By Wayne Karrfalt
Special to TelevisionWeek
Monday marks the launch of MTV Tr3s, the latest in a series of new cable and broadcast networks dedicated to superserve the burgeoning population of young, acculturated Hispanics in the U.S. From world premiere videos of Ricky Martin to Latino versions of popular MTV hits like “My Super Sixteen” and “Pimp My Ride,” young Latinos finally have their own MTV.
The concept of entertaining Latinos in English or with a mixture of Spanish and English is not new. The channel follows mun2, run by NBC Universal’s Telemundo; the independent S?TV; and Los Angeles’ local over-the-air LATV, all vying for 12- to 34-year-old Hispanics. These networks all try to appeal to the demo by providing a more authentic environment in which viewers can see themselves portrayed, said Monica Gadsby, CEO of Hispanic-oriented ad agency Tapestry.
“At the core, culture, not language, is what keeps people coming back. These networks are leveraging the idea of a cultural connection to young Hispanics,” Ms. Gadsby said.
But the distribution model MTV Tr3s is pursuing is a first. It is launching on DirecTV Para Todos and on Comcast, Time Warner, Cox and Cablevision digital cable platforms in many of the larger Hispanic TV markets but is also filling in the blanks by going out over the air via low-power and full-power broadcast affiliates in communities across the U.S. The fact that a channel with the power and marketing muscle of MTV Networks behind it would choose a hybrid approach to reach this audience indicates just how tough it is to a launch a service in today’s saturated multichannel environment.
Despite compelling demographic trends-Hispanics will contribute nearly half of the population growth in the U.S. in the next decade, according to U.S. Census figures, more than two-thirds of whom will be born here-cable operators refuse to add any new services to their analog lineups, instead relegating them to digital basic, digital plus or, worse yet, a Hispanic-targeted tier of channels that requires an expensive buy-through by the subscriber to access. Without widespread distribution these channels cannot make the case to advertisers that they are providing a much-needed home to bilingual, bicultural Hispanics.
“If you want to monetize the channel, the agencies supporting you need to see you. If they can’t get you in their market, that has a big impact on whether or not they buy you,” said Lucia Ballas-Traynor, senior VP and general manager of MTV Tr3s, who says the channel will launch this week in about 5.9 million Hispanic cable homes with three full-power and 15 to 20 low-power station affiliations to follow.
LATV, the music-centric lifestyle and entertainment network owned and operated by West L.A.-based bilingual station KJLA-TV, reaches 4.4 million households in the Los Angeles DMA over the air and as a must-carry on cable, DirecTV and Dish Network. It was one of the first networks to target young bilingual Hispanics with live, in-studio shows and concerts with established and up-and-coming artists. But after trying to negotiate carriage deals with satellite and cable providers outside of its footprint, it recently abandoned the strategy because deals were too limiting in terms of reach of both Hispanic and general-market homes.
Instead, LATV is pursuing agreements with broadcast affiliates across the U.S. to launch as a 24-hour digital multiplex channel like The Tube, a music video channel founded by MTV veteran Les Garland, which has signed agreements with local Raycom, Tribune and Sinclair stations. It’s betting that as the country moves closer to the February 2009 deadline to convert to all-digital, there will be more interest in filling out the digital spectrum with local stations and more interest from cable operators in picking up these signals if the channel is able to carve out a niche in these individual communities.
“The cable business plan didn’t work for us,” said Daniel Crowe, president and co-founder of LATV. “We wanted to be in Hispanic homes across the country, but we also wanted a national footprint in the general market. It’s questionable how successful you’d be in 10 million homes if only 2 million are Hispanic.”
Ad Support Picks Up
Encouraged by a deeper commitment from advertisers, both in the number of brands entering the market and in the financial commitment they are willing to make, not all Hispanic youth networks are throwing in the towel on making a pure cable play. Two-year old S?TV, with its tag line “Speak English, Live Latin,” was added to Time Warner Cable in Houston in June, Cox Baton Rouge in August and Comcast Albuquerque this month. S?TV is now in 13 million homes, including 2 million recently consolidated Time Warner Cable homes in its local market of L.A.
Although S?TV has received small equity contributions from two of its distributors-Time Warner and EchoStar Communications-CEO Michael Schwimmer says the channel’s distribution is growing because it delivers meaningful programming, 60 percent of which is produced in-house, and a loyal upscale audience. In Beta Research Corp.’s 2005 Cable Subscriber Study, S?TV ranked No. 1 among emerging and midsize networks on its index related to why customers subscribe to digital cable.
“I think cable operators want and need a strong connection to the Latino community,” said Mr. Schwimmer, who noted that the 18 to 34 Latino demo over-indexes on psychographics that deep-pocketed marketers care about, such as cellphone usage and hours spent online. “Whoever provides the best programming for that audience is going to find cable operators can be good partners and that a strong business can be built,” he said.
For the longest time these channels have been victims of small-channel economics, unable to improve programming and thus distribution because of a lack of revenue. Now bigger paychecks from advertisers are helping to fund better original shows.
Part of what’s happening is that a rising Hispanic tide is lifting all boats. NBC Universal-owned mun2, which relocated from Miami to Los Angeles, invested in a brand-new studio at Universal Studios CityWalk and relaunched with new programming and a new on-air look in October 2005, shared in a 25 percent uptick in upfront sales of its parent Telemundo this spring. The overall Hispanic marketplace took in an estimated $1.45 billion this year, an increase of 12.5 percent.
Mun2 General Manager Alex Pels said the network has added 14 new advertisers to its roster in the past year.
“We are the only network targeting this demo that is rated by Nielsen. When we talk about triple-digit growth over the last eight months, our numbers are based on NHTI ratings, and that makes a big difference to advertisers,” Mr. Pels said.