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Proliferating Nets Chase Big Market

Mar 29, 2004  •  Post A Comment

Spanish-language television in the United States today looks a lot like the English-language TV landscape in the 1980s, a time when over-the-air broadcasters still dominated television viewing while cable programmers launched new niche services at a dizzying pace.
In the 2004 Spanish-language TV market, Univision, its sibling TeleFutura, NBC’s Telemundo and Mexico’s TV Azteca account for nearly all the viewing. However, a steady stream of new networks is joining the competition. Several companies have already launched services or announced plans to do so this year.
ABC/Disney unveiled ESPN Deportes, a 24-hour sports channel, in January. The History Channel plans to launch a Spanish-language channel in May. Since 2000, more than a dozen Hispanic-focused networks have appeared. What was once a trickle of Spanish-language TV has turned into a flood.
The research firm Global Insight projects that the Hispanic population in the United States, estimated at 35.6 million in 2002, will swell to 63 million by 2020. Disposable income of Hispanic consumers will quadruple over the next two decades to $2.5 trillion, the firm’s research indicates.
Moreover, it’s a young market, the kind advertisers covet. At about 26 years, the median age of Hispanic consumers is roughly six years younger than that of the general market. Hispanic households tend to be larger, with more children, making them prime consumers of everything from clothing to diapers to electronic equipment.
What’s Being Watched
For now, the bulk of television viewing in Hispanic households still goes to the general-interest, broadcast-delivered networks. The most widely viewed programs during prime-time hours remain the telenovelas, serialized melodramas that long have been staples of Latin American TV.
“They are the bread and butter of Spanish-language television in this country,” said Magaly Morales, who covers Latin TV for the South Florida Sun-Sentinel in Fort Lauderdale, Fla. “Whenever programmers have tried to experiment with other types of shows, they have generally not been as successful.”
Indeed, of the 20 top-rated programs in Nielsen’s Hispanic sample, not one is an English-language show. Univision, available in the United States since 1976, still claims the lion’s share of the Spanish-speaking audience, including every one of the top 20 programs among Hispanic households. Univision buys most of its programming via long-term agreements with overseas producers such as Mexico’s Grupo Televisa, and Venevision, a Venezuelan producer.
“We have guaranteed access to the highest-rated programming available in the Spanish language. We are able to pick and choose among this vast amount of programming after it’s aired in Latin America and after we have seen how successful it is,” said Andrew Hobson, an executive VP at Univision, addressing the Citigroup Smith Barney Entertainment Media and Telecommunications Conference in New York in January.
Unlike American daytime dramas with never-ending story lines, telenovelas come and go, seldom lasting more than 80 to 100 episodes. Current Univision hits include “Amar Otra Vez (To Love Again)” at 7 p.m. weeknights, and “Bajo la Misma Piel (Under the Same Skin)” at 9 p.m. weeknights, both Televisa productions. The network’s top-rated 8 p.m. program, “Velo de Novia (Bride’s Veil),” ended in early March and was replaced by Televisa-produced “Mariana de la Noche (Mariana of the Night).”
While Univision remains the 800-pound gorilla, upstart Telemundo is coming on strong. The network has shown considerable ratings improvement over the past year, with some time periods showing growth approaching 200 percent. In aggregate, however, Telemundo programs tend to deliver far smaller audiences than those of Univision.
Telemundo is basing its hope for the future on original production, a strategic decision network executives believe will pay off in the long run by enabling them to hone stories and topics specifically for American Hispanic viewers.
“The main difference between us and Univision is that we make our programs to order, so it’s like home cooking as opposed to a canned product,” said Ramon Escobar, Telemundo’s executive VP of programming.
The network’s emphasis on originality sometimes allows it to be more topical. When President Bush addressed the nation on immigration issues a few months ago, producers wove the speech into the story line of Telemundo’s 9 p.m. telenovela, “El Alma Herida (Wounded Soul).”
Telemundo’s prime-time lineup includes telenovela “Pasi ‘n de Gavilanes (Passion of Hawks)” at 7 p.m., followed by “Amor Descarado (Shameless Love)” and “El Alma Herida.”
Telemundo is pulling out all the stops in the fight against its larger rival. The network recently won a court fight to hire Mexican heartthrob Mauricio Islas, who had been under contract to Univision’s programming partner, Televisa. Part of Telemundo’s lure for Latin actors is the possibility of winding up with some face time on parent company NBC.
“We have had about 22 castings for NBC shows with Telemundo talent, and I think you’ll see us working more and more together,” Mr. Escobar said.
Mr. Escobar holds high hopes for Telemundo’s direction, but Univision’s Mr. Hobson said original production is a risky business model.
New Broadcast Nets
Univision launched a second network, TeleFutura, in early 2002, partly as a defensive move to protect its mother network’s 18 to 34 and 18 to 49 flanks, which it feared were vulnerable to the sudden onslaught of competition. TeleFutura counterprograms Univision, offering a collection of sports and movies during prime-time hours when other networks are carrying telenovelas.
“TeleFutura is now the No. 2 network in many dayparts, including from 7 a.m. to 1 p.m. and all day on weekends,” Mr. Hobson said.
TV Azteca, Mexico’s second-largest broadcaster (after Televisa), is making some inroads into the U.S. market as well. In January the company added two affiliated stations in Texas-KYDF-TV in Corpus Christi and KODF-TV in Dallas-for its Azteca America network. The additions give the network a presence in 33 markets.
Azteca America still ranks a distant fourth among Spanish-language broadcasters in the United States. In early March Nielsen included the service as a “limited coverage network” in its Hispanic household sample. Azteca America is available to about 49 percent of Hispanic households.
Under Ratings Radar
Nielsen tracks only two cable and satellite-delivered Spanish-language networks: Univision’s Galavision and Fox Sports en Espa ‘ol. The other, newer services have not yet received significant enough distribution to show up on ratings radar.
Galavision offers a more diverse blend of prime-time fare than does Univision. Its lineup includes the comedy “Juntos Pero No Revueltos (Together but Apart)” at 8 p.m., and a 10 p.m. talk show, “Al Ritmo de la Noche (Rhythm of the Night).” Galavision delivers its best ratings on Sunday nights, with telenovela “Coraz ‘n Salvaje (Savage Heart)” and “Acci ‘n (Action),” a sports program.
Fox Sports en Espa ‘ol hit ratings paydirt earlier this year with its telecast of a series of Mexican soccer tournaments. The channel, owned by Fox Sports International, News Corp., Liberty Media and the investment firm Hicks, Muse, Tate & Furst, is available in about 6 million cable and satellite households in the top 40 U.S. Hispanic markets.
Spending Attracts Ads
Advertisers have begun to take notice, refocusing millions of dollars toward Hispanic consumers. Hispanics now are roughly tied with blacks as the biggest minority group in the United States-about 13 percent of the population-and wield a tremendous collective wallet. UBS Securities estimates that Hispanic consumers will spend $600 billion on products and services this year.
“Because of being a younger population and having a higher proportion of children, it sets some definite buying trends,” said Steve Mandala, Telemundo’s executive VP of sales and marketing.
Ad revenues for Univision and Telemundo combined rose nearly 15
percent in 2002 as advertisers and the agencies that serve them redoubled their efforts to reach the Hispanic community.
“This is a huge growth area for us,” said Michele Fabrizi, president and CEO of Marc USA, one of the country’s fastest-growing independent advertising agencies. The Pittsburgh-based company last year formed Marca Hispanic LLC, a full-service Hispanic marketing communications firm, to help capitalize on the Spanish-speaking demographic.
“Before, we would talk to clients [about Hispanic advertising] and they would say, `Yeah, we’ll get around to it.’ Now everybody wants to know more about the Hispanic marketplace,” Ms. Fabrizi said.