By Keach Hagey (Wall Street Journal)
For the top four broadcast networks, which have endured a tough television season, the coming “upfront” advertising-sales negotiations for next season could be difficult. But for another of the majors, Univision, it may be a different story.
Propelled by the country’s rapidly growing Hispanic population, the Spanish-language broadcaster is the only one of the top five networks to have increased its prime-time viewership this season in the coveted 18-to-49-year-old demographic. Although it will likely end the season in fifth place, its audience in that age group is up 1% for the season to date, compared with declines of 3% for CBS Corp.’s CBS +1.81% CBS, 22% for News Corp.‘s NWSA -0.06% Fox, 7% for Comcast Corp.’s CMCSA +0.28%NBC and 9% for Walt Disney Co.’s DIS +0.79% ABC, according to Nielsen.
Univision’s telenovelas helped the Spanish-language network beat NBC in 18-to-49 year-old viewers during the latest ‘sweeps’ rating period.
Univision has long dominated its market, drawing 58% of the Spanish-language prime-time audience in that demographic. But lately it has emerged as a more serious competitor to the big English-language networks, ad buyers say.
For the first time, Univision beat NBC in the 18-to-49 age group during the February “sweeps,” the crucial quarterly ratings periods that local stations use to set their advertising rates, according to Nielsen.
Univision executives say they plan to use this victory to help argue for a bigger share of TV ad dollars at its May 14 upfront. Spending on Spanish-language TV made up only about 8.2% of all TV-ad spending in 2012, according to Kantar Media. Yet Hispanics make up 17% of total viewers and 19% of 18-to-49-year-olds, according to Nielsen.
“Our messaging to the advertising community is, ‘Why would you continue to pay more for less on the English-language side, when the ratings on Univision continue to grow?’ ” said Univision Communications Inc. Chief Executive Randy Falco. “You can’t ignore this anymore. You’re on the wrong side of history if you do.”
Some advertisers agree. Ed Gold, the advertising director of insurer State Farm, a longtime Univision advertiser, says he expects the network’s victory over NBC in the sweeps will “have advertisers who haven’t been advertising in the Hispanic market stand up and take notice that this is a very large market, a very loyal market, and, to a certain extent, there is not as much fragmentation as there is in the English-language audience.”
Mr. Falco said that Univision does business with “maybe a third” of the advertisers that English-language networks do. That is partly because media buyers don’t tend to watch the Mexican telenovelas that Univision runs during prime time, he said, and partly because advertisers often don’t have the budget to make separate Spanish-language commercials, according to media buyers.
To help address that problem, Univision began accepting the occasional English-language advertisements last year. It also may help that Univision, which is controlled by a group of private-equity firms, has hired several former NBC executives in top positions—including Mr. Falco, who spent three decades at NBC, and Keith Turner, Univision’s ad-sales chief.
“We’ve got a great pool of money from all the Hispanic advertisers,” said Mr. Turner. “In order to grow, we’ve got to get more English-language money.”
Univision also faces the challenge that the median Hispanic household income is 76% that of the overall U.S. average, according to 2010 census data.
Steve Mandala, Univision Communications’ executive vice president of advertising and sales, says Univision’s viewers are less wealthy, on average, than their English-language counterparts primarily because they are so much younger. Univision’s median prime-time viewer is 39, compared with the high-40s to mid-50s for the top four English-language networks, according to Nielsen data provided by Univision.
Univision also points to Nielsen data that show its viewers watch live television at much higher rates than those watching English-language networks, which means most Univision viewers are seeing commercials.
Univision faces intensifying competition in its core market. At Comcast’s Telemundo, the No. 2 Spanish-language broadcaster, the audience in the 18-to-49 age group has risen 7% so far this season, although Telemundo’s total viewership remains less than half of Univision’s. Telemundo isn’t going after English-language ad dollars.
“We have a bit of a different approach,” said Mike Rosen, executive vice president of ad sales and integrated marketing at Telemundo, adding that he will be telling advertisers that “there are better ways to maximize investment within their current Hispanic investment.” Mr. Rosen said Telemundo would be emphasizing its original content and the opportunities for engagement through vehicles like social media.
Meanwhile, newcomers like MundoFox, which was launched by News Corp. last year, is also going after the Hispanic ad money that has long sustained Univision. News Corp. also owns The Wall Street Journal.
Mr. Falco is keenly aware that the Univision audience “will fragment,” just like the English-language network audiences before it, and has tried to meet that challenge by putting the Univision brand “in as many places as we can possibly put it.”
Since Mr. Falco was named CEO in 2011, Univision has launched three new cable networks and a digital video network. Its joint-venture English- language cable news network with ABC is due to launch later this year.
The expansion has already borne some fruit. Univision reported a $9 million profit in the first quarter, compared with a loss of $14 million the previous year.
Corrections & Amplifications
Univision draws 58% of the Spanish-language prime-time audience in the 18-49 demographic. An earlier version of this article incorrectly said Univision draws 70% of that audience, which is the market share it has along with it sister broadcast network, UniMas.
Categories: NGL News