2005 Annual Report - Ethnic Media Newsroom Investment

In the big picture of the ethnic media, the outlook is clearly positive. The sheer number of outlets today, compared to a decade or two ago, reflects unmistakable growth. Beyond the Spanish-language media, however, there are three large barriers preventing large-scale national growth.

• Most of the ethnic groups that are growing in the U.S. don't share a common language that media outlets can peddle to several groups at once.

• Even though some ethnic groups are entering the country in fairly large numbers, their populations are not geographically concentrated enough to yield large-scale growth.

• Until other ethnic groups reach that kind of large-scale critical mass, many advertisers don't feel the need to target them. This effect is compounded in the age of "category killer" stores like Wal-Mart that stock everything from milk to auto parts and that advertise on a national stage, paying little attention to local groups and media.

Again, in economic numbers the Spanish-language media have the most to offer. The Latino Print Network has captured the growth of ad revenues for the Spanish-language newspapers. The data show remarkable increases, but like the circulation numbers there is a proviso here - these numbers are largely self-reported.

Spanish Language U.S. Newspaper Ad Revenue

Select years, 1970 - 2003

Design Your Own Chart

Source: Kirk Whisler & Latino Print Network, Carlsbad, CA

Even from 2000 to 2003, when the U.S. economy was going through a slow period, ad dollars for Spanish-language newspapers actually increased by more than $250 million according to the Latino Print Network figures, growth that is stunning if accurate. Accuracy is a big question here, particularly considering the tough times the largest Spanish-language dailies have had with circulation. And according to LPN, most of the ad revenues came from the forty Spanish-language dailies.⁶

Spanish Language Newspaper Ad Revenues by Publication Category, 2004

Design Your Own Chart

Source: Kirk Whisler & Latino Print Network, Carlsbad, CA

Assuming those numbers are right, or at least partially right, they would seem to suggest that the Spanish-language papers with the brightest future are less likely to be supplements to other reading and more likely to be the papers that audiences turn to for news every day. Such papers, after all, provide the most direct competition for the bigger advertising dollars that normally go to the English-language dailies. Most English-language dailies - and other English-language news media, for that matter - have declining audiences. Advertisers looking for another avenue probably see a lot to like in the Spanish-language press. It offers a chance to reach a growing demographic and a chance to target ads with a more directed appeal.

At the same time there may be questions about the long-term viability of those papers. If, as use numbers show, Spanish-speakers rely more on English-language papers than Hispanic ones, and if the circulation slowdown at some Spanish-language papers continues, it's not clear that the ad dollar numbers are accurate and, if they are, that they will continue to rise in this way.

But there are other signs of growth among Hispanic media outlets. In October 2004 Univision signed a $100 million television and radio advertising contract with Miller Brewing.⁷ Even before the deal, in the first six months of 2004, the company's net income was more than double what it was in the first half of 2003 - $115 million versus $54 million.⁸ That follows steady increases over the past few years in net income, from $54.7 million in 2001 to $155.4 million in 2003.⁹

Univision Net Income, 2001-2003

Design Your Own Chart

Source: Hoover’s Online, http://www.hoovers.com/univision/--ID__51512--/free-co-fin-factsheet.xhtml

Univision seems to be the big winner so far in its race with NBC-owned Telemundo. When NBC purchased the then second-place Spanish broadcaster in 2002, the assumption was that Telemundo was primed for a run to compete with Univision. But revenue numbers on Telemundo are not readily available, and Univision seems to be scoring the biggest gains in viewers.

Outside of the Spanish-language media, there simply isn't much hard information on the economic situation of the ethnic press. Some reports indicate that the black press was hit particularly hard by the economic downturn that began in 2001, with some papers seeing ad declines of 40% to 50%.¹⁰