Business Monday

Spanish or English? The dilemma of the booming Hispanic TV market

Cesar Conde, president of Univision Networks, is photographed inside the set of 'Despierta America' on June 4, 2013 at Univision Studios in Doral, Florida.
Cesar Conde, president of Univision Networks, is photographed inside the set of 'Despierta America' on June 4, 2013 at Univision Studios in Doral, Florida. MIAMI HERALD STAFF

In the western reaches of Miami-Dade County, the two powerhouses of American Hispanic TV have been working at full swing since dawn.

At the Univision studios in Doral, the five hosts of Despierta América (Wake Up America ) are throwing their daily four-hour party. The show kicks off at 7 a.m., defying drowsiness with raucous skits, musical performances and celebrity guests. The format is increasingly popular; the show’s audience — almost 900,000 viewers — grew 22 percent from last season to the current one, according to ratings company Nielsen.

This studio is also home to two other live Univision blockbusters. In the evenings, veteran variety show El Gordo y la Flaca (The Fat Guy and The Skinny Lady) plays to an average of 1.4 million viewers. Sábado Gigante (Giant Saturday), the longest-running TV show in any language dating from 1962 —is followed by 2.2 million people.

Three miles away, at the Hialeah studios of Telemundo, telenovelas are the stars. Dozens of extras wait in line to take part in a restaurant scene for Marido en Alquiler (Husband for Hire), while Mexican celebrity actress Ana Layevska is spotted on her way to the stage of Dama y Obrero (Lady and Worker).

Telemundo Media executives like to call this 175,000 square foot facility with five stages the “Hispanic Hollywood.” In 2005, the network, owned by NBC, made the decision to produce its own prime-time soap operas instead of buying them from third parties. That strategy, too, is paying off. In the 2012-13 season, Telemundo audience increased 9 percent vs. the 2011-2012 season, averaging more than 1.3 million viewers during primetime programming, according to Nielsen.

Since the 1980s, the two networks — based in Miami — have been the dominant players in U.S.-based Spanish-language broadcast, battling for the top positions (currently held by Univision.) And with the U.S. Hispanic population projected to double from 53.3 million in 2012 to 128.8 million in 2060, or one-in-three Americans, according to the U.S. Census Bureau, advertising revenue is expected to far exceed the $6.3 billion currently spent on advertising to Hispanics.

The predicted burst has kicked up the stakes, pushing players like Time Warner and News Corp into the field with the introduction, respectively, of CNN Latino and MundoFox. Meanwhile, Univision and Telemundo have refocused their strategies to be sure they retain — and even grow — their market share.

Both stalwart networks will continue to rely on telenovelas and live variety shows as programming staples. But the two networks are aiming at different targets in one key aspect: language.

Late this year, Univision plans to launch Fusion, a news and lifestyle cable network aimed at English-dominant Hispanics. The new channel is the result of a multimillion-dollar joint venture with ABC, the Disney-owned broadcaster, and will be headquartered in Doral.

Telemundo, owned by NBC Universal, plans to focus its efforts on the Spanish-speaking world, both in the U.S. and countries to the south.

Driving both decisions are demographic shifts and consumer habits.

Trends and habits

At first glance, Univision’s strategy seems to fly in the face of recent trends. Advertising spending on Spanish-language TV increased 13.5 percent in the first quarter of 2013, its seventh consecutive quarter of double-digit growth, according to Kantar Media, the leading provider of strategic advertising information. By contrast, spending in English-language TV networks declined 5.2 percent, the result of weaker ratings.

But Univision executives also are looking at data indicating that births — not immigration — have spurred the growth of the Hispanic community (though a recent Census report suggests that may be changing.). And according to research, second and third generation Hispanics watch more television in English than in Spanish.

Sitting at his Doral office in view of a wall of TV monitors, Univision Networks President Cesar Conde talks about Univision’s “unprecedented growing spurt.” In the past three years, his group has expanded from three television networks to 12. All are in Spanish.

As both viewers and advertisers sought a wider range of content, Univision has launched the 24-hour cable channels Univision Deportes for sports, Univision tlnovelas, devoted to telenovelas, and Foro Tv, offering news and information.

The strategy is working. Among some demographic groups, Univision has been edging out some of the English-language networks during specific periods; in July it is set to finish first of all networks during primetime with the all-important audience of adults 18-49. Galavision is now the No. 1 Spanish-language cable network, according to Nielsen.

Still, Univision has felt that it was important to serve Hispanics who prefer to consume culturally relevant content in English, Conde says — in the early 2000s, Galavision experimented with English-language programs, but reverted to fully Spanish-language content. “Fusion is a pioneering initiative and groundbreaking on many fronts”.

Though the Fusion network will target English-dominant Hispanics, Conde is betting non Hispanics will also want to watch it. “In the year 2013, the demographic change is having such prevalent impact across this country that now the Latino community is no longer a niche,’’ said Conde. “It is part of the mainstream and the non-Latinos also want to understand the passions and topics that interest this community.”

Discussions with ABC started in late 2011, and the announcement of the new network came in May 2012. An embryonic team of journalists have been running a website for more than a year. Though details about programming, investment dollars and personnel have not been released, documents filed with Miami-Dade County project a payroll of about 350 people within five years and a start-up investment of about $275 million. The channel’s operations will be located near Univision’s current Doral headquarters, at a 150,000 square foot facility being built at 8551 NW 30th Terr.

A second English-language network, El Rey, will be launched in 2014 in partnership with filmmaker Robert Rodriguez, featuring general entertainment and aimed at young Hispanic millenials. Univision will be responsible for its back-office operations, sales and distribution.

The announcement of Fusion has generated high expectations. Efforts to engage the English-dominant Hispanic audience have been disappointing so far, according to media buyers, but many attributed those flops to timing.

Daisy Exposito, the CEO of N.Y.-based ad agency Daisy Expósito-Ulla, believes that the moment is ripe.

“Univision and ABC have come to the realization that the English-preferred segment of the market is starting to represent a significant number that can no longer be ignored by the media. As is always the case with media distribution, if demand is there, then supply must follow,’’ she says.

Isabella Sanchez, vice president of media integration of Miami-based Zubi Advertising, thinks she may be right. “On behalf of our clients we are constantly seeking additional opportunities to reach Hispanics, regardless of language,” pointing to magazines like Hispanic Business, Vista and Latina, and news websites like FoxNewsLatino and NBCLatino.

“They were all designed with the same mission that Fusion has now; providing culturally relevant content for Hispanics in English,’’ says Sanchez.

Not everyone is so confident.

Mark Lopez, associate director with the Pew Hispanic Center, says that while Hispanic population growth is driven by U.S.-born Hispanics, who consume more TV content in English, a 2009 Pew survey found that 60 percent of young Latinos say their parents often encouraged them to speak Spanish, while 47 percent of older Latinos who say the same.

Meanwhile, down the street, Telemundo is pursuing a different strategy.

In 2001, Telemundo too went after the English-language market with Mun2, a cable channel aimed at young Latinos. The channel’s lineup features 40 percent English content, among them its most popular show, I love Jenni, a reality series subtitled in Spanish about the life of late Mexican-American singer Jenni Rivera.

But Telemundo Media executives say that Mun2 and Fusion are aimed at different audiences. Mun2 is designed for a young demographic, while Fusion’s content is intended to be more broad-ranging.

Telemundo Media President Emilio Romano is clear that Telemundo´s domain is Spanish-language programming

“We consider that the Hispanic community once they are comfortable to be entertained and informed in English are looking for the best content possible, regardless of the content being Hispanic or not.’’

Once Hispanics are fluent in English, the content they seek is the same as other English-speaking viewers, he says. “I have not seen a media company that has successfully created a powerful content offering to entertain and inform Hispanics in English.”

In the Telemundo world, English-language content belongs to its parent company, NBC Universal. Accordingly, Telemundo has its sights on the 500 million Spanish speakers worldwide. “We are determined to be the best Spanish language media company in the U.S. and the No. 1 producer and distributor of Spanish language content for the world,” Romano said.

That second strategy could be the key.

In 2005, Telemundo decided to focus investment on producing its own telenovelas — shows that it then distributes to networks worldwide. Currently its telenovelas are seen in more than 100 countries and translated to more than 35 languages. Its most successful telenovela, La Reina del Sur (The Queen of the South), featuring a female drug dealer, competed favorably with English-language networks. Its finale, on May 30, 2011, averaged nearly 4.2 million total U.S. viewers, ranking No. 2 for the time spot that night behind ABC’s Extreme Makeover — Weight Loss Edition in the key 18-49 demographic, according to Nielsen. The telenovela was also a hit in Spain and many Latin American countries.

Today Telemundo is the No. 1 producer of Spanish-language prime-time original content in the U.S. Most of that work happens here in South Florida; last year alone, Telemundo increased the shows it produces in Miami by 50 percent.

One factor in making Telemundo’s strategy is its syndication arrangements, which covers half the cost of production.

While walking through the main studios, Romano, president of Telemundo Media since October 2011, is peppered with stories of success.

Layevksa, the star just arrived from Mexico, tells him journalists there are raving about the network’s telenovelas.

Guilherme Bokel, executive director of Brazil’s Globo network, praises the first episode of Marido de Alquiler, a remake of Brazilian telenovela Fina Estampa. The production partnership with Globo, the largest media group in Latin America by revenues, is considered a coup.

Other smaller players in the Hispanic TV market also bet on Spanish.

“We’re firmly convinced that Spanish language programming is the best way to appeal to U.S. Latinos,’’ says Daniel McCosh, a spokesman for Grupo Salinas, owner of California-based Azteca America.

That is also the view of CNN, which in June announced the expansion of its Spanish-language broadcast network, CNN Latino, to Miami in an effort to create a national Spanish-language network through affiliation agreements with stations in local markets.

“We found that young Hispanics who were raised in the U.S. preferred to be informed in their native tongue or their parent’s native tongue in regards to issues that English media outlets did not touch upon,’’ says Eduardo Suarez, vice president of Programming for CNN en Español.

But the success of Fusion or El Rey could change the landscape, some analysts believe. If Fusion is successful, other players will follow suit, says Exposito. But the transition will take time. “As the saying goes, “Rome was not built in a day,” she adds.

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