On one channel, there's a Spanish version of Sex and the City. On another channel MTV Unplugged
features singer Shakira and—of course—there's still a steamy Mexican novela or two out there.
No matter the offerings, the menu of Spanish-language cable programming is expanding and Hispanic viewers have a growing number of options. As the Hispanic population in the U.S. continues its growth spurt, cable networks and MSOs are hustling to offer more viewing options.
The 2000 census identified Hispanics as the fastest-growing American minority. Hispanics represent 12.5% of the U.S. population, and one of every six people under 18 is Hispanic. Hispanic media execs say the census figures just prove what they've known all along: Hispanics are a powerful group of consumers.
Cable penetration is much lower among Hispanic households than total American homes. Among Hispanic homes, 63% percent subscribe to cable or satellite, compared with 81% penetration in the overall market. Out of 10.2 million total Hispanic TV homes, only 6.4 million receive cable or satellite service, according to Nielsen Media Research.
That's due partly to language barriers, partly to the cost of cable. Census Bureau data show that the income of Hispanic households is about $28,300, roughly 38% below the $38,900 national average.
Cable and DBS operators are addressing half the equation by adding an array of Spanish-language channels to their lineups, though primarily in tiered packages requiring an additional fee. Spanish-language nets are trying to feed distributors appetites by moving beyond stock-in-trade TV novela and talk shows into broader programming genres.
Telemundo Cable is hoping to capture the "MTV generation" of Hispanic youth by relaunching its Gems net as Mun2 (it's referred to as "Mundos") on Oct. 10. When Telemundo purchased Gems last May the company inherited a female-skewing net heavily programmed with novelas and talk shows. Mundos will target a trendier demo with music programming and youthful drama series.
Telemundo Cable President Manuel Abud says there's a tremendous need for Spanish-language programming aimed at Hispanics in their mid-20s.
"Telemundo and Univision are working on the traditional audiences," Abud adds. "We think we have a good chance of succeeding with attracting the younger audience."
Mundos will reach 2.8 million subs, mostly former Gems viewers, when it relaunches.
Galavision, which is owned by Univision, has seen its distribution spike in the last few years, growing to 28 million homes, 4.3 million of which are Hispanic households. While most of the growth has been on cable, satellite subs have jumped from .7% to 10% of Galavision's distribution.
Galavision has seen its audience get younger over the last few years, drawing more 12- to 34-year-old viewers. The channel has changed its programming to reflect its youthful glow, and the schedule now features a daily morning block for kids, afternoon novelas and how-to shows and bicultural programming aimed at youth. Established English-language networks are also hatching Hispanic alternatives. Most draw off the resources of related domestic and international networks and offer a mix of dubbed and original Spanish-language programming.
"We're willing to invest a significant amount of money to get a stake in the U.S. Spanish-speaking market," says John Ford, head of Discovery's content group who overseas Discovery en Español. Ford declines to elaborate on the startup costs.
Programming execs did say costs are lower than an English-language network because they draw off library programming or make low-cost acquisitions from Mexican and other Latin American producers. But other digital cable nets that repurpose the mother ship's programming cost $3 million to $10 million a year to operate.
For example, Discovery en Español draws its programming from its international sister Discovery Latin America and from domestic library programming dubbed into Spanish. Ford says his network fills a void in Spanish-language programming. "They don't have many alternatives to news and entertainment in Spanish," he adds. "There's a real shortage of documentaries in Spanish."
Ford's explanation of Discovery's motives is a common refrain. Execs from several nets say they want to provide programming Hispanic viewers can't get from traditional Spanish-language services. CNN en Español tailors domestic and international news for its Spanish-speaking audience. "We're not a translation service," says the network's President Rolando Santos. "We report the news, gather it, write it and present it from a Latin American or Hispanic American point of view. The CNN en Español network reaches about 1 million U.S. cable subscribers.
Other English-based networks are also offering complementary Spanish-language channels. Fox Sports World en Español and ESPN Desportes offer coverage of Hispanic and American sports while MTV S and VHUno offer Spanish-language music programming and videos. MTV S also has long-form programming, like MTV Unplugged
and dubs some of its popular animated series such as Beavis and Butthead
MTV S reaches 3 million subscribers and VHUno is in 1 million Hispanic homes. And HBO Latino offers original hits like Sex and the City
dubbed in Spanish, along with Spanish and English-language feature films.
Unlike other full-service networks, ESPN Desportes is only available on Sunday nights through cable access channels and airs Major League Baseball, pro football and boxing. The broadcasts are a separate feed from ESPN's English coverage and feature Spanish-speaking crews and graphics.
Most major cable and satellite systems offer these Spanish-language channels bundles in packages. The cable packages, mostly on digital tiers, are less expensive than satellite, typically less than $15, although satellite service offers more channels. DirecTV Para Todos and Dish Network's Dish Latino charge $19.99 for more than 20 Spanish-language channels.
Some MSOs, such as Adelphia and AT&T, used to offer limited Hispanic programming à la carte, but the new expanded packages have made cable a viable alternative to satellite. And the subscription rates reflect that. Cable has higher penetration in Hispanic households, with about 5.4 million customers, while DBS counts nearly 800,000 subscribers, according to Nielsen numbers for the 2001-2002 television season.
Most of the Spanish packages are only offered on digital cable in major markets like New York, Houston and Los Angeles. Digital carriage means customers face increased costs for equipment and service, and economic constraints may prevent Hispanic viewers from upgrading to more expensive digital service. But operators say there simply isn't enough space on analog systems to add any more Spanish-language nets.
"The only way that most operators can represent all the diversity in this market is on digital," says Sandy Perron, Adelphia's regional director of sales and marketing for Southern California, including Los Angeles. "There is a demand for analog space that I just can't afford to give up."
On Perron's Adelphia system, must-carry networks occupy 31 of the 78 available analog spaces. She says the limited space forces Adelphia to make tough carriage decisions. Which cable nets offer the most value? Which appeal to the widest audience? She says mainstays like ESPN and Lifetime win out. In contrast, digital's capacity allows Adelphia to fit 12 channels in the space it now takes to carry just one.
While some Spanish-language nets remain limited to digital carriage, others are fighting to keep analog carriage. Galavision General Manager Lucia Ballas-Traynor says her net is adamantly opposed to moving to a digital tier.
"Digital penetration in the general market is low, so you can imagine how low it is in the Hispanic market," she notes. Galavision's cable carriage is about 97% on analog and she says analog service is critical for keeping Galavision in front of the largest possible Hispanic audience.
Despite cable's current subscriber lead, there's heavy competition between cable operators and satellite providers. Each side claims its advantages, with MSOs touting localized strategies and the value of low pricing while DBS operators push more channels and offer nationwide service, filling in gaps in regional cable service. Cable operators have aggressively rolled out Spanish packages in the last year, but they were late in the game. Now, MSOs are scrambling to make up for any ground they've lost to the satellite providers.
For example, Cox Cable offers a digitally tiered Spanish package in 19 markets, including San Diego, Orange County, Calif., and Phoenix. Cox's Manager of Video Services Nancy Heffernan says a localized strategy gives her system an advantage over satellite.
"The fact that we're local and we can get very involved in local communities, with Cable in the Classroom, having our executives get involved in Hispanic Chambers of Commerce, all of that makes us a stronger player," she says.
"I don't see cable as being a formidable competitor," says Yolanda Macias, vice president of DirecTV Para Todos. "In the last year cable has woken up to realize they are losing market share."
DirecTV offers two packages that combine English and Spanish-language channels, while EchoStar's Dish Latino offers both a Spanish-only and a Spanish-and- English-channel package. Both systems launched their Spanish-language services in October 1999.
"The number of channels for the dollar amount is much better with satellite," Macias says. The growing Hispanic market has created demand for new service, but also has challenged operators' marketing plans.
"MSOs need to realize ... putting out Spanish programming is not where the initiative stops," explains Vicki Wember, AT&T Broadband video product manager. "You need to have Spanish reps, Spanish-language materials like welcome kits and customer-care information." AT&T currently offers Spanish packages in eight markets and plans to add two more by the end of the year.
Media buyers say the census results demonstrate to their clients how important the Hispanic population has become, even in a soft ad market where they are looking to trim dollars.
"It's possible there will be a shift in priorities moving forward," says Monica Gadsby, Starcomm's director of Hispanic media. "Companies may think twice before they make ethnic advertising the first thing they cut."
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