• by Paul Gough , May 16, 2004

While observers in the general market tussle about network and cable's haul in the looming upfront, there's another part of the TV spectrum that's almost assured to increase when all is said and done: Hispanic TV.

Last year's Hispanic upfront took in about $1 billion of the $3 billion overall Spanish-language television marketplace, further evidence of the explosive growth of Hispanics in the United States and the television networks that serve them. Most experts don't think the growth will slow down in 2004-05, as more networks come into the market, both on broadcast and cable.

"I think we're all expecting a healthy upfront," said Ingrid Otero-Smart, president of WPP's Mendoza-Dillon & Asociados in Irvine, Calif., and a former president of the Association of Hispanic Advertising Agencies.

The marketplace has grown in recent years. While it's still dominated by Univision with its phenomenally popular prime time novellas and other ratings winners, the Spanish-language powerhouse is no longer the only game in town.

Telemundo has been taking on Univision with prime time novellas of its own and heavier investments made since NBC purchased the network a few years ago. And a big-time broadcast network in Mexico, Azteca America, has been making inroads in the United States, although observers say it's still got a ways to go.

Telefutura (another broadcast network owned by Univision) and Mun2 (owned by Telemundo) are also becoming forces in the marketplace. This year, there's also competition in the sports arena between Fox Sports en Espanol and newcomer ESPN Desportes. And for the first time, there will also be two networks targeting young Hispanic males who prefer at least some of their programming in English: SiTV and Voy Network.

Observers say it's likely that the upfront haul will increase 16 percent, with CPMs growing by like amounts. But with Hispanic populations growing all the time, a lot of the concerns that plague the general market--like declining eyeballs and the impact of digital video recorders and video on demand--aren't yet concerns in the Hispanic TV marketplace.

The major concern--one taken to heart by the Association of Hispanic Advertising Agencies--has been that general market advertisers aren't spending enough in the marketplace yet. Many advertisers devote only about 5 percent of their total budgets to the Hispanic market even today, but the AHAA notes that the numbers don't come close to what should be spent.

"We represent 13 percent of the market," Otero-Smart says. "There's a big potential for increases."

Hot categories this year are expected to be packaged goods, telecom, retail, and automotive, among others. But that doesn't mean that everything will be completed in a rush as a lot of the general-market network upfront is done.

The upfront season begins this week with presentations in New York City by many of the major players, including Univision, Telemundo, Azteca America, SiTV, and Fox Sports en Espanol. But the negotiations and the sales will continue through the summer and even beyond, as some of the advertisers don't finalize their marketing budgets until the fall.

Marla Skiko, group director of Starcom's Tapestry Partners in Chicago, says that this year's upfront sees a stronger challenge by Telemundo as its ratings increase. Skiko says that it's been interesting to watch across a lot of demographics, particularly adults 18-49. But that doesn't mean that Univision is going to roll over. Observers expect Univision to make a big splash--to show not only that they remain on top, but that they intend to stay that way for a long time. Expect telenovellas to play a big role in the prime-time planning. It's also going to the first upfront in which Univision Radio--the former Hispanic Broadcasting Corp.--is going to be a factor, which gives Univision a leg up in cross-platform opportunities. Jose Lopez Varela, vice president and managing director of Hill, Holliday Hispanic in Miami, says that everyone will be watching what Univision does.

"I think the next couple of years are going to be critical," he says. "What they do this year and next is going to play a role in who's on top." Lopez Varela says that Univision's telenovellas have been a smart programming strategy for them. Telemundo also programs novellas in the prime time, but Telefutura counterprograms with movies, and that's been working among adults 18-34.

Azteca America provides an interesting alternative, particularly with its sports inventory. But Tapestry's Skiko says that Azteca's success depends on getting more distribution, something that has eluded it so far.

"We're watching them to see how quickly they grow," she says. "They need to get more distribution."

And unlike the general market, there aren't many missing 18- to-34-year-old Hispanic males. Two networks have sprung up to serve them, both in English. The existing network, SiTV, will hold an upfront presentation tonight in New York City. It targets young males with comedy and music programs. VOY, which is scheduled to go on the air later this summer, features more informational programming.

Fox Sports en Espanol has been on cable since 1996, but for the first time this year, it will have competition from ESPN Desportes. Spanish-language media buyers say ESPN Desportes isn't much of a threat to Fox thus far, as it's far behind Fox's distribution. But they also say that ESPN's contracts for Spanish-language coverage of major sports like Major League Baseball means that it will grow stronger as time passes.

This will be the fourth upfront presentation that Fox Sports en Espanol makes to the New York City ad buying community.

"I think that the effect of it has been enormously positive for us. It's helped to put us on the map as far as the Hispanic media-buying community is concerned," says David Sternberg, general manager of Fox Sports en Espanol. "We've been able to tell a great story of distribution growth, ratings growth, and sales growth. This year will be no different." There are 100 consumer advertisers--up from 19 five years ago.

Sternberg says he's not worried about ESPN Desportes, which he acknowledges brings some interesting programming. "We're focused in terms of distribution. We position ourselves as the first--and still really the only full-time--sports channel that reaches and serves the needs of a significant Latino audience," he says.