DirecTV Fights Back with Brazil Net Deal

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Sao Paulo, Brazil-DirecTV Inc., stepping up its battle for Latin American market share against direct-to-home rival Sky Latin America and Brazil's mighty Organizaçoes Globo, is getting into the programming business.

DirecTV Brasil and the country's No. 4 broadcast network, TV Bandeirantes, plan to launch a 24-hour, pay TV news channel called Band News next year, a TV Bandeirantes source said at the Telelink 2000 trade show here last week. The event brought together telecom and Internet companies, as well as pay TV equipment suppliers.

"DirecTV needs to have a news channel in Brazil, and Bandeirantes has a large news team, so we decided to work on this project together," the source said. Bandeirantes and DirecTV have not yet made an official announcement.

If all goes as planned, Band News will represent DirecTV Brasil's debut in the pay TV programming arena, where it has faced stiff competition from rival NetSat.

Backed by local-media giant Organizaçoes Globo, NetSat is the local arm of panregional DTH competitor Sky Latin America. Band News will compete against NetSat's Globo News, a spin-off of Globo's broadcast-news programming.

Much of DirecTV's recent strategy in its battle with Sky has focused on securing exclusive DTH rights to popular networks, such as movie channels from HBO Latin America Group. More recently, it inked an exclusive DTH deal to carry The Disney Channel in Brazil and the rest of Latin America.

DirecTV, controlled by Hughes Electronics Corp., launched in Brazil in 1996, but has gradually lost its lead in the region to News Corp.'s Sky.

Last June, Sky racked up 518,000 subscribers in Brazil to DirecTV Brasil's 395,400 customers, according to independent media-research firm Pay TV Survey. However, DirecTV officials said NetSat's figures included disconnected subscribers.

According to sources, Band News will provide short news updates every 15 minutes, produced by TV Bandeirantes' news teams in major Brazilian cities. It will also run stories from CNN International and Reuters plc, as well content produced in partnership with local business newspaperGazeta Mercantil. Last month, TV Bandeirantes andGazeta Mercantilsigned a cooperation agreement.

Past attempts to create pay TV news channels in Brazil have not always met with success, partly due to the high production costs. Three years ago, TVA, Brazil's second-largest MSO, shelved plans to launch a pay TV news channel in conjunction with Brazil's second largest broadcaster, Sistema Brasileiro de Televisao.

The pullout was due to cost considerations and TVA's decision to exit the programming business.

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