Big Four TV Networks Get A Wake-Up Call -- In Spanish

(From The Wall Street Journal -- By Brooks Barnes and Miriam Jordan)

What network is frequently No. 1 in attracting young adults in prime time this television season? Actually, make that Número Uno.

It is UNIVISION, the Spanish-language broadcaster based in Los Angeles, which by various measurements has long been gaining on ABC, CBS, Fox and NBC -- the so-called Big Four broadcasters. But this season is shaping up to be a watershed year. On 19 nights since the season began in September, UNIVISION has ranked No. 1 among the 18-to-34-year-old viewers that advertisers pay a premium to reach, according to NIELSEN MEDIA RESEARCH. Last year, it never finished first. Two-thirds of the time this season it has displaced at least one of the Big Four -- a threefold increase over last season.

The Big Four have been losing viewers, particularly younger ones, to cable networks, videogames and the Internet for years. Now, include Spanish broadcasters as a threat. According to Nielsen, 19% of the U.S. population aged 18 to 34 describes itself as Hispanic. The young Hispanics flocking to UNIVISION are for the most part bilingual, which means they are tuning in because the programming appeals to them -- not just because the actors speak Spanish. "Older viewers watch Spanish broadcasters because it's the only language they speak," says FELIX GUTIERREZ, a professor at the University of California's ANNENBERG SCHOOL FOR COMMUNICATION. "With younger Latinos, it's increasingly a choice."

That spells trouble for the Big Four, which are spending more time studying UNIVISION's schedule and figuring out ways to attract its audience. Some high-ranking executives at the traditional networks, at least privately, say they are concerned about UNIVISION's growing dominance in big cities where they own highly profitable local stations. With Nielsen research showing young Hispanics spend more time watching TV than their counterparts, and the Hispanic population in the U.S. exploding, the big networks are waking up.

It is no coincidence, for example, that the smash prime-time soap DESPERATE HOUSEWVIVES on WALT DISNEY COMPANY's ABC has two leading Hispanic characters. NEWS CORP.'s FOX makes certain there are songs that appeal to the demographic in the catalog available to AMERICAN IDOL contestants. GENERAL ELECTRIC CO.'s NBC incorporates Spanish dialogue into its soap PASSIONS and is trying to hire actors who have become stars on its TELEMUNDO channel. The network says it just signed a talent deal with GENESIS RODRIGUEZ, an actress on TELEMUNDO's PRISIONERA, a prime-time drama of the genre Spanish speakers call telenovelas.

"We are hoping she will bring her TELEMUNDO fan base to prime time on NBC," says MARC HIRSCHFELD, NBC's executive vice president of casting. TELEMUNDO, still a distant No. 2 to UNIVISION but trying harder, captures an average total audience of 971,000, compared with UNIVISION's 3.7 million. According to Nielsen, TELEMUNDO's overall prime-time ratings are up 4% to date this season compared with last year, while UNIVISION's are up 11%.

UNIVISION would like to translate its improved ratings among younger viewers into more ad dollars. Last year, industry experts estimate the network roped in about $850 million in ad commitments in the TV industry's May "upfront" market, an increase of about 15%. But the Big Four each pulled in between $1.6 billion and $2.9 billion in commitments.

This year, UNIVISION President RAY RODRIGUEZ says he expects his upfront haul to be in the neighborhood of $1 billion, partly because UNIVISION has exclusive Spanish-language rights to broadcast the WORLD CUP soccer tournament. "When the eyeballs are there, the money follows," he says. "We're going to get a big piece of the general market's money this year."

Some prominent media buyers aren't so sure. Many attribute UNIVISION's growth to a constant stream into the U.S. of blue-collar immigrants, who have little education, no English and limited buying power. "I haven't had a single client come to me and say UNIVISION is doing so well that we need to move money there," says DANIELLE GONZALES, vice president of STARCOM MEDIAVEST's TAPESTRY, a Chicago firm that specializes in multicultural advertising.

As for siphoning ad dollars from an ABC or a FOX, Ms. Gonzales says UNIVISION isn't yet a meaningful threat. The channel attracts 5% of all TV viewers in the country yet receives only 2.5% of all ad dollars, according to industry estimates.

"Spanish is sucking money away from English broadcasters," says Ms. Gonzales but it's a mosquito biting an elephant."

While improving its competitive position, UNIVISION's biggest attractions -- music specials and telenovelas -- still don't come close to beating the biggest English hits. The finale of UNIVISION's telenovela RUBI recently drew a big audience -- 3.1 million adults aged 18 to 34 -- beating its English-language competition. But the top-rated CSI: CRIME SCENE INVESTIGATION on VIACOM INC.'s CBS draws 4.4 million viewers weekly in that sought-after demographic group.

UNIVISION is still under the radar at some ad agencies -- only 151 of the nation's top 300 advertisers are clients -- and some media buyers complain that the network can be a bit arrogant in its Spanish-language dominance. JERRY PERENCHIO, UNIVISION's chairman and biggest shareholder, shuns the spotlight and is widely known to keep tight controls on what executives can say publicly.

UNIVISION typically needs years, not weeks, to convince new advertisers that they should buy airtime. According to people close to UNIVISION, it took the network more than two years to persuade WENDY's INTERNATIONAL INC. to bet on UNIVISION to sell hamburgers to Latinos, and nearly that much time to get pharmaceutical giant MERECK AND COMPANY on board.

To persuade MERECK to advertise its blockbuster cholesterol-lowering drug ZOCOR on the channel, UNIVISION commissioned a study spelling out the need for the drug in the Hispanic community, which has a high incidence of diabetes (diabetics are prone to cholesterol-related heart disease); the potential for selling the drug to Hispanics; and the projected return on invested ad dollars.

UNIVISION says it finds the fight for ad dollars particularly frustrating because independent market surveys consistently show it wields enormous influence over its audience, generating more trust from U.S. Hispanics than the government and the Catholic Church.

Says EFRAIN ROMO, an executive at LA AGENCIA DE ORCI, a Los Angeles ad agency specializing in the Latino market -- "The community doesn't just tune in for news and entertainment. They also look for guidance on just about everything."