Televisa Shuts Eco Channel

After 13 years on the air, Televisa's international Spanish news channel, ECO, has officially called it quits, as anticipated (HR 4/18).

Blaming high production costs, losses in sales and advertising revenue, and the cooling down of the U.S. economy, a Televisa official said the time was ripe to turn off the switch.

The decision to cancel ECO is part of Televisa's $50 million cost-reduction strategy as the nation's top broadcaster has struggled to sustain its 24-hour cable news channel.

Leonardo Kourchenko, ECO vp of international information, said last week that Televisa would pull the plug on the channel April 30.

"It's been a difficult situation," he said, "but the decision was based on Televisa's (ongoing) financial restructuring."

Media analyst Whitney Johnson of New York-based Merrill Lynch applauded the decision.

"I think it will allow Televisa to trim costs without sacrificing future growth," she said.

Kourchenko said ECO was trying to survive in a market plagued by sluggish growth.

"The Spanish news market is expected to grow by about 5% to 8% annually," he said. "We decided we would need a growth projection of about 60% in order to continue on."

The Television and Radio Union said 224 ECO employees will lose their jobs and an additional 100 have agreed to resign voluntarily. Union official Patricio Flores said the U.S. economic slowdown has forced Televisa to cut back on production costs.

The Mexico City-based ECO, which reaches 80 countries and 15 million households, has an operating cost of $20 million a year. Last year, ECO took in $3.5 million in sales revenue.

Kourchenko said CNN en Español, ECO's main competitor, also took cost-reduction measures in December, reducing its annual budget by 30%.

"Spanish news channels simply have not been a good business," he said.

Earlier this month, Televisa closed two of its Mexico City production studios and decided to air reruns of locally produced programs as part of its multimillion-dollar cost-reduction strategy.