Clemenseando

Azteca America Scores Largest Audience Ever With Mexican Football Final

Not surprisingly, last Sunday's match between Club América and Pachuca brought Azteca America its highest ratings ever. 1.9 million viewers saw Pachuca win its fifth Mexican Football League championship in a decade.

The popularity of the match underscores the importance of Mexican football coverage to the number four Spanish-language broadcaster. However, the fact that the semifinal match between América and Chivas drew a larger audience than the final suggests that Azteca America still faces distribution problems. Quite likely, not everyone who wanted to see the match could actually do so.

Azteca America relies heavily on low-power stations combined with cable and satellite carriage (See here to read about one such Azteca America television station group.) Univision, on the other hand, enjoys near-universal distribution throughout the Hispanic market.

Azteca America is unlikely to equal the match's ratings with any other show for years to come.

   

Telemundo's Miss Universe Ratings

Telemundo did well with Monday night's airing of the Miss Universe competition, which was also simultaneously broadcast in English on NBCU.

For the first half hour, the Hialeah-based network garnered a 1.0 rating as measured by the Nielsen Television Index or an estimated 1,633,000 viewers. By the final half hour of the two-hour program the number of viewers had increased to 2, 270,000 and a 1.2 rating. These are very strong numbers relative to Telemundo's usual performance. On weeknights, Telemundo telenovelas at 8pm, 9pm and 10pm generally bring in around one million viewers apiece. Occasionally, Zorro and La Esclava Isaura (see here for the latest ratings and here for background on Telemundo and Brazilian Telenovelas) bring in upwards of 1.2 million viewers.

Despite Telemundo's strong showing with Miss Universo, the NBCU-owned network still got beat by Univision.  "Destilando Amor" had more than twice as many viewers in the first half-hour of the beauty contest while Cristina had 400,000 more viewers during the last half hour of Miss Universo.

Those numbers point to the uphill battle Telemundo faces against Univision. The Miss Universe competition is intensely popular throughout Latin America and among U.S. Hispanic. Why? Maybe it is the high number of Latin American finalists and winners. Maybe other factors are at play. I don't know. I do know that the show is an enormously popular franchise among Latinos (for better or worse). And if Telemundo can't beat Univision even with Miss Universo, well, I don't know if there is much hope of any real competition between the two networks. Not a surprise but dramatic nonetheless to see the Univision and Telemundo ratings side-by-side.

What is a bit of a surprise is the number of people that opted to see the show in Spanish rather than English (2,270,000 Telemundo viewers versus 8,344,000 NBCU viewers). I'll request historical data and see if I can't get a sense of whether broadcasting the show in Spanish added new viewers or simply cannibalized audience members from the English-language show.

Either way, from an advertiser perspective, splitting up the audience is probably more attractive and more effective.

 

Ratings For "La Esclava Isaura" On Telemundo

The Brazilian telenovela "La Esclava Isaura" is racking up strong ratings for Telemundo. Not a massive audience but the show is being watched by a good-sized and growing number of viewers. Certainly, it is doing far better than the show it replaced "Sin Vergüenza", which lasted only a few weeks in primetime before being bumped to the afternoon (See here for more about Telemundo and Brazilian Telenovelas).

According to Nielsen Media Research, the first half hour of "La Esclava Isaura" on May 23rd was seen by an estimated 1,083,000 viewers. That number is equivalent to a 0.7 rating on the Nielsen Television Index.

By way of comparison, "Don Francisco Presenta" had more than 3.2 million viewers and a 1.8 NTI rating on Univision during the same time slot. 

"La Esclava Isaura" ratings tend to fall during the second half hour. On Wednesday night, the number fell modestly to 1,049,000 viewers. On previous nights, the drop has been quite sharp. I don't know why.

I also don't know why Telemundo's online forum for "La Esclava" is so thinly populated given the large number of viewers. By the way, this novela is a remake of the original and hugely successful Globo production from 1976. Ironically, I found this synopsis of the original at rival network Univision's Web site.

The remake of "La Esclava" pulled in huge ratings in Chile. There must be something viscerally attractive about the storyline. Or maybe it is the coffee plantation setting, which also worked for the Fernando Gaitán novela "Café, con aroma de mujer".

You can see some clips from the show here and decide for yourself.

Una Vez Más Television Station Group

The following article appeared originally in the January, 2006 issue of Marketing y Medios. The rights have reverted to me and I have reprinted it here because it is a good (although somewhat dated) description of a television station group with an atypical business model built on low-power television stations and programming from TV Azteca. Please contact me if you are interested in reprint rights or an updated version of this article.

Una Vez Más Stations Maximize Low Power (Title as it originally appeared in the magazine.)
By Luis Clemens

JUST SHY OF NEW YEAR'S EVE, Dallas-based TV station group Una Vez Más (UVM) secured a minority investment from Boston-based private equity firm Alta Communications. Proceeds from the deal, along with a credit facility from Wells Fargo Foothill and money from the sale of two signals, means the Azteca America affiliate group now has a little more than $45 million to enter additional DMAs. UVM expects to eventually operate in at least 23 markets representing close to 30 percent of the U.S. Hispanic market.

Not bad for a business that almost didn't get out of the starting gate. In December 2000, UVM CEO Terry Crosby sold his interest in a Los Angeles TV station and planned to take a break from work altogether. Instead, equipped with a tidy sum from the sale, he went in the opposite direction and got back into the TV business "one more time," starting up the aptly named station group Una Vez Más.

Most of UVM's stations are in the Southwest and all of them are low power stations. The majority of the stations are deliberately in markets where Mexicans and Mexican-Americans make up more than 80 percent of the local Hispanic population.

"The content from [TV Azteca in] Mexico is resonating in those markets," says Crosby, a longtime Hispanic radio and TV investor. "What plays in Phoenix does not play in Miami. I look at it as a regional Mexican network serving the largest [Hispanic] population."

The venture got under way in 2002 after Crosby met with Luis Echarte, then-president and now chairman of Azteca America. "[Crosby] really took a chance on us and has been a tremendous distributor," Echarte says. "It has been ideal for us." Azteca America is an all-affiliate network that has rapidly expanded its reach through UVM and other station groups.

The profusion of low power Spanish-language broadcast affiliates over the past couple of years has proven to be an inexpensive way to build distribution coverage. Recent deals include the Caballero sale of low power stations to Viacom for an undisclosed amount (final FCC approval is scheduled for late January), LAT-TV's December launch of a low power Spanish-language station in Austin, Texas, and McGraw- Hill's purchase of a low power station in San Diego to transmit Azteca America's signal. Additionally, Univision, Telefutura and Telemundo each have low power affiliates.

UVM's business strategy boils down to the creation of what Randy Nonberg, Crosby's lawyer and fellow investor, refers to as a "synthetic full power station" in many markets. "[We] take a low power that has a good signal, add [analog] cable and satellite coverage, [then] compete head to head with full power stations at substantially lower cost."

UVM first tested its strategy in Las Vegas, one of only four markets where the firm originally planned to operate. Minority investor Mark Paretchan, UVM's vice president of sales and Crosby's junior high school classmate, says, "You can have a full power in Vegas that covers a lot of scorpions and snakes in the desert, or you can have a low power like we have. You don't have the same must-carry rights [as a full power station], but we also didn't pay $25 million for the station in Vegas. Maybe we spent $3 million to $4 million."

Paretchan says UVM "pays to play" in certain markets, meaning they pay some cable systems to carry their stations. In return, they negotiate favorable channel placement. Paretchan says the negotiation with the cable companies is easier because of the strength of Azteca's programming. The Mexico City-based media company has racked up a few modest ratings successes mainly because of its Mexican soccer league rights and the strength of La Academia, a reality talent show franchise.

But the network is still a long way behind the Univision networks. "The big boys don't see them as competition, and many advertisers won't even look at [low power affiliates]," says Ken Deutsch, media director at Long Beach, Calif.-based Grupo Gallegos. He buys time on low power stations, with restrictions. "Let's not write off low power stations because of their signal strength, [but] don't try and sell me that they are full power."

Paretchan concedes he is having "limited success with the larger national [advertisers]." Instead, UVM focuses on the "low-hanging fruit that is the local and regional retailers."

Salvador de Luna, national Spanish sales director of Bill Heard Chevrolet, a Columbus, Ga.-based car dealership with 18 outlets nationwide, was interviewed by telephone while en route to catch a flight to Las Vegas, where he was going to renew a contract with the UVM station. De Luna is very pleased with the response to the 30-minute infomercials the dealership places on Azteca America affiliates.

"Well, you know, low power doesn't mean anything to me," he says. "What matters to us is results: At the end of the month, what do we get [in sales from] what we put out [in advertising]. UVM works well for us." He also advertises on Telemundo and Univision affiliates but says the "cost per spot is much greater and the results are about the same."

UVM intends to enhance its value to advertisers by launching local newscasts in a few markets in the first six months of the year.

Spanish-language Digital TV (Multicasting)

Spanish-language broadcast television networks have been slow to capitalize on the multicasting (digital television) opportunities provided by their ownership of full-power stations. I know of no TeleFutura, Telemundo or Univision owned-and-operated station that is currently airing a digital signal in addition to their analog channel. (Please correct me if you know otherwise.) This will change by February, 2009 when the digitalization of the broadcast spectrum, by law, must take effect. Meanwhile, though, Univision and Telemundo seem to be focusing their energies elsewhere

Not to say there hasn't likely been internal discussions about what to put on those digital channels but Univision and Telemundo have yet to signal their future multicasting plans, much less announced anything. In SEC filings and in interviews, Univision executives and investors have made clear their intention to charge big bucks for retransmission fees. No mention anywhere, though, of multicasting. Last year Telemundo executive Steve Mandala told me in an interview for a Multichannel News article that a multicasting strategy was being formulated. Nothing yet, though. Telemundo seems much more focused on its broadcast, cable, interactive and even wireless efforts than multicast.

The absence of a current multicasting effort by Telemundo and Univision is understandable but short-sighted. Both networks could cheaply and quickly opt to launch a 24/7 telenovela digital channel. They could run a Spanish-language kids network such as Discovery Kids en Español or Sorpresa! on a barter basis and bring in some additional revenue. And help build a future audience (for more about Spanish-language children´s programming see here or here to learn about Univision´s fine for violations of the Children´s Television Act).  Launching a dedicated sports and/or news digital channel is also an option but would require a significant investment without an immediate payout.

And there is no immediate payout because no one is yet sure about the economics of Latino multicasting. No one knows how many Hispanics already own digital television sets. Telemundo and Univision are busy trying to interest advertisers in reaching large and measurable numbers of Latino viewers. There are set rate cards and lots of money to be made selling thirty second spots and product placement on analog but what the heck do you charge an advertiser for a commercial on a multicast channel.  Admittedly, the low-hanging fruit consists of closing the gap between what advertisers spend on English-language television and what they spend on Spanish-language. But, Telemundo and Univision expend plenty of effort selling interactive advertising for what remains a modest revenue stream.

Besides February, 2009 is not that far off, which explains why other Hispanic networks are pushing into multicast. The pioneer was Trinity Broadcasting Network's TBN en Español service. TBN was aggressive from the get-go about making all their networks available as multicast channels. They wanted to increase distribution and have employed individual church-based marketing to win new viewers for the Spanish-language service. Granted, TBN is viewer-supported and doesn´t have to worry about selling ads on multicast. Still, theirs was an impressive and early effort.

Next in line came Latino youth network LATV, which inked a multicast carriage deal with the Post-Newsweek Station Group a few months ago. The deal was, in part, the result of frustration after years of not securing wider cable and satellite distribution. Dealing with television station groups and even individual station owners is far quicker and less laborious than dealing with MSOs as a group and with their individual systems. And it also helps when the owner of the multicast network also happens to head a television station group, which is the case with LATV majority shareholder Walter Ulloa who is also the Entravision CEO and board chairman. Entravision just announced it will carry LATV as a multicast network in ten markets.

The last of the Hispanic multicast networks for now is V-me TV, which is a Spanish-language digital broadcaster majority-owned by a group of private investors with a minority investment by the Educational Broadcasting Corp. that is the licensee for New York City PBS affiliate WNET. V-me TV serves as a multicast channel for PBS stations throughout the U.S. (its imminent launch prompted some controversy in Maryland). Wherever a PBS affiliate decides to carry V-me TV as a multicast channel, the network then becomes automatically available on cable thanks to a standing arrangement with the NCTA.

And that´s all, no one else in the Hispanic television market has really done much with multicasting.

Univision and the other Spanish-language broadcast networks are rightly organizing citizenship and voter education campaigns. As a matter of self-interest, they might want to consider a campaign to educate viewers about the upcoming switch to digital television. For that matter, the Consumer Electronics Association might want to translate their recycling Web site (see here for a good LAT article on the topic).

Unlike Mexico where the digital switch won´t take place until 2023, in the States the clock is ticking.

 

 

Spanish-language Local Television Newscasts Said To Increase Voter Turnout

The mere presence of Spanish-language local television news significantly boosts Hispanic voter turnout, according to a year-old working paper co-authored by Felix Oberholzer-Gee and Joel Waldfogel. (Posts from last year by other bloggers can be read here and here) 

The study finds Hispanic voter turnout is "about 41 percent" in non-presidential elections in areas with Spanish-language local television news compared to Hispanic voter turnout of "about 30 percent" where there is no local newscast en español. The results for presidential elections is less significant but still large at 54 percent compared to "about 46 percent".

This is a working paper not a published article in a peer-reviewed academic journal but the findings are statistically robust. And they make sense, too.

Local newscasts on Telemundo and Univision typically dedicate more time to local election coverage than their English-language counterparts, in my experience. In addition, local Spanish-language stations have been running voter registration and citizenship drives for decades. The combination of heavy local election coverage combined with station-organized civics campaigns was bound to make a difference. This is the first time, though, I have read of anyone quantifying just how much of a difference. And it sure represents a big jump in Hispanic voter turnout of more than a third in non-presidential elections and a sixth in presidential elections.

That said, as the authors acknowledge, there may be other reasons which help explain the variation in voter turnout (See here for other possible explanations). They use a figure of 350,000 Hispanics as the minimum population size necessary to sustain a local Spanish-language newscast.

Definitely worth a read even if the regression analysis is heavy-going for the uninitiated. Particularly interesting in light of the discussion over Univision's citizenship drive.

 

Te Amaré en Silencio - "An Expensive Lesson"

Miami Ad Guy's mention reminded me of "Te Amaré en Silencio", which was a failed attempt by Univision at producing telenovelas in-house. I wrote about the novela in the May, 2005 cover story of Marketing y Medios.

Below is an excerpt:

"In an apparent attempt to regain control and following an earlier spat with Televisa, Univision experimented with in-house production.

Te Amaré en Silencio was a telenovela that premiered on Univision in December 2003. It was shot in Los Angeles and produced by Paloma Productions, which is owned by a Perenchio holding company. It reportedly cost $6 million and lasted all of two months in prime time before being bumped to a daytime slot. According to a Univision SEC filing, in 2003 Paloma Productions received $1 million upfront to produce the novela and expected to receive an additional $4 million based on ratings performance. But the 2004 SEC 10-K filing revealed Univision's actual payout to Paloma Productions for the novela totaled $2.6 million (including the $1 million from the prior year), far less than initially projected because ratings were weaker than expected.

None of those familiar with the unsuccessful venture who were contacted for this article would comment on the record. A source tried to explain why Te Amaré en Silencio failed, at least, compared to the Televisa-produced telenovelas. "My wife said, 'This is a man's idea of a novela because of the fact this guy gets to run around sleeping with anybody he wants. He's an adulterer. Even though the wife was a psychotic bitch, they were married,' " he recalls, his wife saying. "You laugh, but Televisa would never make that kind of mistake. [Perenchio] just missed that core cultural cue. Everybody learned their lesson, an expensive lesson."

Hispanic TV Upfront - Fluff and Little of Circumstance

A Spanish-language television executive gently chided me yesterday for my coverage of last week's Hispanic Television Upfront in New York. The executive implied I unduly downplayed its significance. In last Wednesday's edition of the email newsletter Hispanic Television Update, I wrote:

"Little will be truly new at this year's Upfront. Sure, there will be the usual batch of distribution and programming announcements. But, also as usual, a good number of the shows announced at the upfront will never make the jump from press release to on-air."

I stand by what I wrote.

At the Upfront, liquid refreshments abound but any other kind of substance is scarce. What substance there is amounts to a question of image. What does abound is talk, talk, talk about shows that may or may not materialize. Not surprisingly, much of the resulting coverage is bubbly. Such as the ´news´ that J-Lo came up with the idea for her forthcoming Univision show while taking a bath.

The real news lies in the questions that network executives won't answer at the Upfront. It lies in what shows are canceled. And it lies buried deep inside an SEC filing that specifies how Univision CFO's six bedroom, nine bathroom Beverly Hills residence (but not the Beverly Hillbillies residence where Hobson's former boss A. Jerrold Perenchio lives) is being bought by the network for $9.6 million as part of a relocation package.

There was no real news made during the Hispanic television upfronts but there was plenty of advertising and spin and silence in the face of inconvenient questions.

I find Stephen Jay Gould's concept of punctuated equilibrium useful in explaining the stop-and-go development of Spanish-language television over the past forty-odd years. The last major event that prompted significant changes was General Electric's purchase of Telemundo. New ownership brought new ideas about in-house production and product integration. Ideas that have had a decidedly mixed performance but have undoubtedly re-shaped the Spanish-language television market. This year's Upfront simply won't be remembered for having accelerated the industry's transformation.

For that, everyone will have to wait for the upcoming federal jury trial that pits Televisa against Univision. The trial will take place in Los Angeles and is scheduled to start on Halloween. At stake, is the program licensing agreement between the two networks whereby Televisa provides Univision with the vast majority of its primetime lineup.

If, and this is a very big if, the trial results the termination of that programming agreement, then Univision would be forced to dramatically change how it conducts its business. The entire Spanish-language television business would change. Maybe for the better, maybe for the worse. The other possible outcome of the trial is simply a ratification of the program licensing agreement. Or perhaps both parties will settle and skip the trial altogether. There are an awful lot of ifs and maybes hanging over Univision's future

Azteca America Affected By Cruz Azul's Decision To Field An Ineligible Player

Mexican media outlets have been buzzing with indignation over the decision of Liguilla semifinalist Cruz Azul to field Santiago Carmona in last Thursday's match against Pachuca. On Wednesday, Carmona had received notice of a lifetime suspension by the Court of Arbitration for Sport tribunal for repeated doping violations. The Mexican Football Federation (FMF) and the club had also been notified. Carmona sought and received an injunction from a federal judge stating the ban could not immediate effect. Based on the judicial action, which came through prior to the start of the match, Cruz Azul went ahead and fielded Carmona. And then all hell broke loose when the story hit the media.

There was widespread indignation by national sports commentators. No one was buying the argument put forth by the club president that the Tribunal had put the wrong date on the letter and that besides, the letter was in English. The Federation punished the club's decision by preventing it from playing tomorrow's scheduled semifinal match. Pachuca (my favorite Mexican football club) automatically advances to the finals against the winner of the América-Chivas match. Pachuca had soundly defeated Cruz Azul 3-1 last Thursday. (And that one goal was the product of a dubious red card that may well be overturned by the Federation's disciplinary committee.)

Cruz Azul's penalty implies not only a premature end to its season but a heavy out-of-pocket expense. The club will have to compensate Pachuca for lost ticket revenue and TV Azteca for lost advertising revenue. Azteca America would have benefited from transmitting the second semifinal match between Cruz Azul and Pachuca. It would have brought in high ratings and been paired with the Chivas-América match.  Cruz Azul's decision to shoot itself in the foot will somewhat diminish the benefits that Azteca America was expecting to reap from the Liguilla semifinals.

Not a major loss but a minor setback for a Spanish-language television network that needs every strong ratings performance it can get.

New Day at Univision?

Meg James of the Los Angeles Times is one of the few reporters at a major newspaper who routinely cover the business of Spanish-language television (Christina Hoag at the Miami Herald and Miriam Jordan are the others and all three do outstanding work).  Ms. James provided particularly insightful coverage of Univision's sale.

In yesterday's LAT, Ms. James reported Univision's "new owners threw a coming-out party here Wednesday that made clear that the Spanish-language network has bid adios to its tight-lipped ways."

Unfortunately, there is still plenty of evidence that suggests otherwise. That said, Ms. James is right to report on how CEO Joe Uva's Upfront appearance does mark a sea-change in how the network interacts with the outside world.  It is just that Univision is still very secretive when compared to the other television networks. And the network routinely ignores and refuses to answer inconvenient questions.

Univision still won't say who is its board chairman, still won't answer questions about its children's programming advisory committee and still won't talk about online transmission rights. It won't make executives from its cable network Galavision available for interviews. It refused my request (made before the sale was finalized) to interview the co-head of sales because the article was not exclusively about the Upfront. McCauley was interviewed by several other journalists for articles exclusively about the Upfront.  And you can forget about asking about anything related to Univision's programming dispute with Televisa that is headed to a federal jury trial in late October.  One reporter notes Univision CMO Maryam Banikarim told the assembled journalists at a xx press conference to  "please abstain  ...".

The trial is crucial because the outcome will likely determine whether Televisa can end its its program licensing agreement with Univision. The agreement is vital to Univision because Televisa provides the U.S. network with its most successful telenovelas and football matches. Televisa's support is also necessary for coverage of Mexican celebrities, which is daily fodder for shows like El Gordo y la Flaca and to a lesser extent is important for the popular programs such as Sabado Gigante, Don Francisco Presenta and Cristina as well as for the network's popular awards shows. Despierta América. Televisa's support is important for Univision's newscasts and sports programs as well.

Hence, I am guessing, Ms. James' decision to close her piece with the following graf

After Wednesday's presentation, Saban buttonholed Televisa's top business executive in the hall behind the stage. "See, we are getting along," he said. "Haim Saban and Televisa — we're not fighting."

All in all, Ms. James has written a good piece and one that is notably absent from the New York Times. I just would say that proof of Mr. Uva's contention "that there is a new day dawning at Univision" is still a good ways off. And skepticism is still called for. We'll see if Mr. Uva is still regularly talking to the press in six months without important topics being off-limits.

If so, then we'll all be able to say with much more certainty that Univision has bid farewell to the Perenchio school of media relations.