TAP, Mexican Ops Meet on Proposed Ad Rules

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Mexico City -- A delegation from the Television Association
of Programmers Latin America (TAP) was in Mexico last week to discuss with cable operators
its opposition to government proposals to regulate cable-TV advertising.

Mary Pittelli, president and chief operating officer of
TAP, which groups pay TV programmers that are active in the region, said the Mexican
government's current proposals "would kill the [cable] advertising market"
for programmers in Mexico.

"What the Mexican government is doing, from the United
States' perspective, violates the spirit of [the North American Free Trade Agreement]
and what these trade partners are trying to accomplish in terms of telecom
expansion," Pittelli said.

The Mexican government has proposed that the cable industry
continue the practice of only allowing six minutes per hour of advertising time. What it
seeks to change, however, is how those minutes are divided between operators and
programmers.

Currently, the two sides have an informal agreement -- not
regulated by law -- that typically gives programmers four minutes of ad time per hour and
operators two minutes.

However, Mexico's government has suggested that by
law, operators should have the right to four minutes and programmers to two minutes -- a
move that would effectively reverse the current allocation of ad time.

TAP has opposed these proposals, saying that if adopted,
they would damage programmers' business interests.

"By limiting the number of commercial minutes a
programmer can sell, it severely restricts the ability of the panregional advertising
market to grow," TAP said recently in a prepared statement, adding that its members
currently rely on advertising for at least 50 percent of their revenue.

TAP would also like to see the total number of advertising
minutes on Mexican cable extended from the current six per hour to a level on a par with
other Latin American countries.

Typically, other markets in the region allow anywhere from
12 minutes to 15 minutes of advertising per hour on cable, similar to the broadcast
market.

Programmers represented by TAP aren't the only ones up
in arms over the Mexican government's proposals: According to industry sources, pay
TV programmers at Mexican media conglomerate Grupo Televisa S.A. are also concerned that
the adoption of these proposals could hurt advertising revenue.

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