone sell the six minutes of advertising time per hour allocated in Mexican pay TV and split the revenue with the networks. There is no word on what the percentage split would be.
Vazquez called it a win-win solution because the ad avails will be sold at higher prices than what the networks ask. What's more, "the panregionals won't have to pay the costs of running an advertising-sales team in Mexico," he added.
However, the Television Association of Programmers Latin America (TAP) trade group has not welcomed the proposal from Cablevisión, which is majority-owned by Mexican media giant Grupo Televisa S.A.
TAP president and chief operating officer Mary Pittelli said the idea smacked of "price-fixing."
"Cablevisión's rates are so high and out of whack with what is competitive. They claim we are undercutting them, but we see it as being competitive," she added.
TAP members, however, are talking individually with Cablevisión about its proposal.
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