Lost Deal Makes for New Gains in Argentina


A silver lining has emerged for some of the companies that
were impacted by the storm clouds over HBO Latin America's relationship with
Argentina's two dominant cable operators.

Galaxy Latin America's DirecTV direct-to-home platform
was only too happy to extend HBO an enticing offer for an exclusive DTH deal, according to
sources. And separately, HBO's rival, Cinecanal, is sweetening its agreement with the
two MSOs by creating a new basic channel.

One source privy to the negotiations commented, "An
exclusive agreement has been worked out in principle. It is now a question of working out
the details."

DirecTV's panregional rival, Sky Latin America, has
not yet launched in Argentina, although it carries HBO in Latin American markets where it
has a presence.

Sources said that while Sky hadn't contracted with HBO
for the Argentine market previously, it is now doing its best to one-up DirecTV with a
better offer. Sky officials declined to comment.

At the start of this year, HBO's movie channels --
various HBO Olé and Cinemax services -- were taken off CableVisión/TCI2 and
Multicanal, Argentina's two largest MSOs. Between them, they control about 3 million
of Argentina's 5 million cable subscribers.

According to one source, HBO chose to pull its service from
the two MSOs rather than accepting a substantial reduction in programming rates. Because
the demands by the two operators were almost identical, one critic contended that the move
appeared collusive. Executives at the MSOs were not available to comment at press time.

Seeking to take advantage of the HBO retreat on cable is
its rival, Latin American Pay TV Service (LAPTV), the entity that owns panregional movie
services Movie City and Cinecanal.

LAPTV is launching a new movie channel on basic in
Argentina to fill the void left by HBO. With premium tiers still a novelty in Argentina,
most programmers, including HBO, largely have distribution on basic.

"When HBO left, I went to Argentina and said to
[CableVisión and Multicanal], 'I can help you out. I can create a basic movie
channel for you within 90 days.' And I did," said Genaro Rionda, LAPTV's

Rionda added that the as-yet-unnamed movie channel will
launch by April 15, although he hopes to have the launch coincide with Cinecanal's
sixth anniversary, April 1.

Meanwhile, LAPTV is pushing the rollout of its
premium-movie channels, Movie City and Cinecanal 2.

Throughout this month, these services will be available to
all Multicanal and CableVisión subscribers free-of-charge from 10 p.m. to 2 a.m.,
"because we do not want to have problems with the censors," Rionda explained.
But beginning March 1, viewers must have decoder boxes installed and pay for these