Fusion’s cable programs, website have yet to explode

When the cable TV channel Fusion went live on Oct. 28, 2013, the moment was the culmination of several years of preparation, research and experimentation by Univision and the Walt Disney-owned ABC News. The joint venture was designed to capture the attention of millennials — people ages 18-35 — with a mixture of English-language news and entertainment.

Eighteen months later, inside a gray 150,000 square-foot building in Doral, the network has yet to fully find its groove. On the plus side, Fusion’s reach has doubled, from 20 million homes at launch to nearly 40 million, thanks to distribution deal via DirecTV, Cablevision and U-Verse. In February, the website www.fusion.net went live as an online companion to the channel, delivering its cable offerings — along with lots of original content — to anyone within reach of a computer or cell phone.

Despite the growth, Fusion has leagues to go before it can be deemed a success. Much like MTV, the bastion of Generation X that revolutionized popular culture in the 1980s but today is scrambling to keep its dwindling audience, Fusion is struggling to seize the fragmented, short-span attention of its target demographic.

The cable network has made little impact outside of its flagship America with Jorge Ramos weekly news show, the Emmy-award winning anchor’s first English-language program. Despite Ramos’ recent coups — interviews with rapper Pitbull on potentially performing in Cuba and with GOP presidential hopeful Sen. Marco Rubio — the network’s ratings are so low that Nielsen doesn’t track them. In June, Variety published a poll conducted by the market research company Digitalsmiths that asked 3,000 people which channels they would be willing to pay for if given a choice to program their cable package a la carte. Fusion came in dead last.

And like many start-up businesses, Fusion is losing money. An SEC report filed by Univision in advance of its IPO offering later this year revealed that Fusion generated $28 million in revenue and spent $63 million, for a loss of $35 million, in 2014. In 2013, Fusion posted a net loss of $27.3 million, based on $3 million in revenue and $30.3 million in expenses.

In the disperse media world of cable channels, webcasts and website proliferation, Fusion’s struggle isn’t unique. A host of online newcomers are targeting millennials, among them mic.com, vocativ.com and ozy.com. All are overshadowed by established competitors such as vice.com and gawker.com, which drew double and triple the number of unique visitors in May to Fusion’s 1.9 million, according to traffic measurements by compete.com.

But some critics point to ongoing changes as a sign of undefined vision. Alexis Madrigal formerly of The Atlantic, for instance, was named editor in chief of Fusion’s news staff in April, deposing Jane Spencer, formerly of The Daily Beast and The Wall Street Journal, who had spent less than a year in the position. (Spencer now oversees Fusion’s emerging digital platforms).

Boris Gartner, Fusion’s Chief Strategy Officer, counters that Fusion is constantly changing and reinventing itself, the way a new multimedia company should.

“After 18 months, to be in nearly 40 million homes is an unprecedented success at this stage of lifecycle in cable television,” Gartner, 32, says. “One of the great advantages of building a brand new media company with corporate support is that you don’t have to overcome the baggage or the structure of the previous operation to do what you want to do. We are constantly reviewing the business, and if there’s something we want to launch tomorrow, we have the freedom to do it.”

Gartner also points to a study conducted in 2014 by Beta Research Corporation that asked 100 cable operators which emerging networks (less than 50 million subscribers) they were most interested in carrying. Fusion ranked Number One with large operators (more than 100,000 subscribers), edging out Sony Movie Channel, Fox Sports 2 and BBC World News.

Inside NewsPort, Fusion’s two-story headquarters built with the help of $11 million in tax credits and cash from Florida and Miami-Dade County, the mood remains lively and optimistic and energetic. The bottom floor is a vast open space lined with control rooms, editing suites and three large TV studios (for Fusion, Univision and WLTV 23). Over the course of the day, the lighting scheme reflecting on the walls gradually changes color, from purple to orange.

On the second floor, where the bulk of the Fusion staff works, the decor is plainer. The dress code is casual – lots of untucked, button-down shirts, jeans and sneakers – and the atmosphere is friendly and relaxed. Almost everyone on the staff of nearly 200 full-time employees looks to be in their 20s and 30s. On any given day, Chocolate, a brown Labrador belonging to Fusion CEO Isaac Lee, can be seen walking around the place and napping under cubicles.

Daniel Eilemberg, Fusion’s Chief Digital Officer and the founder of Mexico’s hugely successful news website Animal Politico, says the company’s young online profile, combined with its growing slate of television programming, is already reaching its target audience by focusing on the issues most important to them – social justice, diversity, pop culture, sports, lifestyle and sex. On any given day, the stories on the website run the gamut: The FBI’s dismantling of a hacker forum, how trans women are getting ahead in the adult webcam industry, the dangers faced by activists on a campaign to tear down Confederate flags, horror stories from the medical ward of a Texas immigration detention center and every single outfit Dionne (played by Stacey Dash) wore in the film Clueless. The network also creates stand-alone investigative reports such as the recent Miami Porn: Sex Work in the Sunshine State, about the local adult entertainment industry; Drug Wars, a look at international anti-narcotics operations, and the docu-series My Selfie Life, debuting in October.

“We think of it as a psychographic rather than a demographic,” Eilemberg says. “We are going after a sensibility that is hyper-connected and hyper-aware of what’s happening in the world, that is very digital savvy and consumes media through their cell phones. We’re also experimenting with things such as virtual reality worlds, which currently only attract tens of thousands but will eventually reach millions. We have a team that is building rigs in our digital lab with 16 cameras on them that will allow us to shoot in 360 degrees. The audience is not there yet, but we’re very bullish on them.”

Paul Sweeney, a media analyst for Bloomberg Intelligence, says Fusion’s biggest challenge is creating a business model that will satisfy its intended demographic.

“It’s a challenge for all news organizations to reach the younger demo and make money off of it, because they are used to getting all their content free, including news,” Sweeney says. “They’re approaching it from two attack points: The more frequented news website and a companion cable network. Launching a standalone cable channel today is really difficult, because there are so many out there already we don’t need another one. They’ve done a pretty decent job of driving traffic to their website, but they haven’t broken any big news that establishes them as a must-read, like Buzzfeed or Vice. They haven’t done anything that makes you think ‘I need to check into fusion every day.’ They might play a bigger role in this election cycle, because they have a big Hispanic audience.”

Sweeney says that for Fusion’s parent companies, this is an experimental investment.

“Most investors know that reaching millennials with a news product is a tough nut to crack. Univision’s investment in Fusion is another chip they are putting on the table to see how they can reach a younger audience that isn’t interested in telenovelas. These things take time to find a voice.”

With millions of dollars at stake, the question becomes one of time. How long will Fusion’s owners continue to invest in the endeavor? A network source close to the finances argues that although Fusion is still an “early stage business” as described in Univision’s SEC, the company is on track to be profitable by 2016.

And Fusion is not the only Univision property in the red. The same SEC report reveals that the English-language El Rey Network, which was launched in 2013 by filmmaker Robert Rodriguez in a joint deal with Univision that targets Latino viewers, generated $44.9 million in revenues and expenses of $109 million, resulting in a net loss of $72.3 million.

Although two of the nation’s biggest cable carriers, Comcast and Time Warner Cable, don’t offer the channel, Fusion executives say discussions are ongoing. The channel continues to garner new viewers through recent deals with Hulu, Apple TV, Spotify and even Delta Airlines, which will soon begin airing some Fusion shows as in-flight entertainment. And the channel’s digital platforms have done relatively well since their inception five months ago, garnering a total of nearly 5.8 million unique visitors to the website according to Google Analytics, 178,000 followers on Twitter, nearly 387,000 subscribers to its two Facebook pages and 23,000 followers on Instagram.

Aside from Ramos’ show, other regular programs include Come Here and Say That, a pop culture show hosted by Alicia Menendez, formerly of HuffPost Live; Soccer Gods, an irreverent sports show that “looks at revels and delights in the pomp of soccer” from a North American perspective; No, You Shut Up, a comedy newscast hosted by Mr. Show veteran Paul F. Tompkins that made Rolling Stone’s list of “10 Shows You Need To Be Watching in 2015”; and Nightline on Fusion, a partnership with ABC News co-hosted by Kimberly Brooks in Miami and Gio Benitez in New York. Debuting in October is Top Spin, featuring three teens in the world of competitive ping pong. The programs are repeated several times a week while new shows are being developed.

Ramos, the veteran TV journalist who has won eight Emmy awards and was one of the five people chosen to appear on the cover of the Time magazine issue “The World’s Most Influential People,” says he was happy to join the new venture while continuing to anchor Univision’s nightly news cast, which he has done since 1986.

“I’m 57 and I understood that I needed to reinvent myself,” he says. “At Univision, we often felt like we were in a parallel universe where no one was paying attention. I’ve interviewed every sitting president since George Herbert Bush. But the impact was limited to the Spanish-speaking community. It’s like we were talking to ourselves.

“Since I started doing Fusion, it’s been completely different,” he says. “I’m doing exactly the same thing – talking to presidents, covering Latin America and immigration issues – and the impact is immediate. It’s in English, it’s for a younger audience and Latinos are involved, so you would be crazy not to pay attention. People see and hear me now, whereas before, unless you were Latino, they didn’t. There’s no question that the future is here.”

Others are not as optimistic. Miguel Sarmiento, an independent news analyst and former regional editor for AOL Latin America and Spanish online supervisor for the Associated Press, says he watches Fusion regularly and is not impressed with the network’s output.

“It seems like every 10 years after the census bureau publishes its figures, corporations discover the Hispanic market all over again,” Sarmiento says. “These investments are betting on second and third generation Hispanics to become English-speaking. But language is not the issue. It’s the quality of the content. Fusion’s content is awful – not bad, but awful. They only have a few shows and they repeat them over and over. Their mission to reach such a fragmented market is not going to succeed. Despite some spikes they’ve had, it is going to fade. It all comes down to content, regardless of culture. People are going to watch once and then decide it’s not worth their time.”

Sarmiento’s chief criticism is what he describes as a “lack of creativity and vision.”

“There was a great program back in the 1970s called Que Pasa USA? that still airs in repeats on TV. To come up with a show like that requires creativity and bending the rules and a deep understanding of both cultures. It was highly successful because it didn’t insult English or Spanish cultures: It enriched them. It was well-versed on both sides, Anglo and Hispanic. I don’t see anything like that on Fusion right now.”

Some even wonder whether Fusion’s central concept is necessary. In a recent piece for Gawker, Leah Finnegan wrote “Why do millennials need their own news sites? They can’t read the big-kid papers? Are the fonts too small? Not enough Rihanna content? They don’t understand a news article if it doesn’t have the word “fleek” in it?”

But Ramos, for one, believes in Fusion’s mission – and he has 1.5 million Twitter followers to help spread the gospel.

“Everyone is talking about the future, but we have to talk about the present,” he says. “Everything is changing. Latinos used to be known as the sleeping giant, but not anymore. When you have 60 or 70 million turning out to vote, you can’t ignore that number. Every year, 50,000 more Latinos turn 18. Imagine the power we have. And then millennials – 85 million of them. Here we have two huge groups who will decide the future of this country. If you don’t take that into consideration – whether it’s television or politics or business – you will disappear.”

An earlier version of this story misstated the market penetration of El Rey Network in the U.S. According to representatives from Nielsen and parent company Univision, the channel currently reaches more than 40 million homes.

This story was originally published July 21, 2015 at 3:49 PM with the headline "Fusion’s cable programs, website have yet to explode."