Univision’s move is intended to tighten its grip on the growing Latino market and tap a more stable source of revenue: cable affiliate fees. It will launch separate channels for news, sports and telenovelas next year.
|One of the three new cable TV channels that Univision Communications plans to launch next year will be devoted to Spanish-language soap operas, or telenovelas, such as “Soy Tu Duena.” (Univision / May 19, 2011)|
Spanish-language media giant Univision Communications Inc. plans to launch three new cable television channels next year in a bid to tighten its grip on the growing Latino market and diversify its revenues.
Univision is expected to announce Thursday that one of the channels will offer soccer and other sports, one will be devoted to news and information, and a third will showcase the spicy Spanish-language soap operas, or telenovelas, that fuel Univision Network’s prime-time ratings.
The new channels are part of an increasing trend by media companies to increase their investment in Spanish-language TV. Recently released census findings show that Latinos make up the nation’s fastest-growing population. Univision already controls nearly 70% of the Spanish-language television market.
New York-based Univision is making an extra effort to flex its market muscle. Major broadcasting groups — including Fox, ABC, NBC, CBS and Turner Broadcasting — this week have been pitching their fall lineups to hundreds of advertisers in New York in an effort to grab slices of the more than $9-billion “upfront” advertising market. Univision will unveil its lineup Thursday.
On some nights, Univision — the nation’s fifth-largest television network — glides past fourth-place NBC and other established broadcast networks among younger demographic groups in the ratings. And unlike the major broadcasters, which are struggling to hold on to their audiences in an increasingly fragmented media universe, Univision’s prime-time viewership has increased about 8% from last season.
“The recent census findings have been waking up a lot of our competitors, and advertisers, to the power and the organic growth of the Hispanic marketplace,” Randy Falco, Univision’s chief operating officer, said in an interview. “We are actually at a tipping point where advertisers cannot ignore this market any longer.”
The 2010 census revealed that more than 50 million Latinos live in the U.S., making up 16% of the population. From 2000 to 2010, the Hispanic population grew 43%. In contrast, the segment of people who identified themselves as white grew about 1%, according to the census.
“Every 10 years we get what I call the ‘wake-up call’ with the results of the census,” said Carmen Baez, president of Latin American and multicultural marketing with advertising behemoth Omnicom Group Inc. “And this time around, the numbers were so staggering that people just can’t ignore it.”
Univision’s chief competitor, Telemundo, does not want to get left behind. In late January, Comcast Corp. took control of Telemundo owner NBCUniversal and declared that growing Telemundo revenues was a priority. NBCUniversal Chief Executive Steve Burke unexpectedly tapped the company’s marketing whiz, Lauren Zalaznick, to oversee Telemundo and the company’s youth-oriented cable channel mun2.
Zalaznick, a former film producer who helped build the Bravo cable channel into a cultural force, greeted advertisers who attended Telemundo’s programming presentation Tuesday night — in Spanish. She said she was happy to join the crowd.
“Estoy muy feliz de estar aqui con ustedes,” Zalaznick said before switching to her native tongue. “Two months ago I could not have said one of those words in Spanish. I’ve learned a lot since then.”
Telemundo, which is based in Miami, dubbed its Latino market awareness campaign “the shift,” acknowledging the change in the complexion of the nation as well as the cultural influence of Latinos.
“It is the shift — the landscape is shifting right before our very eyes,” Baez said. “But while Hispanics make up 16% of the population, Hispanic media only captures 4% of the advertising dollars spent in the U.S. We need to do a better job.”
For Univision, expanding its share of the advertising pie and its portfolio of Spanish-language channels is a corporate mandate. In 2007, Los Angeles billionaire A. Jerrold Perenchio sold Univision to a group of private investors, including another L.A. billionaire, Haim Saban, for nearly $14 billion. The transaction — at the top of the market — left Univision burdened with debt. Within a few months, the recession hit and advertising spending plummeted.
With the new cable channels, Univision’s goal is to establish a more stable source of revenue — cable affiliate fees — to reduce its reliance on advertising. Univision already has two broadcast networks, Univision and TeleFutura; a popular cable channel, Galavision; and a vibrant chain of TV and radio stations.
Univision has dramatically improved its fortunes over the last year, restructuring its debt and resolving a long-running feud with its Mexican programming partner, Grupo Televisa. Televisa produces the popular Mexican telenovelas that have been key to Univision’s prime-time success. About 65% of the U.S. Latino population is made up of people of Mexican descent. The new agreement gives Televisa equity in Univision and guarantees Univision its pipeline of soaps.
Univision, in addition to expanding its own in-house production studio, plans to dip into Televisa’s vast library to fill the proposed telenovela channel.
“The beauty of the Televisa library is that it is big and deep,” said Cesar Conde, president of the Univision networks. “And we are going to continue to develop our own original programs to complement the Televisa brand.”