If you can't join 'em, beat 'em
When Azteca America launches next year as the third U.S. Hispanic broadcasting network, it will probably get its clock cleaned by dominant Univision, the way Telemundo does quarter in and quarter out. According to Nielsen's Hispanic Television Index, Univision garnered a 53% share of Hispanic viewers 18 to 49 for the calendar year 1999. Of the four major networks, all but CBS collected a higher share of the Hispanic 18-49 audience than Telemundo.
At launch next spring, Azteca America will have 55% to 60% coverage of the U.S. Hispanic population, compared with 92% for Univision and 85% for Telemundo. Univision is on track to generate $830 million or more in revenue this year, or roughly 75% of the $1.1 billion U.S. Hispanic TV advertising pie. It's not surprising, then, that Azteca America executives told Wall Street analysts that they think they can bump the weaker Telemundo off in a couple of years and then go after Univision.
Telemundo, though, continues to fight the good fight. Last year, it brought in new management, and reports surfaced last week that it's trying to strengthen its distribution with the proposed acquisition of a second station in Los Angeles, KWHY-TV. For TV Azteca, it's a case of if you can't join 'em, beat 'em. The Mexico City-based network tried to acquire Telemundo several times in 1997 and 1998 before starting talks with Pappas early last year.
Asked about his comments to analysts, Azteca America chief Harry Pappas said he thinks growth in the Hispanic ad market-at least 15% a year for the foreseeable future will "lift all boats. There's more than enough room for them and for us."