HispanicBusiness

In the latest of an exclusive HispanicBusiness.com feature, "Conversations," Alex Ryshawy, research director of Mission Capital Group, talks with Luis J. Echarte, chairman of Los Angeles-based media company Azteca America, a wholly owned subsidiary of Mexico's TV Azteca.

Q. What is your current view of the U.S. Hispanic TV market?
A. We are very optimistic its growth potential. We believe the market has nowhere to go but up, and that it will continue to outpace the performance of the general TV market. The main reason is that while Hispanic-focused advertising continues to rise, it still lags the growing spending power of the community. Hispanics account for 8 percent of total consumption in this country – but less than 2 percent of total advertising spending is allocated to this demographic.

Meanwhile, at Azteca, we're continuously improving our performance. We recently scored a major ratings coup with the Mexican Soccer league final (aired live on May 27). Although the U.S. is still not considered a "soccer nation," the Mexican Soccer League is changing things. Among male audiences aged 18-34, the Pachuca vs. America final match, which ran exclusively on Azteca, notably beat out many national U.S. pastimes – including the NBA Western Conference Finals, NASCAR, the Indy 500 and Major League Baseball on ABC and FOX.

Azteca's Mexican soccer coverage dwarfs that of other U.S. Hispanic networks. We air half of all the games, the equivalent of all the games that the next three networks show combined (Univision, Telefutura and Telemundo).

Q. What is Azteca America's market positioning?
A. We finally reached network status (as measured by Nielsen) last year, and are now viewed as the fourth major Hispanic broadcast TV network in this country, after Univision, Telemundo and Telefutura. At present, we have an approximate 5 percent share of the U.S. Hispanic TV ad market, and our goal is to reach 15 percent to 20 percent by 2012. In the next few years, we expect to benefit from overall market growth – the U.S. Hispanic TV ad market is expanding by approximately 10 to 15 percent annually – as well as from increasing market share.

Although many smaller cable and regional TV networks have seen significant growth, their limited market coverage and programming limitations prevent them from competing directly with the major broadcasters, especially when it comes to attracting blue-chip advertisers. It's expensive to provide quality programming on a 24-hour basis. Luckily, we're able to tap the large inventory of high-quality programming from our parent company in Mexico. TV Azteca invests about $300 million each year to produce 14,000 hours of programming, which lends us a strong advantage as we look to compete in the U.S.

The good news is that the Hispanic TV market is growing strongly overall, which benefits all the players, both large and small.

Q. How has the market responded to having a new Hispanic TV network?
A. At the beginning, we knocked on a lot of doors and spoke to many different advertisers and agencies to introduce them to our product. Since then, advertisers have been interested in speaking with us, simply because we offer more variety and options when it comes to placing their ads. We measure our success by the network's large and growing number of repeat clients – customers that have had a positive experience advertising with us and that are coming back.

The fact that Nielsen boosted us to national network status has also been very positive, and opened up new doors to many clients that required national coverage before they could advertise on our network.