Call it the Hispanic TV baby boom. For decades, the biggest player in the game has been Univision, and while that’s not going to change anytime soon, dozens of newcomers—some 100 channels, up from 15 in 2001—are crowding the field.
With new cable channels from Univision, multiple Spanish-language channels via Comcast, plus a planned broadcast network from no less than News Corp., Hispanic TV is marginalized far less than it was even just two years ago. NBCUniversal is pouring money into Telemundo, the No. 2 Spanish-language broadcaster, as well as cable network Mun2. MundoFox represents a serious investment for News Corp., hoping to shake up the Spanish-language TV landscape much as it did when it launched Fox as a serious rival to the onetime Big Three English-language nets. Meanwhile, ABC-Disney is rumored to have its own Spanish-language news partnership in the works.
And yet, while this is a growth market in which programmers and advertisers alike have dollar signs in their eyes, the Hispanic demos being targeted—desirable because of their growing numbers and large youth population—are not always so easily defined, easily understood or, thus, easy to pin down.
There is also the formidable challenge of competing in a market for years wholly dominated by two players.
As far as the 800-pound gorilla of the category is concerned, Univision—which has finally emerged from its protracted legal snarl with content provider Televisa—was the only major broadcaster to grow audience in the coveted 18-49 demo last season.
The network possesses a couple of attributes advertisers love: viewer loyalty (an astounding 67 percent of Univision viewers watch only that network) and negligible DVR usage among its viewers. Even Comcast CEO Brian Roberts, with dominion over Univision’s direct competitor Telemundo, has pointed out that the breakdown of the Spanish-language TV market is essentially 80 percent Univision and 20 percent Telemundo. (The actual ratio is about 74 percent Univision, down from 79 percent a decade ago.)
Per SNL Kagan, Univision generated $825 million in advertising revenue in 2011, while Telemundo earned $329 million.
Univision is also increasingly tracking ahead of its competition in the mainstream, coming in first on Friday night among 18-to-34-year-olds during February sweeps. It also regularly beats NBC in the 18-49 demo. It’s little wonder, then, there remain persistent rumors the company has an IPO in the works.
Cesar Conde, president of Univision Networks, insists the company views the expansion of the marketplace as nothing but positive, regardless of whether it makes for more competition. “The pie has grown for everyone, which has been a tremendous benefit for Univision but also for our friends and colleagues in the business,” he says.
It’s been about 15 months since the latest data broke from the 2010 U.S. Census and the American Community Survey, which parsed population growth between 2005 and 2009. Both showed that the Hispanic population grew exponentially during that period even as the recession slowed immigration.
The U.S.-born Hispanic population, in other words, is expanding naturally and rapidly. A result has been that the constellation of Latino TV stars, once largely ignored by English-language networks in the U.S., are getting closer attention.
That more or less pits everyone wanting to reach Hispanics with strong roots abroad against Univision. The vast majority of international telenovela talent works for the Mexican media conglomerate Televisa, which has a first-look deal with Univision that guarantees the network considerable leverage—at least until its stars’ popularity fades, which can be a long time to wait.
The relationship between the two companies hasn’t always been a comfortable one. Televisa sued Univision for breach of contract in 2009, claiming $134 million in unpaid royalties in a bid to end its contract early. The companies eventually settled out of court for an additional $585 million in ad time, and their renewed agreement (through 2025) is more than amicable. “At this point, we can really unlock value that neither of us had access to before,” Conde says. “In the original agreement, neither of us had access to digital rights. At the risk of stating the obvious, nobody capitalizing on digital rights does nobody any good.”
Conde doesn’t underestimate the value the partnership brings to his company. “This is one of those transactions in which one plus one equals three,” he says.
Meanwhile, Emilio Romano, a media veteran and former Univision board member who was tapped to become president of Telemundo last September, says his network aims to make inroads with talent from other networks by offering them perks to jump to Tele-mundo. “We can devote time to our actors and actresses and help to build not just their on-screen careers but their singing careers and [more] in the whole 360-degree environment,” Romano says. “We’re finding that that’s very powerful.”
There are other variables that a company as large and far-reaching as NBCU can exploit. For example, Telemundo won the rights to broadcast the 2018 and 2022 World Cup—a coup that didn’t come cheap. The company shelled out a reported $600 million for Spanish-language broadcast rights (Fox paid $400 million for English-language rights). Compare that to 2005, the last time a World Cup deal was negotiated, when Spanish-language rights went for $325 million and English-language broadcasts sold for $100 million. As programming gets more expensive, expect ad rates to follow.