It’s been a year and a month since he was upped to prexy of No. 2 U.S. Hispanic net Telemundo, and Don Browne has a few good reasons to be content.
The NBC Universal unit, which has been plowing tens of millions of dollars into original production since September 2003, has been seeing some returns both here and abroad. From its studios in Colombia, Miami and, soon, Mexico, Telemundo churns out 20,000 hours of programming, making it the second-largest producer of Spanish-language programming after Mexican media giant Televisa.
International sales have taken off, with some of its original novelas now ratings hits in territories including Spain, Colombia and Venezuela. Back home, the company has seen nearly eight months of steady ratings growth.
Last month, Telemundo posted its strongest April performance ever, reporting a 42% gain over the previous year in adults 18-49 and a 64% rise over the same month last year among adults 18-34.
“These results continue to confirm a clear cause-and-effect relationship between our development, production and programming strategy and what our viewers want,” says Browne.
Once he took over the reins from Jim McNamara, Browne, who had been Telemundo’s chief operating officer for two years, quickly shook up the web.
Barely two months in, he restructured the executive ranks, placing industry vets and longtime collaborators Patricio Wills and Marcos Santana firmly in charge of production and development, respectively. Browne also announced a realignment of responsibilities among senior management in network programming, sports, news and network strategy.
He expanded Antoinette Zel’s responsibilities from pay TV strategy to her current position as senior exec VP of network strategy. The former MTV exec has been revitalizing Telemundo’s youth-skewed sibling web Mun2.
“Upon joining Telemundo, we were at a 2.1 rating in (Hispanic) adults 18-49, and in only six months after collaborating our efforts, we were able to obtain a 3.8 rating in March (weekday primetime),” says Santana, who also heads Tepuy, distrib of Telemundo’s and other product.
Browne feels the network is now primed to start growing at a faster clip. “We have changed the architecture of the company,” he says.
That Telemundo has shown consistent growth nearly throughout the year will help going into the upfront. Among its strongest selling points: It’s providing relevant content specifically created for all U.S. Hispanics.
“In every telenovela, we try to weave in socially important themes, including education, health care, immigration and literacy,” says Browne.
Producing its own content has also enabled Telemundo to better integrate TV and the Web. Telemundo and Yahoo! en Espanol have just joined forces on the Internet, merging staff to jointly operate a site to serve U.S. Hispanic auds.
However, the company continues to face challenges in its struggle to close the gap with market leader Univision, whose primetime ratings are driven by Televisa fare. Telemundo controls an average 25% share of Spanish-language auds, while Univision and sister net Telefutura together command the rest of the market.
Last year’s upfront for Spanish-language broadcast TV totaled about $1.2 billion: $900 million for Univision and Telefutura, $300 million for Telemundo.
Spanish-language nets, which capture about half of the top 300 advertisers, are expected to see a 5% growth in ad revs this year, according to Teddy Hayes, VP of media services at Los Angeles-based ad agency Orci & Associates.
“Spanish-language TV may have seen a 2005 surge in audience growth, but ad revenues have increased only 4%-5% per annum,” says analyst Phil Remek of Guzman & Co.
This year marks the first time Telemundo and Univision/Telefutura are included in the Nielsens. Since early this year, advertisers have been able to compare the webs’ ratings side-by-side with their English-speaking competition. Previously, advertisers and agencies were unable to look at the Spanish broadcasters’ data unless they subscribed to Nielsen’s National Hispanic Television Index (NHTI). Univision joined the Nielsens in December, while Telemundo came aboard Feb. 1. Telefutura joined the NTI on Feb. 27.
Meanwhile, Azteca America, the U.S. web of No. 2 Mexican network Azteca, continues to sell itself as the fastest-growing Hispanic net. The three-year-old web has grown to 45 stations, reaching 83% of the U.S. Hispanic market, says Azteca America CEO Luis Echarte.
Full-day ratings have grown from 2% to 5% of the market during the last year, Echarte points out.
“We’re now a U.S. network, we’re now competing, and we are something to contend with,” he says.
Azteca America has moved its headquarters to L.A. flagship station KAZA and hired a set of new execs to run programming and local production.
It has launched a new sports and entertainment show to compete with Univision’s exclusive World Cup coverage this summer. Web will also mount the fifth edition of singing competish “La Academia,” Azteca America’s most successful format ever.
Echarte says the potential sale of Univision marks a boon for the whole sector. “I think the fact that this company will be put up for sale at such value will create a lot of new interest in the area, which I think will increase advertising toward Hispanics and reduce that gap,” he says. “Plus, now having three or four Hispanic networks out of 10 that are going to be put in the mix with the Anglos, the money is going to spread out a little more.”
Telemundo and its broadcast TV rivals will also have to contend with the Spanish-language feevee webs such as Fox Sports en Espanol, which closed 63 upfront deals for broadcast year 2006, up from 47 in the previous year. Some of the hottest categories are wireless and automotive; insurance is an emerging one.
Tom Maney, senior VP of ad sales for the net, has very high expectations for this year’s upfront sales season.
“Cable overall is experiencing huge growth, as its total share of Hispanic viewing audience, particularly among the 18-49 male demo, now is 14%,” he says.
On the sports front, World Cup sponsorship was a factor in this current year. But with the tourney come and gone from a sales perspective, “We anticipate that many of the big spending brands will be ready to invest less traditionally, and cable, particularly FSE, is in a great position to capture more of those dollars.”
(Mary Sutter in Miami and Michael O’Boyle in Mexico City contributed to this report.)