UIH Eyes New Mate for Latino Channels

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Mexico City -- Two family- and home-focused channels in
Latin America -- Family Channel and Casa Club TV -- are looking for a new partner. News
Corp.'s International Family Entertainment Inc. unit is about to abandon the
channels, sending its partner, United International Holdings Inc., on a search for a new
investor in the channel's holding company, United Family Communications.

"UIH's strategy is to have a partner," UIH
Latin America president and CEO David Leonard said, indicating that a new one could be
announced within the next 10 days.

Last July, Family Channel was relaunched in Latin America
under the UFC banner, with Casa Club TV at its side. But with carriage space scarce across
the region, the network has had a tough job securing distribution and keeping it.

News Corp. officials were unavailable for comment. Leonard
explained: "I think it was a finance-driven decision, and it probably conflicted with
plans further down the road to launch Fox Family [Channel]."

IFE isn't the only News Corp. unit that's
apparently disenchanted with UFC: News Corp.-backed direct-to-home platform Sky Latin
America is dropping the two services. "On June 15, we are going to take [UFC] off.
What they gave was all library product with lots of repetition and without consistency in
image. It wasn't the channel that they promised. They didn't give any customer
service," said Ruben Mendiola, pay TV programming head at Sky Mexico, which claims
160,000 subscribers nationally.

The UFC channels are scheduled to launch on Sky's DTH
rival, Galaxy Latin America's DirecTv, said Gustavo Pupo-Mayo, UFC's president
and CEO.

Earlier this month, UFC talked of securing 1 million
subscribers in Mexico "in the next few months," through its agreement with
cable-operators' association Productora y Comercializadora de Television (PCTV).
However, an agreement with PCTV doesn't automatically give it distribution on all of
its members' systems, which are based outside of Mexico City. It is up to individual
PCTV members to decide what signals they carry.

Judging by the response from its members, the UFC channels
will probably not attract more than 400,000 PCTV subscribers by year's end, said
Eugenio Dubernard, PCTV's head of affiliate relations. "The problem is that they
want to insert both signals, which is a handicap. Operators are saying that they want one
signal, and not two. It's better to get a good response to one signal, rather than a
mediocre response with two," he said.

Even where it has distribution, UFC -- which has also seen
a senior sales executive and its publicist leave in the past year -- has not had smooth
sailing.

In Argentina, which has more than 5 million cable homes,
Family claims some 1 million subscribers. All told, UFC officials claim that their two
channels each have some 2 million subscribers throughout Latin America.

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