• by Alfredo Alonso , June 9, 2006

There are few demographics with greater promise to marketers than 18- to-34-year-old Latinos. The Hispanic population is the fastest-growing segment in the United States, and a second generation of stateside-born Latinos is gaining more and more disposable income every year. In 2005, shipments of Latin music increased 13 percent for a retail value increase of 14 percent over the prior year, according to the Recording Industry Association of America. As this rise was driven in part by growing demand for Reggaeton, why is there still doubt among music professionals that Reggaeton and niche-Spanish formats like it have staying power?

Reggaeton (pronounced reggae-TONE) is a fusion of Salsa, Hip-hop, and Rap that originated in Puerto Rico in the late '90s. Reggaeton gained a great deal of popularity and credibility over the past few years behind the success of pacesetters Daddy Yankee, Don Omar, Shakira, and others. Daddy Yankee, the unofficial ambassador of Reggaeton, held the top spot on Billboard's Latin chart as recently as last month, was named Songwriter of the Year at the ASCAP Latin Music Awards in March, and took home three 2006 Billboard Latin Music Awards for top Latin album artist, top Reggaeton album, and Reggaeton song of the year.

But skepticism remains. As recently as MidemNet 2006--an international music industry event held in January--executives speculated on multiple occasions that niche-Spanish formats are merely "the flavor of the day." Evidence indicates otherwise.

Success in New Formats

Take, for instance, Hurban--which stands for urban with an "H" for Hispanic--a radio format where bilingual DJs play a mix of upbeat, Spanish-flavored pop music. The format relies heavily on Reggaeton. At Clear Channel, we are seeing remarkable traction with Hurban stations. KLOL-FM in Houston, America's first Hurban-formatted station, increased its average quarter hour (AQH) audience share by 42 percent after introducing the format in November 2004. Albuquerque's KABQ-FM flipped to the format and went from #15 to #6 in the market after achieving an increase of 126 percent in AQH share among the highly coveted 18-34 demographic. WMGE-FM in Miami flipped to Hurban, and in February 2005 saw an 85 percent increase in AQH versus the former format as measured by Arbitrends.

The Hurban format is not an anomaly. Other niche-Spanish formats have recently gained momentum as well. La Preciosa--a Clear Channel format featuring Hispanic songs from the '70s, '80s, and '90s and catering to the Hispanic adult 25-54 audience--has exceeded expectations. KEGL-FM in Dallas, for example, launched the La Preciosa format in August 2005, defeating long-time leaders KLNO-FM and KESS-FM in its target audience to become the number one-rated station for listeners ages 25-54. Comparable successes have been seen in San Jose, San Diego, Tulsa, and Las Vegas. The format has been so successful that we launched it as a network nationally.

Like Clear Channel Radio's Hurban, Super Estrella--a format launched in the late '90s by Entravision Radio--features the latest Spanish-language pop/rock music mixed with some Reggaeton. Super Estrella has consistently been THE platform for today's Latin crooners to reach the young Hispanic music lover. Super Estrella is found not only in L.A., but in markets that are fast-growing. Its success in those markets reflects the growth of the Hispanic community in second-tier markets. In Sacramento, for example, the top-rated Hispanic station in 2005 was Super Estrella, according to Arbitron's survey.

Why the Success?

Quantifying successes like these perks the ears of advertisers and broadcasters alike, but the equally compelling aspect of this trend is "why?" The skeptics of niche-Spanish formats have often said the demand for targeted Hispanic formats was limited to Tropical and regional Mexican formats. For a time, this argument held water, but with the Latin population exploding and diversifying as intensely as it has, conventional formats no longer meet the needs of new niche markets.

In terms of sheer numbers, consider for a moment that half of the nation's population growth since 2000 has been in the Hispanic population, according to a recent Brookings Institution report. The Hispanic population is diversifying, too. What was once represented almost wholly by Mexicans and Puerto Ricans is now joined by Dominicans, Colombians, Panamanians, Venezuelans, and many more. Now consider how the Hispanic population is adapting U.S. characteristics; more than half of Hispanics in the United States were born in another country, but 88 percent of Hispanics younger than 18 were born here, according to the Pew Hispanic Center. Second-generation Hispanics represent a new cultural landscape--one that blends aspects of their parents' homelands with new, American-influenced nuances.

It is not, however, demographical shift alone that explains the achievements of these new radio formats. Success on the radio has and always will come down to product. Hurban, La Preciosa, Super Estrella, and others have injected new life into airwaves that were stagnant for too long, and revived music spending as indicated by the wholesale value of Latin music shipments, which totaled $463.8 million in 2005.

The Hurban format, for example, taps into a wealth of innovative Reggaeton talent that would not have otherwise found its way to American airwaves. In fact, Reggaeton stars like Daddy Yankee, Don Omar, and Shakira have shown remarkable crossover appeal, taking listenership from seemingly noncompetitive stations. As national media buys are based on efficiency, and with buyers trying to reach Cubans, Colombians, and Mexicans simultaneously, a crossover artist like Shakira--who lends herself to an English-language campaign--can help stretch media budgets.

Hurban and like niche-Spanish radio formats are here to stay, and those who ignore their promise are doomed to miss out on a gold mine.

Alfredo Alonso is senior vice president of Hispanic Radio, Clear Channel Radio.