Riding the Latino demo wave

U.S. pay TV sector gambles on Hispanic buying power

MIAMI — In the frenzy of the broadcast upfront presentations last week, Univision and Telemundo loudly proclaimed the increasing size and strength of the U.S. Hispanic market in their bid for a bigger slice of the TV ad pie.

Riding the same demowave, albeit more quietly, pay TV programmers are increasingly focused on this market segment, too, with improved distribution as cable and satellite providers introduce and expand Spanish-language packages, and with the launch of new channels.

Latinos, currently 13% of U.S. residents, are the fastest-growing segment of the population, skewing young and with money to spend. Collective Hispanic buying power exceeds $700 billion.

And with pay TV penetration at around 71% among Hispanic homes, compared with 85% in the general market, there is plenty of room to expand.

“The demographic evidence is overwhelming and the country’s media need to reflect the changes in the population,” says Traug Keller, senior VP of ESPN Deportes, which went from a programming block to 24-hour net in early 2004. Mark Feldman, prexy and CEO of TuTv — a joint venture of Univision and Mexico’s Televisa that distributes three music nets and two film nets in the U.S., all programmed by Televisa — says cable operators are embracing Spanish-language options as an avenue for growth.

“The earliest entrants were the satellite providers — EchoStar and DirecTV,” he adds.

Programming execs note the geographic concentration of U.S. Hispanics means they and the providers can concentrate their efforts in a few select cities where they get the biggest bang for their buck.

“Nationally, Hispanics are 13% of the population. In Los Angeles, they’re 40%,” observes Lucia Ballas-Traynor, who was recently tapped senior veep and general manager of MTV Espanol and VHUno, a newly created position.

And the bet is that ad dollars will follow.

“The ratings are either unmeasureable or tiny, but the potential is great based on compelling content and future growth of cable,” says Marla Skiko, a media director at Tapestry, a division of Starcom MediaVest.

Pay TV reps “alternatives to reach a specific strategic Hispanic groups. They also offer value beyond spots in that they allow for a variety of branding opportunities in-program,” she says.

The range of Spanish feevee options is wide and includes CNN en Espanol, Fox Sports en Espanol, Univision’s Galavision and Telemundo’s mun2 as well as Colombia’s Caracol TV and Argentina’s Telefe Intl., which target smaller immigrant communities.

And there are more coming. English-language, Latino-oriented nets are throwing their hats in the ring like SiTV and the upcoming Voy.

In June, Discovery will add two Spanish-lingo nets. It launched Discovery en Espanol in 1998, airing a best-of program combo from all its nets. Going forward, it will be more akin to the flagship Discovery net, culling from U.S., Latin American and international efforts, complemented by the femme-oriented Viajar y Vivir (Travel and Living) and Discovery Kids en Espanol.

With no distrib accords yet in place, “this is a long-term play,” acknowledges Luis Silberwasser VP of Discovery’s new U.S. Hispanic Network Pearl Group. “We are where the general market was 20 years ago.”

Looking to boost its own pay TV efforts, Telemundo wooed Antoinette Zel from the top job at MTV Networks Latin America to become exec VP of cable networks and strategic planning at Telemundo (distribution is handled by NBC U’s pay TV division). Zel’s been cleaning house and adding staff.

She’s focused on the youth market, which she believes is underserved.

“The median age of the second Hispanic generation, according to the census, is 13,” Zel notes.

In order to reach that youthful demo, “we’re moving to originally produced programming,” she says.