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A Look Ahead At Hispanic Media

This year saw the end of years of double-digit growth in advertising revenue for Spanish-language television, with a mere 0.3% growth in the first eight months to $2.11 billion, according to TNS Media Intelligence data. And the outlook for next year isn’t much brighter.

“2009 is going to be difficult for everybody,” said José Cancela, principal of Miami-based Hispanic marketing communications firm Hispanic USA. “I think we’ll see a 2% or 3% growth [in Spanish-language TV.] It’s still growth, but not the double-digit figures we’ve seen in the past.”

Multichannel News contributor Laura Martínez runs down 10 key issues and developments that are likely to impact Hispanic-targeted media in 2009.

1. Univision vs. Televisa 
The nation’s largest Spanish-language media company is scheduled to face its programming partner and supplier Grupo Televisa in court on Jan. 6. The outcome of the trial, which has already been postponed several times this year, could strip Univision of its steady supply of primetime programming — specifically its telenovelas, which account for the network’s impressive ratings growth and a good deal of its advertising revenue.

Although there was speculation about a settlement, Televisa executives and their lawyer have dismissed such a possibility. “There are no settlement discussions pending and we do not expect there will be any settlement,” said Marshal Grossman, an attorney at law firm Bingham McCutchen in Santa Monica, Calif.

Univision, for its part noted in a recent filing: “If Televisa were to stop providing us programming for any reason, it could be difficult to develop or acquire replacement programming of comparable quality.”

2. The Digital Switch

Univision and Telemundo kicked off their respective 100-day countdowns to the Feb. 17, 2009, digital television transition with messages urging Latinos to prepare for the switch to DTV. So far, the messages seem to be working: According to a November survey conducted by the National Association of Broadcasters, Hispanics have shown “a significant increase in awareness” of the DTV transition, with 92% of Hispanic respondents aware that broadcast signals will switch to an all-digital format, a four-point increase since the NAB’s May survey.

3. FIFA World Cup

Next year will see the beginning of major advertising deals surrounding the 2010 FIFA World Cup soccer tournament, by far the biggest sports event among Latin Americans. The event, to be held in South Africa, is an important revenue source for Univision, the sole Spanish-language rights holder in the U.S. and Puerto Rico.

However, sports-specific networks are in full swing crafting programming and marketing strategies around the tournament. ESPN Deportes, Fox Sports en Español and GolTV this year secured rights to high-profile pre-qualifying and qualifying matches, and they expect to sign more such deals.

If previous years are any indication, the World Cup should draw massive audiences: The 2006 tournament in Germany drew a record-breaking 50 million viewers for Univision networks.

4. Mobile Content

Cell phone text and video offerings are far from overtaking carriage fees or advertising sales yet, but they have increasingly become an additional revenue source for Hispanic networks.

The market is too large to ignore. According to Simmons Research, there are over 18 million Hispanic wireless subscribers, and recent data compiled by Ping Mobile shows 66% of Hispanics use text messaging on a daily basis, compared to 36% of the general market.

“Mobile content is going to be huge among U.S. Hispanics,” said Lee Durham, president of LSN Mobile, which this year partnered with Telemundo and Azteca América to offer users local news and weather updates on their mobile devices. While the trend has been largely driven by the big broadcast networks, it is also catching on among smaller players such as V-me, Sorpresa, MTV Tr3s, mun2 and WAPA-TV.

5. Made-for-Advertiser Fare

Product placement has been a fixture of Hispanic television for decades, but content tailored specifically for advertisers is a relatively new phenomenon that is expected to take off in the years ahead. Last summer, Ford partnered with NBC Universal-owned Telemundo to create Amores de Luna a 22-episode miniseries featuring the automaker’s Ford Flex crossover vehicle.

“As Hispanic consumers evolve in the way they consume media, we will continue to use these type of programs,” said Dave Rodriguez, Ford’s multicultural marketing manager.

6. Multicasting

The switch to digital television will lead multicast channels to gain full distribution in their respective DMAs and this is no exception in the Hispanic market, where two relatively new entrants rapidly gained national distribution: LATV and V-me.

Latino youth-oriented LATV this year reached an agreement with Tribune Broadcasting — adding New York, Chicago and Dallas stations as multicast carriers — thus becoming a national network reaching 32 million homes. V-me, for its part, was launched in early 2007 and now reaches 50% of the market with 6.6 million Hispanic households.

But multicast is also expected to gain traction among the broadcasters. Telemundo has used multicast as a means to distribute its signal in the few markets it doesn’t reach.

7. Video On Demand

Early next year, Univision will join the ranks of Spanish-language content providers offering programming on demand when it will make available more than 1,000 hours of programming — including the FIFA World Cup and other sports — from its Univision, TeleFutura and Galavision networks.

Such content, though, will not include its popular telenovelas, nor any other shows produced and supplied by programming partner Grupo Televisa.

On the distribution side, all major MSO’s, including Comcast and Time Warner Cable, are expected to expand their Spanish-language VOD offerings, using them in conjunction with online offering to attract Hispanic customers.

8. Rethinking Tiers

While most cable operators are sticking with separate Hispanic programming tiers, Comcast this year moved 10 Spanish-language networks from a tier to digital basic in its Miami market. The operator has signaled it will make similar moves in 2009 in major markets, including Chicago, Houston and San Francisco.

Other MSOs remain on the sidelines, mulling whether a similar strategy could work for them.

9. Low-Power Stations

Low-power stations are expected to step up pressure on the incoming Obama administration to consider a proposal to allow Class A television stations a chance to apply to earn full-power TV status.

Many of these stations, which earlier this year were rebuffed by the Federal Communications Commission, fear they will go dark come the February DTV switch.

Randy Nonberg, member of the coalition and president of Una Vez Más, the largest Azteca América affiliate group, has said that the limitations originally imposed by the FCC on low-power television stations made sense in the analog broadcast era, but not in today’s digital times.

10. Syndication

Syndication is virtually nonexistent in the Hispanic market, but its double-digit growth in the general market (ad revenue for syndicated television grew 10% in the first half of 2008), is expected to compel more players to get in the game. So far, the biggest step this year was taken by LATV, which acquired AIM TV, the producer of syndicated shows American Latino and LatiNation that target bicultural and bilingual Latinos, for an undisclosed amount.

“We still don’t know what’s going to happen with the broadcasters’ secondary digital channels, but [the additional bandwidth] is going to be good for syndication,” said Rob Rose, AIM founder and now a consultant with LATV.