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All Fired Up

Telemundo bets on original shows, NBC support to fuel future 3/21/2004 07:00:00 PM Eastern

Telemundo executives carry the fervor of true believers. And the muscle of NBC. In the two years since the Peacock network bought the struggling enterprise, ratings have soared.

Now faith has a new handmaiden: ambition. Telemundo aims to narrow the enormous revenue gap between it and Univision, the long-recognized leader in Spanish-language TV. It also wants to become a player, fulfilling new CEO Jim McNamara's dream. "Our mission is to be the
network for U.S. Hispanics," he says, "and we will reflect that in everything we do: our novelas, our news shows, our daytime lineup, our sporting events."

He sold Ramon Escobar, who left NBC to join him. "Telemundo is the future," says Escobar, executive vice president of programming. "Three-fourths of Univision is repurposed from Televisa. Telemundo is created for a U.S. audience. Our competitors don't do that." And hola!
Hispanic-American audiences are hip to the new programs.

Prisionera, which debuted March 10, is averaging a 4.4 rating among adults 18-49, making it the second-highest–rated novela
in Telemundo's history.

During February sweeps, the network posted a 4.4 rating at 7 p.m., up 144% over last year; in a record-setting performance, Pasion de Gavilanes
averaged a 5.0 during the weeks of Feb. 2 and Feb. 23. At 8 p.m., the network increased 74% over last year, with
Amor Descarad
hitting a new high when the novela
concluded. Another success story is the 9 p.m. slot. El Alma Herida
averaged a 3.5 rating, an increase of 17% over last year.

Bottom line: From February '03 to February '04, Telemundo logged a 59% jump in impressions and a 41% boost in share of Spanish-language TV in the 18-49 demo. Univision, on the other hand, saw impressions drop 9% and share decrease 18%. These aren't just dry stats. This is proof positive to McNamara that Telemundo is on a roll.

"Telemundo will be the growth engine for NBC," Escobar predicts. Of course, the fuel that feeds the engine is money—and NBC is flashing it at Univision stars, luring some of the network's biggest talent.

A huge coup for Telemundo was enticing Mauricio Islas, a hunky novela
actor, to star in its 8 p.m. hit Prisionera. Another émigré, a top Univision weathercaster, was tempted with a deal that included five appearances on NBC's weekend edition of Today. And thanks to sharing casting departments, stars do double duty. Silvana Aries, a female star on Amor Descarado, was cast on NBC soap Passions.

Clearly, the ability to leverage the NBC brand in tandem with Telemundo's evolution is a seductive package. The crossover appeal doesn't rest solely with entertainers. News staffers Maria Celeste and Angie Sandoval have appeared on Dateline
and Nightly News Sunday, respectively.

Admittedly, Telemundo is playing catch-up with Univision. But McNamara sees progress: coverage in 118 markets, reaching 90% of total Hispanic viewers. Plus, NBC recently acquired Spanish-language stations in Phoenix and Tucson, Ariz., and Fresno, Calif., expanding Telemundo's O&O reach.

McNamara's secret weapon? Original programming.

In 2002, Telemundo had a limited supply of high-quality product and an old programming strategy: Just grab foreign acquisitions. NBC's purchase of the Spanish-language network in April of that year changed everything. Today, Telemundo creates 75% of its prime time programming in-house, touting simple, well told stories with broad appeal—in a Spanish that neutralizes regional Latin American and Mexican dialects—and produced with an emphasis on U.S. Hispanic experiences. More than mere entertainment, the novelas
focus on themes relevant to viewers.

"We have young characters dealing with learning English in school. We have families struggling with immigration, date rape, and drug use (El Alma Herida), peer pressure, domestic violence (Amor Descarado)," says Escobar. In fact, Telemundo writers are routinely sent to Los Angeles to ensure Hispanic "flavor" and to the Centers for Disease Control and Prevention in Atlanta to document Hispanic-skewing health issues. Attention to detail is the network's signature.

The back story to the numbers is, in part, the growing visibility of Hispanics in the U.S. "The Hispanic-American audience is changing and evolving," says Executive Vice President of Sales Steve Mandala. "It's now 14% of the entire U.S. population. By 2020, it will be 53%. Where once we delivered a highly targeted niche, now we're a must buy. We're 40 million strong, increasingly better-educated, and with a growing income."

Which is why both political parties are courting this key demo. And why McNamara stresses his Get Out the Vote initiative. In the recent Democratic primaries, Telemundo's Maria Celeste and NBC's Lester Holt teamed up to host the Black/Brown Debate. This summer, Telemundo will tap into NBC coverage of both the Democratic and Republican conventions as well as election coverage in the fall.

A second area of heightened coverage is sports. The NBC connection will allow Telemundo to offer the U.S.'s first Spanish-language coverage of the Summer Olympics. "Various NBC networks will have pieces of Olympic coverage," McNamara explains, "and Telemundo has targeted sports of particular interest to our Spanish-speaking audience: soccer, baseball, boxing. And not repeats of NBC coverage: We are offering special and unique presentations."

All of which is drawing advertiser interest.

According to TNS Media Intelligence/CMR, advertisers spent $9.2 million on Telemundo in 2003 and $1.3 billion on Univision.
Though still lagging the category leader, Telemundo is making progress. It averaged rate increases of 11% in the 2003 upfront, and some agency insiders see gains as high as 30% this year.

Both networks are scrambling for a lucrative marketplace.
Mandala points out that Hispanic-Americans are driving new-home purchases. "They represent 9% of all home-improvement sales in the U.S. That represents $9 billion. We predict that will grow to $23 billion in 2012, or 12.5% of all dollars spent in that category." And growing Hispanic affluence means growing ad dollars in such categories as insurance, furniture, health care, cars, and mortgages.

"Telemundo is a blank slate. And we believe we are charting the future," says McNamara. Escobar agrees: "There's a real pioneering spirit here."

March