Digital TV's reign begins in Spain
Vocento buys into Videomedia, BocaBoca
The latest is media conglom Vocento, which recently bought 30% of vet TV production company Videomedia for E10 million ($11.8 million) and upped its stake in Cesar Benitez's production house BocaBoca from 30% to 70% for an undisclosed sum.
Both companies -- powerhouses that fill primetime slots on the major channels -- are housed under Vocento's holding company Veralia, which already owns 70% of leading light entertainment and telenovela firm Europroducciones.
Vocento is one of Spain's biggest multi-media groups with 13% in free-to-air broadcaster Telecinco, a majority stake in digital terrestrial Net TV, north of 40 local TV channels and newspaper interests.
Its push into TV production coincides with Spain's third phase of deregulation after the launch of commercial TV in 1990 and digital satellite in 1997.
On Nov. 30, 16 digital channels bowed (from pubcaster RTVE, Telecinco, Antena 3 and Sogecable) joining established DTT operators Veo TV and Net TV.
Vocento's asset charge also reflects an attempt to redress broadcaster/producer balance of power.
Producers don't retain the rights to their shows, but now that Vocento has all three primetime producers under its belt it could boycott a channel and negotiate to change that.
Other companies upping bargaining muscle include rights broker and producer Mediapro and top fiction factory Grupo Arbol, which look set to merge early next year.
Veralia wants to join this select club of content providers. "We're picking up production companies which complement one another, creating a large production operation through synergies and economies of scale," says Vocento CEO Jose Maria Bergareche.
Vocento is also cash flush. It makes a net profit of $165.3 million in 2004 and last spring it sold its 24% stake in Arbol for a reported $47 million. This is just as well, because, while there may be huge demand for content, tyro digital channels are unlikely to be able to pay top dollar.
The industry may have to wait a while to see any return for its production investment.
