Hispanic Media Remains Area of Growth

Feb 13, 2008  •  Post A Comment

With concerns about a possible recession worrying ad sellers at most media outlets, marketers are expected to continue to increase spending to reach Hispanic consumers.
“The Hispanic market remains in a growth phase, unlike the slowing English-language media market in the U.S.,” SNL Kagan senior analyst Deana Myers said in a recent report. “The recognition of a growing audience with increasing buying power has highlighted the importance of targeting the Hispanic population.”
Spending to reach Hispanic households will jump from $4.3 billion in 2007 to $5.6 billion in 2011, according to the SNL Kagan forecast.
The Hispanic population in the U.S. was projected to exceed 44 million by the end of 2006; the Census Bureau expects it to top 50 million sometime in the next decade.
From 2000 to 2007, the purchasing power of the Hispanic population grew 8.4% annually, giving the group more disposable income than any minority in the U.S. As a proportion of their income, Hispanics spend more on food at home, housing, transportation, apparel and services than the population as a whole. According to figures from 2006, they spend less on health care and entertainment, however.
For media planners, there is no shortage of ways to reach Hispanic consumers.
“We estimate there are 80-plus cable networks, four major broadcast networks, 436 Spanish-language TV stations and 617 Spanish-language radio stations (including Puerto Rico),” the report said.
In addition, cable operators are adding video-on-demand offerings aimed at the demographic and smaller broadcast networks are emerging, including TuVision, which launched on the Pappas Communications stations. Also, there are outlets targeting second- and third-generation Hispanics who speak English or a combination of Spanish and English.
But Hispanics are not a huge percentage of cable and satellite subscribers. In 2007, SNL Kagan estimates that 71.6% of Hispanic TV households had a multichannel subscription, compared to 87.6% for the entire U.S.
In her report, Ms. Myers said satellite providers were the first to target Hispanics with special packages of Spanish-language programming. Dish Network, which first offered a Spanish-language package in 1998, has the most Spanish-speaking subscribers, with 1.3 million in 2007. DirecTV, which launched its package in 1999, has 1.1 million Spanish-language programming subscribers.
Cable operators had difficulties attracting Spanish-speaking subscribers because they required them to pay for digital before they were able to access Spanish-language programming, making costs higher for “the typically cost-conscious Hispanic consumer,” the report said. “That has recently changed, as most cable operators have begun to offer the Spanish package separately.”
With the Hispanic market growing and distributors making more of an effort to generate revenues from this demographic group, SNL Kagan expects Hispanic multichannel households to rise from 8.7 million in 2007 to 9.7 million in 2011. Hispanic TV homes are expected to increase from 12.1 million to 13.4 million over the same period.
And while broadcast networks attract the most ad dollars from marketers looking to reach Hispanic households, SNL Kagan expects cable networks to have greater growth in the next several years. Ad spending on cable networks targeting Hispanics is expected to grow 20.5%, compared with 6% growth for broadcast networks, including a 27.5% increase in advertising on cable.
At this point, there are only a few Hispanic-targeted cable networks with wide distribution, including Galavision and SiTV.
With limited space available for linear channels, some Spanish-language programmers have tried to get distribution via video-on-demand.
“Some are using it as a marketing tool, while others plan to use advertising to support their business model,” Ms. Myers said.


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