2004 Annual Report - Spanish-Language Media

In television, among the ethnic media it is really only the Spanish-language channels that have a sizeable and significant presence. There is not one, but two networks aimed at the Hispanic audience - Telemundo and Univision. Telemundo, the smaller of the two, was launched in 1986 by Saul Steinberg and Henry Silverman of Reliance Capital Group, who believed mainstream outlets were not paying enough attention to the nation's growing Spanish-speaking population. The network was cobbled together out of stations in Miami, Los Angeles and New York and sold to Sony in 1998 for $539 million. Then the network was purchased by NBC in 2002 for $2.7 billion.

Univision, which has roots that trace back to 1961 and a small station in San Antonio, came into existence in its current form in 1992, when the network was purchased from Hallmark by a consortium of buyers. Today Univision is the giant of Spanish-language television. At the time of the Telemundo/NBC deal in 2001, some estimated Univision's overall value to be at least $8 billion - and that doesn't take into account the company's deals since then, such as the 2003 purchase of the Hispanic Broadcasting Company radio group for $3 billion. Univision owns 50 stations and has 43 affiliates. Telemundo owns 15 stations and has 32 affiliates.⁸

Spanish-Language TV Stations by Network

Design Your Own Chart

Sabrina Jones, ’’Hispanics Surpass Blacks as a Growth Market for Ads,’’ Washington Post

News Operations

For a long time Univision was the leader in the Spanish language TV news race because it was alone. Five years ago, Telemundo didn't even have a news operation. But the battle is now joined and Telemundo has some special advantages. Since NBC purchased Telemundo the English-language network has pumped more than $70 million into Telemundo's news gathering operations, doing things like buying cameras, building sets and adding newscasts in important markets. And NBC offers a unique advantage to Telemundo over Univision, the extensive newsgathering operations it already has in place with its news division and MSNBC. While the work of NBC's correspondents is obviously of limited value because reports are done in English, Telemundo can tap into the network's satellite feeds and air its news footage.

In 2003, the changes in Telemundo's news operations were readily apparent. It, not Univision, was the first Spanish-language network to announce the War in Iraq had begun. And while Univision started its coverage with one small news team in Kuwait, Telemundo had five journalists in the Middle East - one in Baghdad itself. As a result the network saw its viewership shoot up 27 percent in the first two days of the war. Univision quickly played catch-up, sending its most popular anchor to the region and nailing down a series of exclusive interviews. But without Telemundo's spurring, it's difficult to say what Univision's coverage would have looked like.

Overall, though, Univision still has the bigger news operation and still offers more news programming throughout the day. Schedules, counting local news, vary from station to station, but Univision's television schedule shows seven hours of news programming on an average weekday - counting news magazine and morning shows. In Washington DC, the Univision affiliate airs 6 ½ hours. Telemundo airs news programming 3 to 4 hours a day depending on how loosely one stretches the definition to include news/talk. In Washington, the Telemundo station follows the national schedule.

Usage and Economics

If there was any question about the growth potential of these networks, it was answered when NBC purchased Telemundo. While the 1990s were a time of big growth among the Spanish-language media, analysts believe there is still a lot of room for more. Ad spending in Spanish-language radio and television has not kept up with population growth. Hispanics make up about 13 percent of the United States population, but attract only about 2 percent of the annual advertising dollars here.⁹ When NBC purchased Telemundo, it estimated that Hispanic/Latino buying power would grow from $400 billion to $1 trillion a year by 2010.¹⁰

A look at the 2003 revenue for Univision suggests there is indeed still a lot of room for growth in the market. The network ranks as No. 24 in Broadcasting & Cable's top-25 television networks with revenues of $568 million, an increase of 7.4 percent over 2002. But revenues could be higher. The network's viewership, 3.1 million, is higher than all but four networks on the list.¹¹

The Spanish-language audience offers other advantages to advertisers. The audience has more of the desirable youth demographic than other audiences. Nielsen data for 2003 estimate that 65 percent of the Hispanic population is under 35, compared to 45 percent for non-Hispanics. Every Hispanic household reached by advertisers has more people living there - 3.6 members versus 2.4 members per non-Hispanic household.¹² Furthermore, Nielsen data from 2000 show that Hispanics also watch much more television than the nation, an average of 17 hours and 28 minutes per week, while the nation on average watches for 13 hours and 15 minutes. In fact, across every age demographic, Hispanics out-watch the nation. The biggest gap is in the 2-11 age group where Hispanic children watch 6 hours and 52 minutes of television a week, compared with 4 hours and 57 minutes for the nation at large.¹³

Prime Time Television Viewing per Week, 2000

In hours

Design Your Own Chart

Nielsen Research, ’’Hispanic Weekly Television Usage: Primetime

And the Spanish-only audience is growing. According to Liz Castells-Heard, president of Castells & Asociados, a Los Angeles ad agency, about 55 percent of Hispanics tuned in to English-language television in the early 1990s. In 2003 that number fell to 30 to 35 percent.¹⁴ That trend could mean several things. In part, it is probably due to the growing Hispanic population through immigration. As the number of new Spanish-speaking Americans climbs, it only makes sense that they would turn to Spanish-language broadcasts. It could also mean that the rise of Spanish-language outlets has created a media environment that does not require immigrants to learn English. Even when people learn a second language as adults, they often prefer to do certain things in their first language, such as getting their news. Moreover, much of the English acquisition is limited and functional rather than fluent. Ethnic media provide a certain kind of news that is not available from the mainstream media, most importantly news of home countries, and also more detailed local coverage of geographically discrete ethnic communities. If foreign-born Spanish speakers want to know what is happening today in a Dominican economic crisis, a governor's election in Puerto Rico or a Nicaraguan corruption scandal, Univision or Telemundo is the only practical choice. The trend has a lot to do with the media being centered on a language rather than an ethnicity. If all the Spanish-speaking immigrants that entered the United States spoke languages based on their individual nationalities, the growth of the Hispanic media would probably not be as rapid. Slower growth would mean fewer Hispanic outlets and fewer outlets likely mean fewer listeners. The other possibility, as mentioned earlier, is that much of Hispanic population in the United States is migratory, spending months on both sides of the United States-Mexican border. It would stand to reason that the Spanish-language media would be their first choice, and their only choice if there were enough of it. However, some experts contend that the Hispanic foreign-born population is now less migratory than it ever has been.

Ownership

When Telemundo was purchased by NBC in 2002, the Spanish-language network immediately grew in stature and went from being a kind of also-ran to a serious second-place network with a lot of potential for growth. The buy meant a Hispanic network was essentially being taken over by an English-language conglomerate, since NBC's parent company is General Electric. It meant that big money and resources were behind the network, maybe even enough to take on Univision.

Meanwhile, Univision, the solid first-place Spanish-language network, has secured its place differently. Owned by the billionaire A. Jerrold Perenchio and a group of Hispanic investors, it is relatively insulated from outside pressures. Perenchio is an Italian-American producer who has been involved in such projects as the television series "All in the Family" and the movie "Driving Miss Daisy." The other parts of Univision's ownership team are Mexico's largest commercial broadcaster, Televisa, and the Cisneros Group, a large privately held media company based in Venezuela.

In 2003, Univision purchased the radio giant Hispanic Broadcasting Corporation. HBC owned 63 radio stations concentrated heavily in California, Texas and Florida. The combined assets give Univision a strong position in both areas of broadcasting and have helped make it the giant of the Hispanic media community.

A third company, TV Azteca, a Mexican broadcaster, is in the beginning stages of putting together an American operation.