Slim buys his way into the content world
Juan Pablo Conti ©RapidTVNews | 19-10-2011 América Móvil, Latin America's largest mobile phone and pay-TV operator, has secured the acquisition of a company that will provide Mexican tycoon Carlos Slim's telecoms empire with the final piece of its entertainment jigsaw.
That company is DLA, and what it has that América Móvil lacks is a wealth of TV rights. The TV content aggregator, which is based in Miami but is focused on the Latin American market (as its original name, Digital Latin America, may suggest) is owned by Claxson Interactive Group, which in turn is controlled by Venezuela's powerful Grupo Cisneros.
While América Móvil and Claxson have already agreed the terms of the deal, the transaction still requires approval from regulatory authorities. Neither party has disclosed how much the Mexican-based company would be paying for its Florida-based target.
Through the years, DLA has established itself as one the region's prime premium content providers. So much so that, today, it's practically impossible to find a single large or medium Latin American pay-TV operator not relaying to its subscriber base some form of video on demand (VOD) service, pay per view (PPV) event or adult channel (such as Playboy TV) that has been aggregated by DLA.
In total, the company currently has distribution deals in place in 25 countries throughout Latin America and the Caribbean. Crucially, it has also pioneered the development of over-the-top (OTT) services in the region, building up a priceless experience that a new parent company coming from the telco, not the TV, world will certainly have considered before making an offer.
América Móvil – whose DTH, cable and IPTV subsidiaries already have over 11 million subscribers in the markets where they operate – was already one of the main clients of DLA, the business that it's now seeking to absorb.
But DLA also offers its VOD, PPV and premium content to most of América Móvil's direct competitors. This is likely to cause a dilemma for Slim: if DLA continues to distribute its aggregated content to rival pay-TV operators (as long as these actually accept such content now that it will come from América Móvil), Slim will have earned a new revenue stream with the acquisition.
If, however, Slim were somehow allowed to terminate these multiple content deals with rival pay-TV networks, América Móvil could see its regional position strengthened since it would be effectively keeping to itself one of its competitors' most valuable sources of content.
For the time being, América Móvil is confident that its acquisition of 100% of DLA will be approved before the end of this year.