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Catching Up With Latinos on the Move

Tiny, but red-hot — the Hispanic wireless market is piquing the interest of consumers, mobile providers and networks alike.

“Hispanics over-index in each of the respective data categories. They over-index in text messaging, the downloading of ring-tones, the updating of handsets [and the use of] video,” said Nicolas Montes, vice president and general manager of Viva! Vision, which is a provider of Latino mobile content to Verizon Wireless. “As a result, their average revenue per user is $10 to $12 higher than their non-Hispanic counterparts.”

The market for Latino mobile video is driven by a simple reality, according to Robert Rosenberg, president of telecommunications consultancy Insight Research. Namely, “the margins across the board for straight-up old voice calling are dropping. It is in the carrier’s interest to push enhanced services, and those enhanced services are going to be image related.”

According to Sprint multicultural marketing director Isaac Mizrahi, “Everything goes back to the idea of relevant connections, passion areas, areas of interest that we can use to better serve the Hispanic audience.”

Many of the programmers on the $9.99-per-month Sprint TV en Vivo service are small Hispanic cable networks such as VideoRola and kids network Sorpresa.

“It is not yet a great business. It still represents marginal revenue, although that could change in the future,” said Jorge Alejandro Tanaka, director of business relations and U.S. operations for the regional Mexican music channel VideoRola. “[But mobile] does offer an opportunity for brand extension and marketing and to increase exposure to your brand.”

Juniper Content chairman and CEO Stuart Rekant agrees that mobile does not represent a significant stream of cash but says that for Sorpresa, “every bit of revenue helps.”

HBO sees particular promise in African-American and Latino mobile consumers, since they are “some of the first adopters and avid consumers,” executive vice president of the new media programming group Carmi Zlotnik said.

HBO Mobile and HBO Family Mobile are currently available on AT&T’s wireless service, formerly Cingular Wireless, for $4.99 per month. Most of the material on offer consists of existing programming, but HBO Mobile is also commissioning original content for Latino cellphone users. Zlotnick describes it as “snackable type entertainment that you can enjoy on the bus, on the subway, in between classes [or] anytime you want to take a break.”

For now, the majority of Hispanic mobile video comes from existing networks. “Today, it is very much a re-packaging of cable television,” said Dean Fresonko, CEO of ClearSky Mobile Media, which provides wireless content for the U.S. Hispanic and Latin American markets.

And it is easy to see why. Networks have an abundance of content and can easily reshape it for smaller screens. “I already created a top 10 countdown for the linear channel,” Tanaka said. “And it only takes me 20, 30 minutes in an Avid-suite to create a seven-minute long version for mobile phones.”

Fresonko and Montes each provide content that is tailor-made for cellphones. Neither executive openly criticizes the networks, but both suggest the future lies elsewhere.

“What you are going to start seeing is a change in content consumption,” Montes said. “Our content strategy is building the content from the ground up and keeping the consumer in mind.”

“While I like the concept of packaging 24-hour channels for the Hispanic market, it just scratches the surface of what is possible with mobile,” Fresonko said. “You have to break the paradigm of continuous broadcast and break it down into nice digestible chunks for that elusive mobile consumer.”

In March, ClearSky plans to begin offering a particularly distinctive and “digestible chunk” of content in the form of horoscopes by Walter Mercado. The Puerto Rican astrologist is an instantly recognizable figure throughout the U.S. Hispanic market. Mercado appears on Univision’s weekday newsmagazine Primer Impacto.

According to Fresonko, there are some 700,000 cellphone users in the U.S. who pay for a subscription horoscope service. Approximately half are Hispanic, he said. Mercado is the most popular Hispanic astrologist. Univision Móvil charges $9.99 per month to send Mercado’s predictions to a customer’s cellphone. Fresonko would not say what the price of ClearSky’s Walter Mercado service will be.

Aside from horoscopes, there are other proven Hispanic mobile content sellers. “We’ve learned that bikinis sell well,” said Montes. Univision’s Web site lists the top 10 cellphone wallpaper downloads, and five are bikini-clad models. Third on the list is an image of the “Virgen de Guadalupe,” the widely venerated apparition of the Virgin Mary in Mexico.

Generally, though, music is considered the most popular category of mobile video. “It is something that is almost a necessity in popular culture to stay connected to your group of friends,” said Dale Knoop, senior director of business development for MobiTV, the company behind Sprint TV en Vivo.

There are no figures as to the current or potential size of the Hispanic mobile video market. There is no syndicated data available regarding the number of Hispanic video subscribers. Cingular, Sprint and Verizon Wireless all declined to provide specific numbers. Still, there is a widespread industry perception that “video is very hot right now,” said James Briggs, CEO of Briabe Media, which has a Spanish-language mobile media division.

Beyond modest revenue and marketing opportunities, mobile video offers existing networks a rare chance to experiment at a low cost and with little risk. “You don’t have huge audiences. There aren’t huge consequences and you get to try some stuff,” said HBO’s Zlotnick. “I don’t think anyone can say exactly what works and doesn’t work.”