Galavisión Seen Studying Digital Tier

5/10/1998 8:00 PM Eastern

New York -- Spanish-language cable network Galavisión is
studying the possibility of developing a digital-programming tier, people familiar with
the plans said.

The network, owned by broadcaster Univision Communications
Inc., wouldn't comment on the possibility of a Spanish-language tier. Sources said
the plans are still in the very early stages, with details about programming and a
potential rollout date still undetermined.

By expanding its service to include multiple digital
offerings, Galavisión would be able to further tap into the fast-growing Hispanic
demographic, which is largely served by just two broadcast networks -- Univision and
Telemundo Group Inc.

The possibility of a Galavisión digital tier follows
Liberty Media Group's unveiling last week of its own Spanish-language programming
lineup. The package, known as "Canales ñ," includes seven video channels and
eight audio channels, and it is set to launch next month.

A Galavisión digital tier would also come on the heels of
its own recent hot streak. Over the past year, Galavisión's distribution has grown
by about 15 percent, to 8.6 million households, about 2.6 million of which are Hispanic.
Galavisión expects to reach 3 million Hispanic households by year's end.

At the same time, the network is boosting its
original-programming lineup, and it recently added a home shopping block as part of a
joint venture between Univision and USA Networks Inc.'s Home Shopping Network.
Sources also said year-to-date advertising revenue for the network has far outpaced

While programming for the potential Galavisión digital
offering was still unclear, the network could tap a big library of resources. Its parent,
Univision, is part-owned by Latin American media powerhouses Grupo Televisa S.A. of Mexico
and Venevisión of Venezuela, both of which boast huge programming assets. Those assets
were widely seen as one of the major reasons why Univision has been able to grab more than
80 percent of the Hispanic broadcast market, while Telemundo's share has declined to
less than 20 percent.

On the pay TV side, Televisa boasts a handful of channels
ranging from music to news, while the Cisneros Group of Cos., Venevisión's parent,
is aiming to become a dominant pay TV player through its Miami-based Cisneros Television

Just as important, Galavisión's roots as a domestic
service would greatly help it to tailor digital services for U.S. Hispanics, whose
lifestyles and tastes can differ considerably from those in Latin America. The trend
toward a unique, domestic Latino market has accelerated, as many young and U.S.-born
Hispanics assimilate into Anglo culture.

To be sure, Liberty is bullish on Canales ñ, and it
expects to reach about one-third of all Hispanic cable households -- currently estimated
by some to total 4.5 million homes -- over the next three to five years, said David
Jensen, Liberty's vice president. Jensen added that Liberty will initially market
Canales ñ as an expanded-basic product for about $9 per month, and that it could add one
or two more video channels by the end of the summer.

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