Argentinas Big MSOs Scrutinize Program Lineups

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Buenos Aires, Argentina -- Pay TV channels in Argentina are
having to prove their value more than ever these days, as the country's two leading MSOs
-- Multicanal and CableVisión/TCI2 -- radically reassess and revamp their
programming lineups.

The two can afford to be choosy because the number of pay
TV channels available in Argentina -- estimated at around 160 -- far outstrips the
systems' capacities of about 65 channels apiece.

Multicanal and CableVisión have about 1.5 million
subscribers each. Together, they control more than one-half of the country's cable
subscribers, so losing carriage by either one or both of them means losing a big chunk of
distribution for programmers.

So far, Multicanal has decided to bring four new channels
onboard: panregionals E! Entertainment Television and Mundo Olé, and local networks Bravo
and Crónica TV.

To make room for them, it is dropping local Argentine movie
channel 365 Films and Brazilian channels Manchete and Globo, said Ricardo Green,
Multicanal's marketing chief.

The three channels are disappearing from Multicanal systems
serving Buenos Aires proper and the outlying metropolitan area, where Multicanal, as well
as the country's cable subscribers, are overwhelmingly concentrated.

Argentine news channel Red de Noticias will remain on
Multicanal in suburban Buenos Aires. However, it will not be transmitted in downtown
Buenos Aires because Multicanal plans to replace it there with what it said is a more
popular, urban-focused cable-news channel called Metro.

Green said the decision to drop or adopt these channels was
based on extensive subscriber surveys revealing viewing preferences, as well as on ratings
information.

Another important issue for Multicanal and CableVisión has
been what to do with the programming and systems assets of Video Cable Comunicación, the
Argentine MSO that they divided between themselves earlier this year.

From VCC's now-defunct programming unit, Gala Producciones,
Multicanal acquired Bravo and kids' channel Cablín. On the systems that it acquired from
VCC, Multicanal plans to introduce eight new channels: Nickelodeon, Antena 3, Magic Kids,
Galicia TV, The Box, CBS TeleNoticias, Canal Rural and Multicanal a su Servicio.

Discovery Kids, the kids' network owned by Discovery
Communications Inc. Latin America/Iberia, had been on VCC's systems, but Multicanal
decided to drop the channel when it acquired some of those systems.

However, according to Green, it is likely that Discovery
Kids will be brought back onboard "as soon as possible."At press time, Discovery
indicated that it was not leaving anything to chance. "To our knowledge, [Discovery
Kids] is still off the air, and we are continuing to negotiate to get it back," said
Henry Martinez, vice president of affiliate sales. Discovery has undertaken a grassroots
advertising campaign, encouraging subscribers to complain to their local cable companies
about the loss of Discovery Kids.

The main victims of the channel shakeout in Argentina
appear to be the former Gala channels.

Without the distribution outlet that they had through the
VCC systems, they were exposed to greater scrutiny by CableVisión and Multicanal, which
cherry-picked some of the channels. CableVisión took over former Gala channels El Canal
de la Mujer and Supercine, but it later decided not to include Supercine in its
programming lineup.

In the CableVisión camp, the channel revamp is going
full-steam ahead. "We are in the middle of a major restructuring process
nationwide," said Carlos Claiman, CableVisión's programming director. He is keeping
his cards close to his chest, saying that most channel changes will occur in March,
although some could come by December.

There have already been some notable alterations, such as
the decision to drop panregional entertainment network TeleUno. The rationale, Claiman
said, was to make room for Animal Planet, which is backed by Discovery and BBC Worldwide.

Like Multicanal, CableVisión is basing its channel choices
on a series of detailed subscriber surveys. Claiman said these surveys showed that
Argentine viewers demand quality and a constant renewal of programming. Sheer quantity --
long a competitive factor among the MSOs -- is not as important, he added.

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