Hispanic High

Univision president and chief operating officer Ray Rodriguez would much rather have his network spend time trying to take away ad dollars from the English-speaking broadcast networks and ignore rival Hispanic network Telemundo. But like an annoying gnat buzzing around—and infused with financial backing from its new parent NBC—Telemundo is a competitor, albeit a distant-second-place competitor, that Univision cannot always ignore.Witness an exchange just two weeks ago at the upfront presentations, as Univision and Telemundo laid out their schedules for next season before media buyers. "This season, 75 percent of our prime-time novelas were produced by us and specifically targeted to U.S. Hispanic audiences," Jim McNamara, Telemundo president, told those gathered. "Next season, we will produce 100 percent of our prime-time novelas, unlike our competitor [Univision], who airs novelas made for foreign audiences and are then re-shown here."Rodriguez scoffs at McNamara's logic: "I think it really doesn't matter where a program is produced. The viewers don't think that way. What matters is the content. We put on proven winners, not experiments. We get three times the ratings as Telemundo, so we must be doing something right.""We are the broadcaster for the Hispanics living in the United States," counters McNamara. "We continue to make inroads with Mexican-Americans, who make up the largest component of Hispanics in the United States. The Mexican-American portion of our audience was 62 percent this season, compared to 42 percent last season."Raquel Tomasino, executive vp and media director at Castells & Associados, who buys Hispanic TV ads for clients like Dole Foods and Toyota, says that since Univision has a long-term deal with Mexican producer Televisa, Telemundo is not able to buy novelas out of that country and has no choice but to produce its own or buy them from other Latin American producers. She adds that Telemundo-produced novelas are of "excellent quality," noting that some of their talent used to be under contract with Televisa. "They are pulling some of their stars away," she says.As Univision and Telemundo spar to gain an edge with advertisers, Tomasino doesn't think that the viewer notices much: "I do believe Telemundo's novelas have better production quality, but the viewers are more concerned with the stars. They care less about production and want to see the Mexican stars."The back-and-forth between Univision and Telemundo does not stop with who produces their programming. "Univision will talk about their market position, not their growth, since they are down," McNamara says.Otto Padron, vp of programming and promotions for Univision Network, says, "Telemundo is talking about its growth, but they are at the same [audience] level they were at two years ago." He adds that Telemundo's share of the Hispanic TV audience is at 21 percent this season, up from 17 percent last season, but up only slightly from the 20 percent level of two years ago. While still a distant second, with the new infusion of cash and executive support from NBC, Castells' Tomasino believes Telemundo is a competitor to watch. "We know that Univision is the 800-pound gorilla, but competition is healthy. Telemundo has done a tremendous job of being at the forefront of innovation, introducing new genres of programming. Telemundo needs to be aggressive if they are going to chip away to gain market share."Univision's Rodriguez defends the net's devotion to proven genres, although Univision will aggressively jump into reality programming next season, a year after Telemundo did so. At the upfront two weeks ago, Rodriguez told advertisers, "Our competitors would have you believe you should not advertise with us because we don't experiment enough. But 48 of the 50 highest-rated shows among Hispanic audiences are on Univision. We have shown continued success. There is a time and a place for experimenting, and we don't believe it's on the air with your money. We will put shows on the air that work—proven winners, not experiments."But Tomasino praises Telemundo's jump into the reality genre this season—including its own version of the ABC hit The Bachelorette, called La Cenicienta—adding that its reality slate for next season "looks great." But, she says, it remains to be seen how Latino viewers will embrace the expanded menu of reality on both Telemundo and Univision.Telemundo's McNamara says that his network "owns the reality genre on Spanish-language television." He promises that next season's slate of reality shows, Nuevas Voces de America (New Voices of America), El Principe Azul (Prince Charming) and La Hacienda (The Ranch), will lead to watercooler chitchat. Nuevas Voces de America is similar to Fox's America Idol and is one of a series of offerings from Emilio Estefan, with whom Telemundo signed a programming deal. On the show, Estefan and team will select a group of aspiring singers to live together and compete for the crown of the "New Voice of America." El Principe Azul, from the creator of La Cenicienta, is Telemundo's version of The Bachelor. On La Hacienda, 16 "city slickers" will compete doing ranch chores.Not to be outdone, Univision will air two reality shows: Lo Veremos Todo con Niurka y Bobby (Life with Niurka and Bobby), in which the popular Hispanic-American star couple opens their home to Univision cameras (à la MTV's Newlyweds: Nick and Jessica), and Apostando al Amor (Betting on Love), Univision's version of The Bachelorette. Univision's sister broadcast net, the younger-targeted TeleFutura, will air four new reality shows.In addition to Nuevas Voces, Estefan will produce two music shows for Telemundo, along with the special Tributo a Nuestros Heroes (Tribute to the Troops) next season, a concert honoring Hispanic soldiers serving in Iraq. Not to be outdone, Univision has inked a deal with the family of late singing sensation Selena to produce a live concert featuring her songs on the 10th anniversary of her death.Univision is touting Mujer de Madera (Woman of Wood), starring Edith Gonzalez as a woman who is jilted at the altar but is able to find a new love, as its "blockbuster" novela next season. McNamara touts Gitanas (Gypsies)—a show about a Gypsy woman who falls in love with a non-Gypsy and must overcome family obstacles, produced in Mexico by Telemundo's own studio—as the network's "biggest novela ever, with a who's-who cast."On going after the English-language nets for ad dollars and viewers, Tom McGarrity, co-president of Univision Network sales, says, "We are poised to provide national advertisers an alternative to the high CPMs and eroding audience of English-language networks by offering mass reach, mass distribution and a growing audience more efficiently in Spanish, with multifaceted opportunities to target the nation's largest minority group.""We are going after the English-language networks," seconds Rodriguez. "That's where our growth will come from, especially in ad dollars." At the upfront, Rodriguez pointed out the strength of his network's programming among Hispanic viewers—pointing out that NBC's May 4 Friends finale did an 11.4 rating among Hispanic adults 18-49, while the Univision novela airing in the same time period earned a 13.1 rating. Rodriguez says his net's revenue this year will total around $1 billion, with about $700 million of that coming from the last upfront. If growth rates of 20 percent (the average the past few years) hold up, this upfront take could rise to $840 million. Telemundo brought in about $230 million in the last upfront, and its take could jump to $275 million this time around. A combined total of $1.1 billion would pass the magical billion-dollar mark for the first time, and would mirror the combined upfront total of English-language broadcast networks the WB and UPN.Telemundo's McNamara believes key growth categories in this year's upfront will be pharmaceutical, financial institutions and packaged goods. In the packaged goods area, current advertisers like Procter & Gamble might be persuaded to expand the number of brands they are advertising, he says. And a similar expansion could take place among automakers.McNamara says that while Telemundo will sell independently from parent company NBC, "there may be some instances where they can open some doors for us." Airing the Olympics on Telemundo this summer will draw more viewers and enable the net to promote its fall schedule to a broader audience, he says. The Olympics is just one perk Telemundo is getting from parent NBC. NBC and parent General Electric financially supported the creation of Telemundo's in-house production operation. "We tripled our prime-time expenditures last year when we started producing our own novelas, and this year we asked to produce a fourth hour of prime-time programming and there wasn't a blink [on the part of corporate executives]," McNamara says. Telemundo's prime-time programming budget next season will be $50-$60 million, he says.McNamara adds that Telemundo's on-air correspondents will appear on NBC's news programs when stories warrant it, and that Telemundo plans to take advantage of the Universal film library following the completion of the NBC/Universal merger. While not aligned with an English- language network, Univision built its reach by starting TeleFutura two years ago. Although some of TeleFutura's audience growth has come at the expense of Univision, it has not affected overall revenue, since the nets are part of the same company. While Univision targets the more traditional Hispanic viewer, the median age of the TeleFutura viewer is a young 29.8. TeleFutura is where Hispanic viewers can find more theatricals, music and sports shows, and, as reported, more reality.On cable, Univision and Telemundo continue to compete with Galavision and Mun2 in another David vs. Goliath battle. Univision-owned Galavision is the largest cable network for Hispanic adults, outdelivering the other 13 Spanish-language cable nets in viewers combined. A bit like TeleFutura on the broadcast side, Galavision's focus is on sports and variety and music shows, as well as news programming. Mun2 targets adults 18-34 with music videos, extreme sports, game shows, entertainment programming and younger-skewing dramas. Like Telemundo, more and more of its programming is produced in house and in the United States. And unlike Gala- vision, its programming is bilingual. Univision's Rodriguez says his advertising staff has called upon media agencies and clients over the past several months, pitching the U.S. Hispanic audience they will miss if they advertise only on English-language TV. Last year, about 140 advertisers bought time on Univision during the upfront, while the English-language nets, during their upfront, brought in business from more than 300 advertisers. Clearly, both Univision and Telemundo have plenty of room to grow.John Consoli is a senior editor at Mediaweek who covers network television and Hispanic media.

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Hispanic High

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John Consoli