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Univision wants its shows off the Web

June 08, 2009|Meg James

Although viewers are increasingly turning to the Internet to watch popular TV programs, fans of the blockbuster Spanish-language soap operas, including "Cuidado con el Angel" ("Don't Mess With the Angel"), are out of luck if they want to see the shows legally on the Web.

That could soon change. On Tuesday, a federal judge in Los Angeles is scheduled to hear evidence to decide whether Mexico's largest media company, Grupo Televisa, has the right to offer its enormously popular telenovelas to U.S. audiences via the Internet.

The trial is the latest legal skirmish between the media industry's Hatfields and McCoys, Televisa and Univision Communications Inc., which owns the dominant Spanish-language television networks in the U.S. The two companies have been feuding for years over the rights to Televisa's telenovelas, which depict stories of love, betrayal and power -- and fuel Univision's smash prime-time TV ratings.

Earlier this year the companies settled a long-running dispute that had been closely watched by Wall Street. Televisa had sought to break its 25-year deal to provide its shows exclusively to Univision's TV networks, a move that would have stripped Univision of its most popular programming and undercut its advertising revenue.

As part of the truce, Televisa agreed to maintain its relationship with Univision through 2017, when the programming deal ends. The February settlement, which came midway through a trial, was a relief to Univision and the banks that hold nearly $10 billion in Univision debt that was created when the company was taken private in 2007.

But for the last three years Televisa and Univision have put off the thorny issue over the Internet rights for Televisa's programs.

"The stakes are high for both sides," said Julio Rumbaut, a consultant who specializes in Spanish-language media. "Look at the proliferation of new media during the past few years. The demand for entertainment on the Internet has been growing by leaps and bounds, and that's only going to continue."

Televisa's programs have attracted a large following on the Internet. Pirated episodes of Televisa's telenovelas are among the most-viewed TV shows posted on YouTube, according to recent research by the online video analytics firm TubeMogul Inc.

Last week there were 57,200 videos on YouTube from shows that air on Univision, and those clips had attracted more than 613 million views, according to TubeMogul.

Many of the videos appeared to be pirated segments of episodes of the soap operas produced by Televisa -- and 72% of the clips were from "Cuidado con el Angel" alone. The series centers around a young runaway, given up at birth, who eventually meets the parents she never knew.

Univision has attempted to police unauthorized use of its shows because it doesn't want to lose its viewers or ad revenue to the Web, but the task is daunting.

"We regularly monitor and require YouTube to take down pirated program materials," a Univision spokeswoman said Friday. "That said, it is not surprising to see the explosive popularity of Univision programming on the Internet."

In Mexico, Televisa plays its soap operas on its own TV networks, typically several months before the shows air in the U.S. on the Univision network. Televisa also has been building a strong presence on the Internet in Mexico by streaming its shows online.

However, people in the U.S. who click on Televisa's site are automatically bounced to a version that does not provide episodes of the telenovelas. Televisa has agreed to limit its Internet offerings north of the border until the issues are sorted out in court in Los Angeles.

The trial begins Tuesday. U.S. District Judge Philip S. Gutierrez must decide whether the exclusivity that Televisa promised Univision when the two companies became partners in 1992 -- long before there was online video -- is broad enough to encompass the Internet. Gutierrez is expected to listen to testimony through Friday and to issue his ruling this summer.

"Televisa does not have the right to compete with Univision by broadcasting over the Internet in the United States programs it has licensed to Univision," Univision said last week in a statement.

The company maintains that Televisa's promise to provide its programs exclusively to Univision is the cornerstone of their pact.

But Televisa contends that the 1992 agreement was "limited to the broadcast of Televisa's programming by means of television in the United States and does not extend to other distribution platforms like the Internet."

Televisa also plans to point to a provision in the contract that permits TV signals that originate in Mexico to "spill over" into border towns of the U.S. Similarly, Televisa believes, that electronic transmissions from a website in Mexico should be permitted to filter into the U.S. -- an interpretation that Univision plans to challenge.

Advertisers would like the two companies to resolve their differences and make Spanish-language shows available legally on the Internet.

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