HispanicBusiness

Combined with Univision, which reaches roughly 85 percent of U.S. Spanish-speaking viewers, and newly reborn Telemundo (see “Ratings Rebound,” July/August 2000), the Spanish-language television sector has suddenly become crowded.

On one hand, the market’s expansion is explainable from an investment perspective. In the last year, Hispanic media companies of all types have become Wall Street favorites (“The New Moneymakers,” page XX). But that’s not to say birthing another Spanish-language TV network is necessarily the stuff of sound business strategy – particularly when established competitors Univision and, to a lesser extent, Telemundo enjoy a virtual stranglehold on the market.

According to David Acosta, a Hispanic media specialist with The Arenas Group, a Los Angeles-based marketing agency, the Spanish-language television sector has begun to show signs of plateauing.

“In the last year, for the first time that I can remember, I’ve noticed viewing and listening levels in Spanish-language media dropping off. It’s probably not the best environment to be launching a network in,” he says.

Harry J. Pappas looks at the same market and sees opportunity. The chairman and CEO of Azteca America is pegging his network’s hopes for success on the very demographic that’s thought to prefer English-language television. Azteca’s plans call for interview shows, sports, and urban-themed telenovelas, all in an effort to capture the attention of younger Hispanics.

Mr. Pappas might do well to consider Telemundo’s recent experience, however. The nation’s second-leading Spanish-language TV broadcaster saw its audience share plummet two years ago as a result of a programming strategy weighted heavily toward younger viewers. It wasn’t until the network returned to traditional telenovelas that its fortunes dramatically improved.

“Telemundo tried shows [U.S.-style comedies and dramas] that it thought would appeal to younger Hispanics, and it failed relative to its traditional programming. That’s why the network has gone back to telenovelas,” says Chon Noriega, an associate professor in UCLA’s Department of Film and Television.

Moreover, Mexico’s TV Azteca, which will provide Azteca America’s programming, has a mixed record with regard to attracting adolescent and young adult viewers. Though uniformly well received in Mexico, some of the company’s edgy, youth-oriented telenovelas have performed poorly for Telemundo, all but forcing the latter network to seek out other foreign suppliers.

Like their parents, younger U.S. Hispanics enjoy watching telenovelas, according to Daisy Exposito-Ulla, president and chief creative officer of The Bravo Group in New York and president of the Association of Hispanic Advertising Agencies. And, she says, advertisers know it.

“Hispanic youth today who are English-proficient are in tune with their roots, and so they’re basically bicultural in terms of viewing habits,” says Ms. Exposito-Ulla.

The Bravo Group cites Nielsen Hispanic Television Index data indicating that the top 33 shows among Hispanics age 18 to 24 are on Univision. However, Nielsen’s Hispanic Index routinely skews toward TV viewers who predominantly speak Spanish. Univision and Telemundo, in fact, provide the index’s main funding.

In other words, Univision and Telemundo make a point of catering to the nation’s large Spanish-speaking immigrant population – despite the fact that U.S.-born Hispanics present an increasingly affluent market. Indications are that Azteca America and HTVN will adopt the same approach.

It’s generally accepted in the industry that young Hispanics who are bilingual or speak English exclusively opt for general-market programs such as “Buffy the Vampire Slayer” over Univision telenovelas, even if, as Mr. Acosta and others acknowledge, measuring Hispanic viewing habits according to language preference remains a “murky” science.

BBDO’s annual Report of Latino Viewing of Network TV is probably the most reliable source on the subject. The last such report made public (1999) indicated that Hispanics age 18 to 24 preferred the now-defunct programs “Beverly Hills, 90210,” “Party of Five,” and “Seinfeld.” BBDO senior vice-president Doug Alligood says subsequent studies that have yet to be released show young Hispanics favoring similar programming.

Perhaps mindful of such data, Univision and Telemundo have begun experimenting with U.S.-style sitcoms. In Telemundo’s case, “¡Viva Vegas!” marks a return of sorts to the network’s disastrous 1998 strategy that sought to de-emphasize the vaunted telenovela format.

At the very least, says Mr. Acosta, the fact that many younger Hispanics divide their viewing time between English- and Spanish-language TV points up a failure on the part of the television industry as a whole to devise programming to their liking. And with network television viewing continuing to decline, they are an audience the industry can ill afford to alienate.

“Hispanic teens watch more English-language TV than they do Spanish-language TV, but it’s important to understand that nobody has been able to attract this audience. These teens are tough to reach everywhere,” he says.

Hispanics age 18 to 24 are an attractive audience by virtue of their economic clout. They wielded more than $10 billion in purchasing power last year, and the figure is expected to exceed $18 billion by 2020. According to BBDO’s Mr. Alligood, they account for 11 percent of all U.S. Hispanic television viewers.

As Disney recently discovered, misjudging their tastes in media can be costly. The entertainment conglomerate attempted to lure Hispanics in the Los Angeles area with a dubbed version of its animated movie The Emperor’s New Groove, only to see them ignore it in favor of the English one.

Producers of English-language TV content geared toward younger Hispanics are encouraged by such trends.

“The message we’re getting from the agencies is that they’re particularly excited – first, because we’re reaching the youth market, and second, because this is the future trend of the Hispanic TV audience,” says Leo Perez, chief operating officer at SiTV, whose cable operation is expected to launch later this year.

Says Federico Subervi, a communications professor at the University of Texas at Austin: “We absolutely need more English-language programs for Hispanics, especially young Hispanics. We’ve been saying it for years, but nobody seems to listen.”