A marketing puzzle in any language
Eighteen-year-old Brian Morales represents a growing segment of America that baffles advertisers, broadcast networks and cable channels.
The Santa Monica College freshman listens to Metallica and Linkin Park on his iPod. He also likes rock en espanol such as La Ley and Mana. His favorite TV show is the sci-fi drama “Heroes” on NBC and he tunes in to Univision to watch news and soccer with his dad. He’s equally at ease in English and Spanish.
“My culture is not ordinary. It’s mixed,” Morales said. “I am Hispanic but I do have my American culture.”
This cultural fusion is becoming an increasingly typical demographic. According to the U.S. Census Bureau, 1 in 5 U.S. adults ages 18 to 34 is Latino. Garcia and Rodriguez are now among the top 10 most common surnames in the nation. At least 50,000 Latinos in the U.S. turn 18 each month, UCLA demographer Leo Estrada estimates.
Despite the economic clout such figures represent, media companies and advertisers are grappling with whether to reach this growing audience in Spanish or English. Most efforts to date have been focused on Spanish. Six years ago, NBC Universal spent nearly $2 billion to buy Telemundo; Time Warner’s HBO created HBO Latino, where it airs Spanish-language movies; Walt Disney Co. created ESPN Deportes and Fox initiated Fox Sports en Espanol for Latino sports lovers. Comcast Corp. launched CableLatino, which offers a package of Spanish-language channels, on its local cable systems.
Traditionally, television advertisers and networks have believed that if they were not reaching Latinos through the two major Spanish-language networks, Telemundo and Univision, then they would connect with them through mainstream shows that have proved popular with young bilingual audiences such as “Ugly Betty,” World Wrestling Entertainment’s “Raw,” and “American Idol.”
Some believe that those strategies miss the sweet spot because they fail to recognize that the majority of Latinos living in the U.S. are bilingual and speak predominantly in English, while at the same time retaining their cultural roots.
“There is still a wide-open space for entertainment targeting Latinos who live in English and Spanish,” said Antoinette Alfonso Zel, former senior executive vice president of strategy for Telemundo. “That is the opportunity that may well be filled by the Internet unless the networks commit to this audience.”
Hoping to tap that rich, dual cultural vein, four fledgling networks are feeling their way to this elusive audience by targeting Latino viewers in English rather than Spanish. The biggest players are Mun2, operated by NBC Universal’s Telemundo unit; and MTVTr3s, owned by Viacom Inc.
Two other English-language networks, SiTV and LATV, have been targeting the Latino market, but both lack the backing of media giants. LATV, which started as a Los Angeles station in 2001, earlier this year rolled out to more than a dozen markets in the U.S. by striking deals with local TV stations that will carry LATV programming on their digital channels. SiTV began as a producer of Latino programming in 1997 before morphing into a cable network in 2004.
“We chose English-only for one simple reason: We live in America and it’s the language around these kids,” said Michael Schwimmer, head of SiTV. “There is a big difference between speaking Spanish and watching television in Spanish. The 18-to-34-year-olds are watching TV in English.”
Launched in 2001 from Miami, Mun2 initially skewed toward young males of Puerto Rican and Dominican heritage. But that proved to be too narrow a focus, and in 2005, Telemundo relaunched Mun2. Now based in Los Angeles, home to the largest segment of the nation’s Latino population -- Mexican Americans -- Mun2 has broadened its appeal with females by creating new programs such as “Vivo,” a music show featuring Spanish- and English-speaking acts such as Juanes and Mana.
MTVTr3s, pronounced “MTV tres,” was launched only last year. Like Mun2, it targets young adults 18 to 34 through a mix of music videos and live shows such as “Mi TRL,” the Spanglish offshoot of “Total Request Live,” a signature program on MTV. Documentaries dealing with such key issues as immigration and a Latino outreach component modeled after MTV’s Choose or Lose campaign are also part of the mix.
Establishing a connection with the viewer who lives equally in both the Latino and Anglo cultures is essential for the channel’s success, MTV President Christina Norman says. The “audience needs to know that this is being made for them and influenced by them. This isn’t your grandmother’s Spanish-language TV channel,” she says.
Some advertisers may finally be tuning in. Within the last year, Mun2 has added 18 new major advertisers such as Microsoft’s Zune, XM Radio and Colgate, as well as studios including Sony Pictures and Lions Gate, according to Alex Pels, general manager of Mun2.
“Six years ago, when Mun2 was launched, there was not a clear picture of what this bicultural audience was,” Pels said. “What we have seen in the last few years is that advertisers are realizing that it’s not enough to do mainstream Spanish-speaking media. To think that you can only target Hispanics by speaking in Spanish is not logical and not real.”
Because Mun2, available in 17.2 million households, and MTVTr3s, available in 31.9 million households, are in their infancy, revenues are still minuscule compared with figures for older, established targeted channels such as BET or Lifetime, for example.
Neither of the networks will disclose financial details, but according to media research firm SNL Kagan, Mun2’s net revenue in 2007 will grow almost 14% to $21.2 million, up from $18.6 million last year. MTVTr3s’s revenue this year will jump 23.5% to $12.1 million, up from $9.8 million last year, SNL Kagan said. By comparison BET, launched in 1989 for African Americans, is expected to generate $519.1 million in net revenue this year, estimates SNL Kagan.
Mun2, MTVTr3s and other English-language, Latino-oriented channels face far greater competition for advertisers and viewers than BET did when it began almost 19 years ago.
In addition, the government-ordered conversion of broadcast stations to higher-capacity digital transmission, which must take place by February 2009, will increase the choice of channels and further fragment the market. “It is a tough time to get in the market,” said Deana Myers, senior analyst for SNL Kagan.
Even Morales admits he is a tricky customer to reach. He is a member of MTVTr3s’s focus group called the Cooltura Panel, which includes about 100 young Latinos from a variety of U.S. cities and backgrounds, who tell executives at MTVTr3s what trends are happening in their communities and what issues are important to them. “There is already so much to choose from. . . . It wouldn’t hurt to put more out there but it would have to be really, really good to draw from shows that we are already watching,” he said.
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