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Posted January 31, 2005 by publisher in Cuban American Business

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By Laurel Wentz | AdAge.com

Again Outpace Mainstream Media’s 4% Annual Growth Rate

In 2005, Hispanic media is forecast to match last year’s 11% growth rate, reaching $3.5 billion and far outpacing mainstream media’s projected 4% revenue increase.

TV is leading the surge of Hispanic media.

Radio and print are growing at 11% and 12%, respectively, with TV up 9% and the online medium up and incredible 50%.

In TV, which accounts for about two-thirds of the U.S. Latin media market, new advertisers, new viewers and new programming options are all contributing to the strong growth.

“Before, if you weren’t a novela watcher, you weren’t watching Spanish-language TV,” says Tom McGarrity, co-president of Univision Network sales.
Telenovelas are still ratings blockbusters, filling most of the prime-time weekday hours on leading network Univision, NBC Universal’s No. 2 Telemundo and aspiring newcomer Azteca America. But Univision has also found success with a second network, TeleFutura, which counterprograms against novelas with movies and other fare, and has almost caught up to Telemundo in ratings in just two years.

Home makeovers vs. telenovelas

And Telemundo, as the distant No. 2 in ratings, is always willing to innovate. Telemundo is taking the lead, for instance, in introducing the popular home makeover genre to Spanish-language TV, with big home-improvement chains on board. A Home Depot-sponsored show debuts in mid-February, and Lowe’s is the main sponsor of Lo Dejo en Tus Manos ( Leave It in Your Hands.) The twist in that show, running weekly for the last two months, is that the homeowner chooses one of six professional decorators to make over a room—but doesn’t know some of them are only pretending to be decorators. When Evelyn unwittingly picks Joel, a smooth-talking PR flack who knows nothing about decorating, at least she gets a nice set of Whirlpool appliances free from Lowe’s.

Azteca America, after a year in the market, has abandoned its business model of using all imported programming from TV Azteca, Mexico’s second biggest TV group.

“That was a mistake,” says Carlos de la Garza, Azteca America’s president of sales and marketing. “It doesn’t work.”

Developing U.S.-grown content
Azteca is adding some U.S.-produced content, from gossip items on J. Lo for Azteca’s daily entertainment show Ventaneando to sports commentators using the faster-paced, more animated delivery popular in the U.S. And this year La Academia, a popular reality show featuring 16 aspiring singers, will be cast entirely from the top U.S. Hispanic cities. Last year, there were 14,000 contenders for the single U.S. Hispanic slot in the Mexican version of La Academia, Mr. de la Garza says.

A bigger issue for Azteca is distribution. Azteca reaches just 56% of Hispanic households, although Mr. de la Garza says that will rise to 70% by May.

Trying to compete with Univision’s smash hit novelas like Amor Real and Rubi, which reach the U.S. market with a time lag of six months or so, Azteca will shake up the novela market this year by airing the same novelas simultaneously in Mexico and the U.S. This will enable Azteca to negotiate cross-border ad deals and product placements and sponsorships.

Filming in a Dallas barrio
Telemundo has a novela strategy of its own. Adding a U.S. Hispanic twist, Telemundo is filming a whole novela, La Ley del Silencio (The Law of Silence) in a Hispanic barrio (neighborhood) in Dallas. And in late December, Telemundo distributed 250,000 copies of Viviendo (Living), a 24-page magazine with basic information about immigration linked to a current Telemundo novela about Mexican immigrants to the U.S., through newspapers and community events.

“We want to find ways to connect with things the U.S. Hispanic uniquely goes through,” says Steve Mandala, Telemundo’s executive vice presidnt for sales.

Novelas writer’s workshop
This year, Telemundo is also starting Taller Telemundo, the first writers workshop for aspiring novela writers. Working with Miami Dade College, Telemundo is whittling down more than 3,000 applicants who submitted concepts and essays to 30 students for a four-month writing program that starts in March. Half of the students will then enter an apprentice program at Telemundo to work on existing novelas.

Lee Westerfield, an analyst at brokerage Harris Nesbitt, attributes his 2005 forecast of 11% growth for Hispanic media partly to recent audience gains of 11% for Spanish-language TV and 7% for radio.

Overtaking viewership share
Univision cites Nielsen Media Research data to show that Spanish-language TV is taking share from the English-language networks that Univision sees as its main competition. In 1992, when Nielsen began measuring Hispanic viewership, Spanish-language TV had a 38% audience share and English-language viewership was at 62%. Two years ago, those lines crossed as viewership was split 50-50. In early 2005, Nielsen reports 55% Spanish-language viewership, and 45% English-language viewership, Univision says.

The next generation
On the other side of the language debate, Fernando Espuelas, CEO of Voy, a company developing English-language entertainment for Hispanics, says 75% of growth for the next 20 years will come from Latins born in the U.S., who are more likely to be English speakers, rather than immigrants. And Mr. Westerfield says in a Harris Nesbitt report that English-dominant Hispanic households account for a larger share of buying power—59%—than Spanish-dominant households.

Seeking that acculturated Hispanic market, Jeff Valdez’s English-language digital cable channel SiTV is up to 9 million homes since its February 2004 launch. SiTV is attracting some marketers, such as Burger King Corp., that are doing English-language spots featuring Hispanics and others, such as American Suzuki Motor Co., that do no Spanish-language advertising, he says. In a segment called “All Tricked Out” on the show The Drop, for instance, Suzuki customizes hosts’ cars to fit their personalities. One host got an all-pink car, equipped with a shoe rack and pink bubble gum machine, he says.


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