News Column

Telemundo's Ratings Rebound. How far can it go?

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By Tim Dougherty

September 2000 - Ah, the television business. One year your network's down, the next it's up. Or in Telemundo's case, one year you're lampooned as Spanish-language TV's incredible shrinking broadcaster, the next you're miraculously reborn as a respectable also-ran behind behemoth Univision.

Jim McNamara has been in the industry long enough to know that network fortunes can change quickly, often inexplicably – which is why he's loath to put too much of a personal spin on the astonishing ratings growth he's presided over since becoming Telemundo's president and CEO last summer.

"I would love to take full credit for everything, but the bottom line is I stepped into a situation that was probably exaggerated on the down side, and I've received the full benefit of the growth," says Mr. McNamara, formerly the president of Universal Television Enterprises and CEO of New World Entertainment.

If he were so inclined, Mr. McNamara would have plenty to brag about. During his brief tenure, Telemundo's ratings have increased dramatically, more than 100 percent in some time slots, according to Nielsen Media Research. Moreover, the turnaround is largely his doing, owing much to his programming strategy involving telenovelas, the wildly popular nighttime soap operas that have been a staple of Spanish-language TV for decades, but which Telemundo swore off as recently as last year.

"Our audience likes novelas. So when the network said a few years ago that it was getting out of the novela business, it alienated a large chunk of the audience. My philosophy is, don't fight it. They want it, let's give them what they want. If novelas is what they want, give them novelas," he says.

The network is doing just that. Telemundo's fall lineup includes four new telenovelas: "Betty, La Fea," "Amor Sin Limite," "Terra Nostra," and "La Fuerza del Deseo." Two of these will replace current offerings "Muñeca Brava" and the surprisingly popular costume drama "Xica," both of which are scheduled to conclude in the fall. (Unlike American daytime soap operas, which typically run for years, telenovelas end after a few months. They invariably finish in storybook fashion, with villains getting their just due and the heroine being swept off her feet.)

"Xica," in particular, has performed in a big way for the network. A saucy account of a courtesan and former slave, set in 19th-century Brazil, it originally aired in that country in 1997. Dubbed in Spanish, it's become an improbable ratings bonanza for Telemundo heading into the new season.

"It wasn't a surprise to me. I knew it was a great novela, and when it comes to acquisitions I go with the proven stuff. I look at how it did in Peru, Ecuador, Colombia, Venezuela, the Dominican Republic, Puerto Rico. If it shattered records in every one of those places … it's probably going to work here. In the same way, if it doesn't work anywhere in Latin America, then it's probably not going to work here," says Mr. McNamara.

This regional acquisition perspective is new to Telemundo. In the past the network has relied on Mexico's second-largest television broadcaster, TV Azteca, to supply telenovelas, much as Univision relies on Televisa (see "A Broadcaster Without Rival," May). All of its new novelas, however, are from other producers. "Terra Nostra" was acquired from Brazil's Globo TV Network, and "Betty, La Fea" was imported from Colombia, for example. "Xica" was produced by Venezuela's Venevision.

Saying he's been somewhat disappointed in the way recent TV Azteca offerings have performed, Mr. McNamara says Telemundo will rely less on its traditional novela supplier in the future. The network recently entered into a development and consulting agreement with successful Venezuelan novela producer Laura Viscontti Productions.

In a bid to reduce its dependence on foreign suppliers, Telemundo is getting into novela production of its own. The network is co-producing, with Columbia Tri-Star, a novela at its Mexico studios that will air either late this year or early next, according to Mr. McNamara.

"We're relieved they're returning to telenovelas," says Laura Marella, vice-president and media director of Casanova Pendrill Publicidad, based in Irvine, California, which handles Hispanic media buying for GM, Coors, Home Depot, and others.

"People who have been in the business a long time were nervous about their abandoning telenovelas in primetime, because it's part of our culture. We're very, very encouraged, very pleased with the progress."

Telemundo's successful re-adoption of the novela format contrasts sharply with recent programming debacles that included poorly received remakes of "Charlie's Angels" and "Starsky and Hutch." Mr. McNamara's predecessor, Peter Tortorici, ultimately lost his job over such failures. Former entertainment president Nely Galan, who declined to relocate from Santa Monica, California, to Telemundo's new headquarters in Miami for personal reasons, continues to produce shows for the network, however, including the hit "Los Beltran" and the new comedy "Viva Vegas."

"Last year they tried a bunch of sitcoms, but the humor really wasn't relevant to our market, so the shows didn't work," says Ingrid Otero-Smart, president and chief operating officer of Mendoza, Dillon & Asociados, whose Hispanic media buying clients include Kraft, Mission Foods, and Nabisco. She says most of her clients are increasing their investment in Telemundo precisely because it's returned to airing telenovelas.

Telemundo's newfound ratings success has enabled the network to build audience share through on-air promotions – the cheapest form of advertising available to television networks. The question is, will this momentum translate to success for its new fall lineup?

Aside from the new telenovelas, the network will debut a Saturday-night game show, "Numeros Rojos," a "Good Morning America"-style news and information program called "Buenos Dias," a late-night variety talk show, "A Oscuras pero Encendidos," and the World Wrestling Federation, which Ms. Otero-Smart believes could become a ratings blockbuster. Telemundo also is ending its practice of running paid programming.

Mr. McNamara admits that the most difficult ratings gains likely lie ahead. He points out that Telemundo is as much battling viewing habits that Univision has methodically inculcated over a number of years as it is trying to attract new audience members. Still, he's encouraged by his network's steady progress.

"We're slowly but surely chipping away, and I see good prospects for continued growth, especially now that we're going to a full 24-hour network and getting rid of the paid programming, which just kills you from an audience flow standpoint," he says.

For all the talk of ratings success at Telemundo, the network remains far behind Univision in terms of market share. This year, Telemundo has a 22 share compared to Univision's 78, according to Nielsen data. It's done slightly better among adults ages 18 to 49, garnering a 26 share of that highly coveted demographic in May, for instance.

Ms. Marella says it's important to maintain a historical perspective when assessing the network's prospects for continued growth.

"You have to remember that Telemundo used to be a very strong competitor. People always perceive them as being a distant second. It took them four years to decline to the point they were last year, and it will probably take that long to get back to where they were," she says.

Echoes Ms. Otero-Smart: "I've been in the business 13 years, and it used to be 60-40, with Telemundo running a strong second. Will Telemundo come to challenge Univision? I think they will, but it's not going to happen overnight. If they continue this strategy, they're definitely going to give Univision a run for their money."

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