HispanicBusiness

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."