Televisa executives testified on Thursday they kept the right to stream popular Spanish-language shows to U.S. audiences over the Internet in a licensing agreement with Univision, and said the arrangement would benefit its U.S. licensee’s ratings.
Televisa is battling in a federal court in Los Angeles this week for the right to transmit on the Web some of the same programs it has licensed to Univision for U.S. markets through 2017. Univision says the Program License Agreement (PLA) the two companies signed in 1992 gives it exclusive rights to distribute the programs, including popular telenovelas, in the territory where its stations operate.
Televisa Chief Executive Emilio Azcarraga Jean testified on Wednesday and Thursday that a contract clause that addresses “spillover” of broadcast signals to TV stations along the U.S.-Mexico border essentially allows satellite transmission of Internet service into the United States “because of the capacity that satellites have.”
The spillover provision, originally written in 1992, held Televisa harmless for any bleeding of its signal a few dozen miles into U.S. border markets.
“In the case of satellites, it’s different,” Azcarraga Jean testified. “Because of the capacity that satellites have — 500 miles, 1,000 miles (over the border) — that’s all right.”
“If you would think that a 500-mile spillover would be spillover (under the disputed contract provision) then I would agree with you,” Azcarraga said.
Azcarraga Jean, who stepped into the long-running dispute between his late father and former Univision Chairman and CEO Jerry Perenchio in 1997, also said he understood the contract permitted Televisa to transmit programs “in any electronic form from Mexico … (and) the Internet is electronic.”
“What I understand is … that we would give the rights to Univision for a royalty … to broadcast those programs over the air and on cable and we had the right to send those programs from Mexico on the satellite,” Azcarraga Jean said.
The two companies agreed in a 2001 contract amendment to call a “truce” in which neither would attempt to mount Internet streaming of the shows. The programs are available on Televisa’s Web site but are geographically blocked in the United States.
Televisa Executive Vice President Alfonso de Angoitia testified that the void created by having no Internet presence for the Televisa shows in the United States had fueled vigorous pirating, which appeared not to have hurt Univision.
“Those programs are being captured by pirate sites … so that hasn’t affected Univision,” de Angoitia said. “If you look at their ratings, they are at an all-time high.”
In fact, the availability of the shows, albeit illegally, had enhanced viewership by helping consumers not lose track of their favorite telenovelas, de Angoitia said.
“It’s a promotional tool,” he said. “We don’t believe it would destroy anyone. If we were to send our programming into the U.S. on the Internet it would promote and enhance TV viewership.”
The bench trial, held without a jury before U.S. District Judge Philip Gutierrez, is set to conclude on Friday but it is not clear whether he will rule immediately in the case.
The judge’s ruling is expected to deal only with whether Televisa has Internet rights in U.S. markets for its programs.
The case is Televisa S.A. and Grupo Televisa S.A. vs. Univision Communications, Case No. 05-3444, in U.S. District Court in Los Angeles.
