Lights, camera, acción!
Media companies are piling into the Hispanic market. But will it pay off?
Dec 15th 2012 | MIAMI |
SOME call it “Hispanic Hollywood”, but Telemundo’s frenetic lot in west Miami is a world away from a Californian studio’s. Props, sets and characters rotate constantly. Episodes that might take a week to shoot in Hollywood are wrapped up in a day so that its torrid telenovelas, or soap operas, can air on time. Body doubles mill in the hallway waiting to film a prison fight scene between a comely murderess and another woman. The props room is a jumble of coffins, stretchers, Virgin Mary statues and fake bags of cocaine.
Entertaining America’s Hispanics has become a big business. Once, Spanish-language programming was dominated by a few specialised firms, like Univision and NBC’s Telemundo. But lately the field has become more crowded. Ten years ago there were around 14 broadcast and cable networks catering to Hispanics; today there are around 100 on air or in the works, says César Conde, the president of Univision. Big players are piling in. In August Rupert Murdoch’s Fox and RCN Televisión of Colombia started “MundoFox”, a Spanish-language broadcast network.
For many media companies the 2010 census was a wake-up call: it showed that around 51m Americans, or 16% of the population, are Hispanic. Between 2000 and 2012 their numbers rose by around 55%, more than four times the growth rate for the general population. Hispanics are also younger on average than other Americans, and are getting richer. So there are lots of advertising dollars chasing them. According to the Selig Centre for Economic Growth, Hispanics have around $1.2 trillion in spending power, up 146% from 2000, and spend disproportionately on such things as clothes and groceries.
Univision is still the biggest Hispanic network, beaten in prime time only by four networks in English—ABC, NBC, CBS and Fox—according to Nielsen’s ratings. Bought by private-equity firms in 2006 for $13.7 billion, Univision has launched new channels and digital initiatives, and is expected to go public in the next two years. It is aimed at Hispanics of Mexican origin, who are around two-thirds of the Hispanic population in America, and importstelenovelas from Mexico; Telemundo makes its own, and caters to Caribbean Hispanics.
Emilio Romano, the boss of Telemundo, insists it is a “big validation of our business” that media giants are piling into its market. But is this wise? Although the population of Hispanics is growing, they actually spend less time watching television than other groups in America, and watch more on mobile devices, which is trickier for media firms to earn money from. Advertisers pay half the average price for spots on Hispanic television, mainly because Hispanic families’ median income of around $40,000, although growing, is still a third below the average American household’s.
Telenovelas are still popular, but it is hard to think up other programmes with such broad appeal, given the Hispanic population’s diversity. Of the top 25 shows watched by Hispanic audiences during prime time, 23 are Spanish-language dramas or reality shows, according to Nielsen.
The other two are sports shows. Sports channels have broad appeal, but competition for rights is getting fiercer. Telemundo paid around $600m for the Spanish-language rights to screen the 2018 and 2022 football World Cups, nearly double what Univision paid last time around. Lino Garcia of ESPN, which runs a Spanish-language channel, “ESPN Deportes”, says such channels depend heavily on getting rights to show football (soccer), since that is what Hispanic viewers want to watch, but prices for showing European matches have soared.
Media companies are investing millions on these initiatives now, but will demographic forces stay on their side? Most of the Hispanic population’s recent growth has come from births, not immigration. As they grow up, second- and third-generation Hispanics may want to watch ABC, instead of “Abismo de Pasión”. More than a fifth of Hispanic Americans now speak only English at home.
Networks are responding by providing English subtitles for programmes in Spanish. They are also making more shows that are aimed at Hispanics, but in English. Rival networks will be watching closely next year when Univision and ABC join forces to launch the first cable-news network in English for Hispanics. Many are sceptical. Mr Romano of Telemundo says history shows that once immigrant groups start habitually using English, they want mainstream English-language entertainment. “I don’t see any English-language channels for Italian-Americans,” he says.
Correction: Univision and ABC are to launch a cable-news network, not a broadcast network, as an earlier version of this article said. This was corrected on December 13th 2012.