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News & Record

Spanish-Language Networks Become Titans


November 12, 2002
Copyright © 2002 News & Record. All rights reserved. 

HOUSTON -- In New York, Los Angeles and Chicago, the No. 1 network for nightly news among adults ages 18 to 34 is not ABC, CBS, NBC, Fox or CNN.

It is the Spanish-language network Univision.

In Houston, Univision has been ranked No. 1 throughout the day among adults ages 18 to 49 for almost a year, according to Nielsen ratings. In the Piedmont Triad market, it still trails the newscasts of the major network affiliates, typically drawing 2,800 viewers to its 11 p.m. newscast, compared with between 48,000 and 61,000 viewers for the network affiliates.

A population explosion among U.S. Hispanics is changing the TV and radio landscape and creating a bright future for Univision and other Hispanic broadcast networks.

Traditionally, Hispanic media networks have been considered part of a niche market, as opposed to the mainstream or general market, but such terms may no longer apply.

"This has been building and building and building," said Alex Lopez Negrete, president and chief executive officer of the marketing and advertising firm Lopez Negrete Communications in Houston.

The world began paying more attention after the 2000 Census came out, Lopez Negrete said.

"It was like, 'Oh, my God, there are Hispanics in America,'" he said.

The census showed that Hispanics are the fastest-growing segment of the U.S. population. In North Carolina, the number of Hispanics grew almost 400 percent from 1990 to 2000; in Guilford County, more than 450 percent.

Some observers argue that population trends can be misleading because many Hispanics living in the United States are entrenched in the cultural mainstream and watch and listen to general market TV and radio. And even immigrants will turn to English media once they assimilate.

Still, it's hard not to notice the footsteps of Univision, the giant among Hispanic broadcast media.

On June 12, Los Angeles-based Univision announced a deal to acquire Dallas-based Hispanic Broadcasting Corp., a powerful 55-station radio chain, for $3.5 billion.

Previously, Univision paid more than $150 million for the rights to the 2002 and 2006 World Cup soccer tournaments, and its soccer broadcasts have been drawing big audiences. In Los Angeles, for example, Univision's coverage of the U.S.-Mexico World Cup match drew 3-1/2 times more viewers than ESPN's.

In April, Univision's smaller rival Telemundo made news when it was bought by NBC for $2.7 billion.

Such mergers are causing the industry to take the Spanish-language market seriously, said Hector Orci, CEO of La Agencia de Orci, a Hispanic advertising agency based in Los Angeles.

He noted that within the past year, many major financial organizations have begun designating Latin media analysts in their firms, which shows that they understand that Hispanic media companies are sources of profit.

Victor Miller IV, a broadcast analyst with Bear, Stearns & Co., is a strong believer in the Hispanic broadcast market. Compared with the general market, Miller said, Spanish-language companies such as Univision are showing faster growth and better population trends while facing more limited competition.

The Hispanic market also reflects improved disposable income trends, Miller said.

In the past three years, the average income of U.S. Hispanic households has risen 15.9 percent, the biggest increase for that group on record.

According to Orci, spendable income among Hispanics living in the United States is larger than the gross national product of Spain or Mexico.

Opinions, however, are mixed on the significance of Univision's acquisition of HBC.

On a national level, Lopez Negrete said, the deal probably is making Univision's main rival, Telemundo, and HBC's rival, Radio Unica, worry because Univision now can offer advertisers one-stop shopping packages covering radio, TV and the Internet.

"They want 100 percent of the national Hispanic budget," he said.

On a local level, however, the merger won't mean as much, Lopez Negrete said, because Telemundo and Radio Unica still are strong among advertisers.

The Univision-HBC union will be "occasionally effective" in creating a one-stop shopping package, Orci said, but generally, most advertisers do not have big enough budgets to cover every platform, he said. They pick and choose.

Univision also is powerful on other media fronts, and Lopez Negrete said the company is poised to become even mightier. is by far the most widely used online Spanish-language portal, he said, and the company also owns one of the largest Spanish record labels, Univision Music Group.

Univision officials were not available for comment on their company. One industry insider noted that Univision once hired a public relations firm whose job was to keep the news media away from it.

Univision seems to be doing quite well without seeking publicity. It controls about 80 percent of the Spanish TV market.

It's a well-managed company with high-powered stations, said Lopez Negrete, who attributes Univision's strength to longevity and persistence.

"Over the years, they've been hammering and hammering at the same audience," he said. "They never take their eye off the ball."

Univision, the first Spanish-language station in the United States, was founded in 1961 under a different name, Spanish International Network. Televisa, a Mexican entertainment group, produced much of its programs and had a big financial stake in the operation.

In 1986, the Federal Communications Commission found SIN in violation of U.S. law prohibiting foreign ownership of U.S. stations, and the company was sold to Hallmark Cards. Hallmark diversified SIN with more programs designed for bilingual viewers but never showed a profit.

In 1992, the station was sold to a consortium led by entertainment financier Jerry Perenchino of New Jersey, who took the network back to its roots, focusing on Televisa productions.

Orci credits Univision's Mario Rodriguez, who heads the entertainment division, and President Ray Rodriguez, saying they are "obsessed with quality."

The idea of a homogeneous Latino market is relatively new. Less than 20 years ago, it was believed that there were three distinct categories of Hispanic viewers: Puerto Ricans on the East Coast, Cubans in Florida and Mexicans in the Southwest.

Research commissioned by Univision showed it was possible to find common programming ground among all Latino immigrants.

Most viewers of Univision are immigrants; about 70 percent are from Mexico.

Houston, the fourth-largest Hispanic market in the United States, is a ripe market for Spanish-language media because most Hispanics there are foreign born, said Nestor Rodriguez, a sociologist at the University of Houston.

About 75 percent to 80 percent of Hispanics are Spanish-capable, a range from Spanish-speaking only to speaking more English than Spanish. About the same number of Hispanics are English-capable.

As a result, general market and Spanish broadcast networks both have their eyes on bilingual Hispanics.

On the Hispanic network side, for example, Fusion, an MTV-style program on Telemundo's cable network Mun2, is aimed at young bilingual Hispanics.

Telefutura, another Univision network, soon will feature Spanish-language art movies.

Mike Barajas, general manager of television station KRIV in Houston, said he is confident many members of the Spanish broadcast audience eventually will cross over to the general market.

It is a process, Barajas said. Immigrants initially watch and listen to Spanish-language broadcasts. Over time, as their English improves and they become more assimilated, they move to the general market.

"They came to America to succeed and know that to do so they have to learn English," Barajas said. And the longer they are in the United States, the greater their interest in mainstream culture. Eventually, he said, "you bring them in."

Wall Street is keenly aware of Spanish broadcast media's clout, but advertisers are slower in coming over.

Only Hyundai, MCI, Colgate Palmolive and Sears are spending advertising dollars commensurate to the Hispanic consumer market, said Ingrid Otero-Smart, president of the Association of Hispanic Advertising Agencies.

Jeff Williams, Hispanic Broadcasting Corp.'s corporate research director, said that for many Spanish-dominant listeners, Spanish-language ads are effective.

When they hear ads on English stations, "they don't perceive that the message is intended for them," Williams said. "But on a Spanish station, they think, 'They're speaking to me, in my language and my culture.'"

HBC's programming is music-based. Mark Masepohl, HBC's vice president and regional manager for Texas, said he did not anticipate any changes in programming from new owner Univision.

In Houston, HBC's KLTN (102.9 FM) is among the top-rated stations in Houston.

HBC rival Radio Unica, by contrast, focuses on talk, news, entertainment and sports.

In the world of Hispanic TV programming, both Univision and Telemundo focus heavily on soap operas, or telenovelas, to fill air time.

Roel Medina, vice president and general manager of Telemundo's Houston station Channel 48, said his network runs telenovelas from 6 to 10 p.m. five days a week. He described the telenovela as a soap opera with an ending. They run from 13 to 29 weeks, he said, and they're addictive.

Soccer also is hugely popular among Hispanics.

Lopez Negrete said Univision cleverly spread the World Cup games over its three networks. The games are aired live on Univision, and Univision-owned Telefutura and Galavision show World Cup repeats and news capsules.

The game between the United States and Mexico was Univision's most watched program ever, garnering more than 4.2 million viewers.

Telemundo made a bid for the World Cup, but the Federation Internationale de Football Association stuck with Univision, FIFA's TV home since 1978.

Rob Spallone, media planning director at Lopez Negrete, said many bilingual Hispanics prefer Univision over English broadcasts because Univision's camera crews are more adept at covering soccer, and the announcers show more passion when, for example, shouting, "GOOOOOOOLLLLL! Gol! Gol! Gol!"

Such a fiery voice is needed, Spallone said, when you are watching a soccer game at 4 a.m.

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