A Spanish-TV Upstart Nips at Heels of No. 2 Telemundo
By MIRIAM JORDAN
Staff Reporter of THE WALL STREET JOURNAL
July 25, 2005; Page B1
http://online.wsj.com/article/0,,SB112225742216794624,00.html?mod=todays_us_marketplace
On weeknights at 7 p.m., two veteran Spanish-language television networks
that have long fought for market dominance -- Univision and rival Telemundo
-- serve up spicy soap operas. But an up-and-coming network called
TeleFutura airs a game show inspired by "Family Feud," in which two Mexican
families compete by answering trivia questions.
TeleFutura's different offerings are a key to its early success. Since
going on the air in 2002, the network -- which like Univision is owned by
Univision Communications Inc. of Los Angeles -- has quickly made a name for
itself by zigging when its more established counterparts zag.
With a lineup of game shows, Hollywood blockbusters and sports, TeleFutura
counter-punches both Univision and Telemundo at nearly every hour.
"TeleFutura is about more choice and variety," says Alina Falcon,
TeleFutura's executive vice president.
With its strategy, TeleFutura is fueling a new fight in Spanish-language
TV. While the industry long has watched the rivalry between top-rated
Univision and perennial No. 2 Telemundo, the most interesting fight these
days is TeleFutura's quest to unseat Telemundo in the second slot. Unless
the programming lineup of Telemundo, a unit of General Electric Co.'s NBC
Universal, strikes a chord with more U.S. Hispanics in the upcoming season,
Univision Communications soon may boast the top two positions in
Spanish-language television.
To many observers, that would be a surprising outcome. "The initial
thinking was that Univision would steal viewers from itself" by launching
TeleFutura, says Jose Lopez Varela, managing director of Hill Holliday
Hispanic, a Miami Beach, Fla., advertising agency. Instead, TeleFutura has
kept attracting more eyeballs, at least partly at the expense of its Miami
rival. It beats Telemundo during some parts of the day, and is closing in
during coveted prime-time hours, too.
For the 2004-2005 season from Sept. 20 to June 19, Telemundo attracted
296,000 viewers between ages 18 and 34 during prime time; TeleFutura drew
250,000. However, Telemundo's young-adult audience was down 11% relative to
the same period a year earlier, while TeleFutura's rose 2%. Meanwhile,
Univision remained the undisputed No. 1, with an 18- to 34-year-old
prime-time audience of 1,330,000 in the same 2004-2005 period.
Telemundo President Don Browne attributes the mixed ratings in the latest
season to the learning curve that the network is experiencing during a new
phase of creating original soap operas (telenovelas in Spanish) and other
shows in its own studios. Previously, the network mainly acquired programs
produced by broadcasters in South America.
To spread the word to U.S. Hispanics that its new in-house productions
cater specifically to them, Telemundo has launched a marketing campaign
with the slogan "hecho para ti," or "made for you."
At its May "upfront" presentation to lure advertisers, Telemundo showcased
several new telenovelas, with plots revolving around unrequited love, as
well as series with real-life plots. One drama, "Envios" is the tale of a
Mexican who crosses the U.S. border to work and earn money that he sends
back home. "La Quinceanera," features a U.S. Latino family as it plans and
throws their 15-year-old daughter's coming-out party.
Still, Univision and sister network TeleFutura have a colossal edge over
Telemundo, thanks to the tried-and-tested telenovelas and other smash hits
they acquire from Grupo Televisa S.A., a big Mexican broadcasting group. In
coming weeks, TeleFutura will start airing Mexican comedy classics made by
Televisa.
Because about 70% of U.S. Latinos are Mexicans, Televisa's programming
almost always resonates with viewers here.
"Univision has an incredibly unique advantage," says Jessica Reif Cohen, a
media analyst at Merrill Lynch. "They take the best programming in the
Spanish-language market and use it." The exclusive agreement between the
U.S. company and Televisa lasts through 2017.
When General Electric acquired Telemundo three years ago, it was betting on
the growth of the Hispanic population in the U.S. Spanish-language
television is adding viewers and advertisers faster than mainstream
English-language television. Thus, regardless of what network occupies the
No. 2 spot in the coming season, all three players are likely to keep
expanding.
Hispanics are the largest minority in the U.S., numbering about 41 million.
The steady stream of immigrants from Latin America provides an ever-growing
audience for Spanish-language TV. Broader programming is drawing bilingual
viewers, too.
Advertisers are taking note. Ad spending on Spanish-language television
jumped 19.6% in the first quarter of 2005 compared with the same quarter a
year earlier, according to Nielsen Monitor-Plus. Overall U.S. media ad
spending rose a paltry 2.4% in the first quarter from a year earlier.
Companies that have been advertising on Spanish-language TV in select
markets are starting to go national with their marketing efforts. Unilever,
maker of Hellmann's mayonnaise and Ragu tomato sauce, has quadrupled its
Spanish-language media spending since last year, with most of its budget
allocated to television.
"Telemundo, TeleFutura and Univision have nothing to worry about for the
foreseeable future," says Mr. Lopez Varela, the advertising executive.
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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