Minority Report

This feature was originally published in the L.A. Screenings issue of World Screen.

 

For decades, the Hispanic population in the U.S. has been growing at a fast clip. Going from 22.4 million in 1990 to 46.9 million as of July 2008, the number of Hispanics has surpassed that of African-Americans, making them the largest ethnic minority in America, comprising 15 percent of the total population.

 

The economic and political prowess of Latinos in the U.S. can no longer be ignored. Mainstream advertisers have started targeting this group, whose purchasing power is on a powerful upward trajectory.

 

According to HispanTelligence, the market research division of Hispanic Business, the purchasing power of Hispanics amounted to some $870 billion in 2008 and is projected to reach $1.3 trillion by 2015. Income-producing Hispanic households are expected to represent 13.8 percent of the U.S. population by 2015.

 

During the 2009–10 television season, some 114.9 million U.S. homes had a TV set. According to Nielsen, the number of Hispanic TV households is at about 13 million.

 

Last, but certainly not least, 9.7 million Hispanics reported voting in the 2008 presidential election, helping to place Barack Obama in the White House (that was about 2 mil­lion more Latinos than voted in 2004). Although the recession has slowed the migration of Mexicans and other Latinos into the U.S., this year’s census is expected to reveal not only an even greater number of Hispanics, but clearer details about the demographics of this significant group.

 

“The census is going to be game-changing because it is going to manifest a view of this country that no one has ever seen before,” says Don Browne, the president of Telemundo Communications Group, which operates Telemundo, the second-largest Spanish-language broadcast network in the U.S. “It’s going to change a lot of perceptions and it’s going to really be a wake-up call that this country has changed and will continue to change in a dramatic way. Hispanics will be a force to be reckoned with in terms of their growing influence in government and growing economic power.”

 

Indeed, in an otherwise bleak economy, Hispanics represent one of the few areas of growth, especially for advertisers. 

 

“We’re at a tipping point, where brands are realizing that it is now a business imperative to market to Hispanics,” says César Conde, the president of Univision Networks, the leading Spanish-language broadcast group in the country. “Everyone is looking for untapped ways to grow their business, and the Hispanic consumer is one of the few bright spots in the marketplace. We also know from research that was conducted by Simmons in early 2007 that viewers of Spanish-language television are four times more likely to make a purchase decision based on advertising in Spanish than non-Hispanic viewers are to English-language television. Hispanics feel that those advertisers who speak to them in Spanish respect and understand them. It is vitally important for any marketer looking for sustainable growth to understand this and act on it.”

 

As a result of the new numbers that will be unveiled by the census, “there is going to be an enormous shift of meters placed in Hispanic homes, and there is going to be a dramatic growth in Hispanic media,” adds Telemundo’s Browne. “The big companies that are looking for the best and surest way to grow their business in the next two to five years are going to be totally energized and enlightened that this is the fastest, quickest way to grow.”

 

Nielsen will, in fact, adjust the numbers of homes it uses to mea­sure ratings according to the numbers revealed by the census. “The census will set new benchmarks,” says Doug Darfield, the senior VP of multicultural measurement for the Nielsen Company. “And the census is the best independent source that we can use to say that we are measuring the population on a lot of characteristics accurately and fairly.”

 

The census will undoubtedly confirm what Hispanic media insiders have known for years—that the Hispanic audience in the U.S. is constantly evolving. As new generations become acculturated, fully bilingual, and, just like their Anglo contemporaries, media savvy, they demand more than just telenovelas. They want programming on multiple platforms, unlike their parents or grandparents, who were accustomed to a two-network television universe.

 

The majority of the Hispanic TV audience automatically tunes in to Univision for novelas, news and football. Its ratings are so high that on any given night in prime time, Univision often comes in as the third or fourth most-watched broadcast network in the U.S., jumping past one of the major networks—CBS, ABC, NBC or FOX.

 

In fact, during the February Sweep period, Univision outperformed at least one of the English-language broadcast networks 21 out of 25 nights, or 84 percent of the time, among adults 18 to 34.

 

While Univision has been producing its own news, sports and entertainment programming, it has long been relying on Mexico’s Televisa and Venezuela’s Venevision for prime-time telenovelas and has deals with both companies till 2017. And while 2017 may still be a long way off, Univision has decided to start producing more of its own content.

 

“We announced [in December] the launch of Univision Studios, which marks the next phase in the evolution of Univision Communications,” says Conde. “The creation of an in-house studio builds on Univision’s original production capabilities in multiple genres, which account for over 4,000 hours of original programming annually across the company. Under Univision Studios, we will have enhanced capabilities to produce and co-produce telenovelas, reality shows, dramatic series and other programming formats, not only for our three television networks, but for our interactive platforms Univision.com and Univision Móvil as well.”

 

Although Univision remains dominant in the ratings, Telemundo has seen constant ratings growth for more than a year, thanks to its production of original novelas. Rather than acquire finished novelas from other countries, Telemundo has opted for producing its own and having the freedom to include product placement as well as topical news and social issues that are relevant to U.S. Hispanic viewers.

When Telemundo decided in 2004 to produce its entire prime-time schedule, it set in motion a strategy that has paid off in several ways.

 

“Our story is a story of reinvention, of dramatically changing a business model, and the facts speak for themselves,” says Browne. “We are delighted with our performance on all different platforms—broadcast, cable, international and digital—they are all performing extremely well and are being fueled by our original content. [Our novelas] are now in 104 countries and our international business, led by Marcos Santana, is growing by 20 percent a year. The idea of creating and owning your own content is that you have to evolve, you have to be able to grow your business on a multiplatform basis, and international is critical—it is a significant part of our revenue now.”

 

Numerous smaller TV services are trying to offer something different from the novela-news-and-sports programming menu available on Univision and Telemundo. Some have attracted attention from major international media companies.

 

V-me is a 24-hour digital-broadcast service, presented by some 40 affiliate public-TV stations and carried on cable and satellite. Currently available in more than 70 percent of all Hispanic homes, V-me’s household distribution is the third largest in the U.S., following Univision and Telemundo.

 

Last fall, PRISA—whose assets include a stake in the merged Telecinco and Cuatro group and Sogecable in Spain, as well as Portugal’s TVI—acquired a 12-­percent stake in V-me, with a view to taking majority control within 12 months. In addition to its cash investment, PRISA will contribute content and production resources to V-me.

 

“V-me was born three years ago to bring a very high degree of production values and to explore and grow areas of interest with the Hispanic market that still remain untapped,” says Carmen DiRienzo, the president and CEO of V-me.

 

“One of the reasons we are so excited to have PRISA as a strategic partner and owner is that they have an enormous amount of content of the highest caliber,” she adds. “We have the opportunity now to acquire, co-produce and produce, and look at their literary properties and integrate our plans for character development with them.”

 

V-me’s programming strategy, in fact, focuses on genres that are underrepresented on the main Hispanic networks. After a schedule revamp in March, V-me now offers contemporary Latin films and a movie-review show on Wednesdays, and has added a strip of dramatic fiction series at 11 p.m. that include crime, family and even mystery/paranormal dramas. Children’s, music and lifestyle programming round out V-me’s schedule.

 

DiRienzo explains that PRISA’s educational content, as well as its slate of movies, music and lifestyle shows, fit in perfectly with V-me’s mission. In addition, PRISA’s Internet and social-networking assets can help to substantially increase V-me’s digital businesses.

 

Mexicanal Network, a Mexico-­based channel launched in 2005 by Cablecom and Castalia Commun­ications, targets viewers in the U.S., Canada and Mexico. Its schedule features a range of Spanish-language content including news, culturally significant programs, sports and popular entertainment from public broadcasters, independent producers and local-access stations throughout Mexico.

 

“The tagline for MEXICANAL is, ‘Tu canal regional de México,’ so what viewers get from us is what perhaps they cannot from the other networks,” says Luis Torres-Bohl, the founder and president of Castalia. “[We] satisfy the news, information and entertainment needs of Mexicans living throughout the U.S., of which nine out of ten come from places other than Mexico City. So they don’t have any way of learning of what happened in Oaxaca or in Tuxtla Gutiérrez. We have that information, every single day, so we help them get in touch with their places of origin. Likewise, in Mexico we also provide news from Chicago, Los Angeles and New York about Mexicans who live and work in North America, and that is of interest to them.”

 

A targeted channel like MEXI­CANAL can provide advertisers special offerings. “Everybody nowadays in a tight economy is looking to optimize the expenditure of dollars to reach a certain consumer,” continues Torres-Bohl. “We are offering a very effective alternative in terms of CPM, that is very targeted for a community. For example, [leading up to] Mother’s Day, we can target Mexicans living in the U.S. who want to send money via many of the wire services—and several advertise with us—to their mothers. We have similar programs with the same advertisers for the Christmas holidays, so people can send gifts and money to their families in Mexico.”

 

Some of the most popular programs on Mexicanal are the daily show Te levanta, which includes nutrition and lifestyle advice for women, and the boxing shows Cuadrilátero and Fábrica de campeones. The channel also airs baseball as opposed to football because, as Torres-Bohl explains, baseball brings the family together.

 

Family viewing is still a very important social activity among Hispanics, says Adrian Steckel, the CEO of Azteca América. “People will come together to watch television, it’s not everyone watching their own TV in separate rooms. Hispanics have a much more emotional connection with their networks. They are not watching programs, they are watching networks, and they have feelings for the network and it serves a purpose in their lives. When you look at English-language networks, people watch individual programs, such as Lost or 24. Anglos have lost the connection with what CBS or NBC means in their lives—they are hopping around from one network to another.”

 

Azteca América operates in 69 markets in the U.S. and will soon reach 71, in addition to its carriage on cable, satellite, Internet and mobile platforms. The service has access to the programming from TV Azteca’s three national networks in Mexico, including a library of more than 200,000 hours of original programming and news from local bureaus in 32 Mexican states.

 

“We have complemented what TV Azteca offers with shows that are geared to the U.S. audience and produced especially for Azteca América,” says Steckel. These programs include the talk show Laura de todos, sin miedo a la verdad with the popular host Laura Bozzo.

 

“We do not program novelas against Univision’s novelas,” says Bob Turner, the president of network sales for Azteca América. “We’ve had success airing variety and news programming to counter the novelas on Univision.” This program strategy, along with the channel’s continuous growth in distribution, has paid off. “Our ad revenues were up 6 percent in 2009 over 2008, despite the worst economy in decades,” says Turner. “And this year is even better; we had the best first quarter in our history.”

 

Cable channels are also offering Hispanic viewers alternatives to what they can find on the main Spanish-language broadcast networks. If men are well served by ESPN Deportes and Fox Sports en Español, Discovery Familia offers several alternative genres for female viewers.

 

“Discovery Familia offers Latina women a high-quality alternative that is different from what they can find on other channels, which is basically telenovelas and talk shows,” explains Luis Silberwasser, the international head of content for Discovery Networks International.

 

“Discovery Familia’s programming includes a daytime block of programming for children that is completely in Spanish and offers unique learning experiences,” continues Silberwasser. “Mothers can be sure their children are in a safe environment where they can have fun, learn, and maintain their Spanish fluency. During the evening we offer programming dedicated to Hispanic women and families, with shows about travel, lifestyle, beauty, child care, homes and decoration—all shows that are really different from other TV offerings in the U.S. Hispanic market.

 

Also targeting Hispanic viewers is Discovery en Español, which offers a window on the world through science, technology, history, nature and wildlife programming.

 

If, as expected, the census offers detailed information about the growing niches within the Hispanic population, cable and digital programmers may have more audiences to target.

 

“We are having conversations with a lot of cable and satellite channels about the possibility of providing some measurement so they can start presenting themselves to advertisers and open up the ad stream,” says Nielsen’s Darfield. “Certainly at this point in time, [cable and satellite channels’] collective share of the viewing [audience] is larger by many orders of magnitude than the share of the ad dollars that they are taking in. The question is, Who can find the model that brings content to market in a way that makes sense to advertisers?”

 

Whatever numbers the census reveals, there is no doubt but that the U.S Hispanic market holds countless opportunities for networks, programmers and advertisers alike.