Mexico moving to a ‘must offer/must offer’ regime for TV operators

New legislation in Mexico will require television operators to take on board ‘must offer’ and ‘must carry’ obligations, which could have a positive economic impact for non-profit broadcasters whilst improving audiences’ access to quality programming.

Newspaper Reforma reported on Sunday that under the new law, free-to-air broadcasters would have to make their programming available for cable operators at no cost, whilst requiring the latter to do the same with the television signals of local terrestrial channels.

At present, millions of households across the country in rural and urban regions are unable to receive content from local and national non-profit terrestrial broadcasters, due to the fact that these operators frequently lack the resources to make their signals available across large geographic regions or areas where reception is poor.

With the changes to the regulatory framework, audiences with cable or satellite television would have access to the quality programming of national channels like Canal 22 and Once TV, which currently reach less than half of the 25 million households in the country.

At the same time, cable providers like Megacable, a metropolitan monopoly in the city of Guadalajara, will be expected to carry the entire programming of regional broadcasters like Canal 7 and 44, currently excluded from Megacable’s platform.

The ‘must carry’ provision, expected to be approved this week by Mexico’s legislators, is likely to have a positive economic impact in non-profit broadcasters, given that potential sponsors will be lured by the possibility of increased exposure in pay television outlets.

The regulation may also increase the programming choices of audiences nationwide, historically limited to receive poor quality content produced by Televisa and TV Azteca, a duopoly of television networks which together capture above 70% of total ad spending in the country.

At present, only 33% of Mexico’s 25 million households are subscribed to pay television services, but deeper market penetration for these services is expected for this decade, given short to mid-term prospects for vigorous economic growth in the country and Latin America as a whole.