TV Bebé Boom

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. Spanish-language programming is getting more sophisticated as the size of the market grows. While it’s true that many American Hispanics love novelas, repackaged programming from abroad does not necessarily resonate as much as material produced in the U.S. for American audiences. With that in mind, Univision’s stateside production company, Univision Studios, has generated U.S.-specific material for the network since it was created in 2009. “It’s natural over periods of time that communities, people, audiences evolve, and that’s one of the responsibilities for us as a media company to evolve with them,” says Conde. Consequently, Latino-focused TV production in the U.S. has ramped up and is where advertisers are happiest putting their budgets. “We’re importing less and making more, and obviously that’s expensive,” says Jose Tillan, general manager and evp of MTV’s Spanish-language sister, Tr3s. “But it also rates the best and it’s what our advertisers want, rather than an imported product from Mexico or Colombia or Venezuela.” Significantly, the latest Census data showed the U.S. television industry in the U.S. not only that there was an underserved segment of the population—second- and third-generation Hispanics who don’t care so much for repackaged programming from elsewhere in the Americas—but also that they weren’t most effectively leveraging general market content with these audiences. Romano says Spanish-language broadcasters run the risk of losing an enormous chunk of their bilingual viewership. “When we’re dealing with Hispanics who are Spanish-predominant, the language barrier works in our favor, and they’re watching only Spanish-language media. Second- and third-generation Hispanics can go anywhere in the general market,” he explains. In short, Spanish-language TV doesn’t tell the entire story of the Hispanic consumer. Second- and third-generation Hispanic Americans watch plenty of English-language television, of course. As that audience grows more acculturated—and likewise, as the American culture and TV programming come more and more to reflect this particular segment of the population—nostalgia for entertainment by way of the rest of the Americas could wane. Therefore, the explosion of new television networks won’t necessarily look like the invasion of the telenovela. Director-producer Robert Rodriguez—best known for his feature films El Mariachi, From Dusk Till Dawn and Sin City, and who is launching a male-targeted digital network for Comcast called El Rey (“The King”)—explains: “Things that work for the first generation don’t work the same way for the others.” Fully developed Hispanic characters, Rodriguez adds, “mean a little something to people who are Latin because they get to go, ‘Oh cool, we’re on television.’ They don’t want to feel like they’re a niche group that has to have their special programming. They want to feel like they’re part of the culture at large.” Rodriguez—whose network will be in English, even though, he points out, “You’ll see some things that reward you for speaking Spanish”—says he wanted to create generally entertaining content that would overindex with Hispanic consumers, rather than merely pandering. “People think, oh, they’re a niche audience—let’s make ’em niche programming,” he says. (It bears mentioning that Rodriguez is one of few second-generation Hispanic Americans to have achieved the highest reaches of the television industry in the U.S., let alone run a network.) Locally produced content also helps pave the way for integrated talent and product placement, both of which attract more ad dollars as viewership becomes more fragmented, and mobile. As partnerships between advertisers and networks become more common and more tight-knit, Hispanic-focused channels are looking to generate still greater revenue from those deals. “The biggest thing for me going into the upfront is the inequity in market share,” says Lauren Zalaznick, who heads up NBCU’s Entertainment and Digital Networks division, including Telemundo. “You have 16 percent of the population simply defined as Hispanic through the Census, but we command only 4 percent of the ad dollars in advertising—it’s really disproportionately low,” the executive points out. NBCU’s position is a unique one. While it is not uncommon for a media company to offer product integration in programs and across properties, far fewer are offering integration by demographic across multiple networks. One of Zalaznick’s key marketing initiatives in recent years has been Hispanics at NBCU, a program that allows advertisers to buy time on shows across the company’s entire media portfolio which attract a larger-than-average Hispanic viewership, as opposed to buying time on a single network. Those campaigns cost more than a standard-issue media buy, but also they tend to overdeliver. Univision is getting into the business of integrated marketing as well (see Trending Topics, page 12). That promises to up the ante considerably since closer associations with the network’s biggest asset—its exclusive talent pool—will doubtless attract plenty of advertiser attention. “There’s such a strong connection to this culture as long as you’re able to offer programming they can’t find anywhere else,” Conde says. “This is a very savvy consumer.” Click here to view more content from The Hispanic Issue.

Convergent TV

TV Bebé Boom

Univision and Telemundo still dominate Hispanic TV, but a rash of start-up channels is about to make things a lot noisier

Sam Thielman

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Sam Thielman