Posted January 12, 2005 by publisher in Cuban Americans.
When Jorge Fiterre started his company Condista to distribute Spanish-language television channels in the United States, he had one client in hand and had to hunt down more. Now he’s representing 15 channels and they come to him.
“Five years ago, it was a nice idea to have some Spanish-language programming. Now it’s a must-have for the cable operator,” said Fiterre, who’s based in Coral Gables.
To say Hispanic pay television is booming may be an understatement. There are now 75 networks, both Spanish-language and English-language, catering to U.S. Hispanic viewers, according to Multichannel News and Broadcasting & Cable.
Nineteen networks were launched in 2004 alone. And they followed 14 new entries in 2003. Still more are coming—five channels are slated to go up this year by the trade journals’ count. The new Hispanic entries represent just a fraction of the hundreds of English-language channels available and going on line, but it’s a hefty number for a market that’s still emerging.
ENORMOUS GROWTH POTENTIAL
Like many marketers, the media industry has spotted the enormous growth in the U.S. Hispanic population. The University of Georgia’s Selig Center for Economic Growth projects that the Hispanic population will grow by 19 percent over the next five years, to comprise 16 percent of the U.S. population in 2009. Hispanic purchasing power will shoot up to $992.3 billion in 2009, up from $686.3 billion currently.
“Overall it’s a huge set of cable networks going after this segment,” said David C. Joyce, media analyst for J.B. Hanauer in Hollywood. “The rate of new channels has got to slow down.”
Most of the growth is coming from cable, which is trying to catch up with satellite competitors that started offering Hispanic packages in the late 1990s. Even Spanish-language broadcasters see cable as fertile territory.
LOTS OF OPTIONS
The deluge of new channels means that Hispanic viewers now have TV options that virtually parallel the array of English-language special interest channels.
There are the “en español” versions of mainstays such as CNN, Fox Sports and MTV. There’s also ESPN Deportes, as well as a host of tailor-made startups such as GolTV soccer channel, Sorpresa! for kids and inspirational channels TBN Enlace and La Familia.
A wide range of networks is beaming in from Latin America and the Iberian Peninsula. Homesick immigrants can tune into TV Chile, TV Colombia, TVEspaña, Centroamerica TV or Canal Sur, which airs news shows from around the region.
An increasingly competitive genre is Latino-flavored, English-language channels aimed at bilingual Hispanic youth: mun2 (mostly Spanglish), SíTV, and soon-to-launch Voy Network.
The wave of new networks has made it a hard-fought battle to nab a spot in the increasingly crowded Hispanic-channel packages offered by cable and satellite operators.
Pay TV providers are getting choosier about which channels they take on, examining everything from the company’s financials to the appeal of a particular channel in a specific region, as well as alternative offerings in a genre.
“In 2002 the barrier of entry was low because they just needed product,” said Richard Taub, vice president of network strategy and distribution for Spanish-language HITN, a PBS-style educational channel. “It’s an arduous process to get distribution now.”
The competition may thin over the next few years. Industry insiders expect that some networks will eventually fall by the wayside since viewership for many of these niche channels is likely to remain small—in the tens of thousands or low hundreds of thousands.
A FRACTION OF THE POPULATION
About half the nation’s 11 million Hispanic homes subscribe to cable TV, but only a fraction of them has signed up for Spanish-language programming.
“Even if you’re in all the Hispanic packages, you’d be in only 2 million homes,” Fiterre said. “The advertising market is still not there. It’s very hard to survive in the U.S. Hispanic market only.”
The channels most likely to flourish are those that have already established revenue streams, from other countries or business lines, he added.
One broadcaster said he’s turned down offers to put his network, MásMúsicaTeVe, on cable because the viewership would be too small to attract big-name advertisers.
“The Hispanic tiers don’t work,” said Eduardo Caballero, chief executive of the Coral Gables-based music network that airs on 27 stations. “The audience is very fragmented.”
Cable companies are on the run to boost their Hispanic subscriber base since growth in the general market is limited—about 80 percent of households currently watch pay TV—and they were beaten to the punch by satellite TV.
Both DISH Network and DirecTV launched Spanish-language programming tiers in the late ‘90s and now have about 1.4 million Hispanic subscribers between them, industry observers said. Both offer packages of about 30 Spanish-language channels for less than $30 a month.
But many cable operators did not offer Hispanic packages until well after 2000. Growth initially lagged because the Hispanic tiers were extras tacked onto other packages that subscribers also had to pay for.
In South Florida, for example, AT&T Broadband subscribers had to pay about $65 a month to get a handful of Spanish-language channels.
Operators have since changed that strategy.
After taking over AT&T Broadband in 2002, Comcast started offering Cable Latino, which offers about 16 Spanish-language and music channels, plus basic service, for about $25 a month. “The response has been incredible,” said Filemon Lopez, senior vice president of Comcast South Florida.
Adelphia’s Hispanic package offers about 30 channels for $30 a month while last June Atlantic Broadband launched a Latino Tier and basic services for about $30 a month, which includes 23 Hispanic channels.
Satellite “had a very strong Hispanic package,” said David Limebrook, director of sales and marketing for Atlantic Broadband, one of three main cable operators in South Florida. “We felt we had to answer it and we are.”
Meanwhile, the big broadcast players Univision and Telemundo are expanding their cable presence. Univision was one of the forerunners in the field, starting up general entertainment channel Galavision in 1979. In 2003, it launched TuTv, a suite of five Mexican music and movie channels, in a partnership with Televisa of Mexico.
Telemundo launched mun2, a bilingual youth channel, in 2001 and is now looking to expand its cable ventures. “We definitely see it as a growth opportunity,” said spokesman Alfredo Richard. Parent company NBCUniversal “is excited about what we can do with the cable market.”
The stakes are high in the fight for Hispanic viewers, those in the industry say. Hispanics tend to watch more TV than other demographic groups and they like to use pay-per-view services.
That’s no small potatoes when the target is the fastest growing segment of the U.S. population. “They’re a great TV audience,” said Limebrook of Atlantic Broadband.
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