RCTV INTERNATIONAL EXECS OPTIMISTIC BUT NETWORK

C O N F I D E N T I A L CARACAS 000679

SIPDIS

HQSOUTHCOM ALSO FOR POLAD
DEPARTMENT PASS TO AID/OTI (RPORTER)

E.O. 12958: DECL: 05/16/2028
TAGS: PGOV PREL SCUL VE
SUBJECT: RCTV INTERNATIONAL EXECS OPTIMISTIC BUT NETWORK
STILL FACES UPHILL BATTLE

REF: CARACAS 00453

Classified By: ACTING POLITICAL COUNSELOR DANIEL LAWTON
FOR REASON 1.4 (D)


1. (C) Summary. Executives at Radio Caracas Television
International (RCTVI),previously RCTV, claim the company has
positioned itself as a viable cable network. However, they
also noted difficulties in attracting corporate sponsors,
partly due to fear of Bolivarian Republic of Venezuela (BRV)
retaliation. RCTVI's lawyer told us the network continues to
contest the legality of the BRV's decision to revoke its
free-to-air broadcasting license in May 2007, and is prepared
to take the case to the Inter-American judicial system.
Despite the station's efforts to resist government pressure
and to boost viewership, RCTVI is a diminished player in the
Venezuelan media with a 15 percent market share, down from
more than 40 percent when RCTV operated on public airwaves.
End Summary.

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RCTVI Increases Market Share
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2. (C) President of RCTVI Marcel Granier linked a spike in
subscriptions to cable television with RCTVI's move to cable
following the BRV's decision to revoke its broadcasting
license in May 2007. In a May 7 meeting with Poloff, IO, and
visiting Deskoff, Granier asserted that approximately 40
percent of homes currently subscribe to cable, a 21-point
increase since 2006. Granier and General Manager Daniel
Bergami said the substantial jump in subscriptions is proof
that Venezuelan viewers prefer RCTVI's news and entertainment
programming over the competition. According to Bergami, the
network now controls 15 percent of the overall market, up
from eight percent when RCTVI first aired on cable.

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Problems Remain
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3. (C) However, Granier also noted the network's inability to
secure a reliable stream of corporate sponsors. He told us
the BRV's public threats to expel RCTVI from cable television
in late 2007 dissuaded many companies from advertising with
it. Companies that initially expressed interest in working
with RCTVI have opted to do business with other networks
despite RCTVI's gains in the market, Granier said. In
particular, companies that have been awarded government
contracts are wary of advertising with RCTVI for fear that
the BRV will retract those deals.


4. (C) The head of the RCTVI's legal team, Oswaldo Quintana,
provided an update on the station's pending legal case.
Quintana explained how the Supreme Court (TSJ) has repeatedly
failed to hear their case on the legality of the government's
actions (reftel). According to the Inter-American Court, the
network must exhaust its legal options in Venezuela before
the case can be submitted to the regional body. Quintana
stated it has been difficult to meet that requirement because
the TSJ has thus far resorted to delay tactics, complicating
the network's ability to seek justice outside the country.
Despite these roadblocks, Quintana said his legal team is
prepared to submit the case to regional bodies when the time
comes. Separately, he told us that the condition of the
transmitters and antennas that were confiscated by the BRV
after the closure has deteriorated. He added that the
network has not yet been compensated for the technical
equipment.


5. (C) Comment: Granier and his team are optimistic about
RCTVI's ability to perform well in the competitive cable
television market and against free-to-air networks. While
it's conceivable that a portion of the increase in cable
subscriptions is directly related to RCTVI's move to cable,
its also plausible that greater disposable income and other
factors led to the increase as well. Market shares aside,
the network still faces an uphill battle against the BRV. It
appears the government has no interest in hearing the
network's case or returning the confiscated equipment.
Overall, the BRV's actions against the network have made it a
diminished player in the Venezuelan media. End comment.

DUDDY