Fox's Brave New Mundo

News Corp. is betting big to take a bite out of $1 trillion-plus in U.S. Hispanic spending power
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Fox famously did it before—making a new network pop way back in 1986, when the TV pundits said the American public was fine with three broadcast networks, thank you very much. The company succeeded then by being aggressive, being innovative and being edgy—a strategy that later become known, quite simply, as “Fox attitude.”

And Fox is at it again—taking the fight to the well-established Spanish-language giants in officially launching the broadcast network MundoFox on Aug. 13 (after an Aug. 1 soft launch). Chase Carey, News Corp. president and COO, is acutely interested in making sure MundoFox reaches the booming U.S. Hispanic population—its viewers, and the increasing array of marketers that clamor to reach them.

“The Hispanic segment is a truly under-developed, unique, exciting opportunity in the U.S.,” Carey said in an interview with B&C. “We like that marketplace; we think there’s real opportunity [there].”

Some might wonder if after the acrimonious af! liate wars fought between the Fox network and several partner stations around the country the last few years, local TV executives would be at the very least cautious about partnering with the notoriously bare-knuckle negotiators at Fox. But that wasn’t the case, as the company has built a stable of 50-plus affiliates for MundoFox, which will offer a nightly newscast, a lineup of lively sports, and comedies and slick dramas from Colombian hitmaker partner RCN.

In fact, while any affiliate with a network on the cusp of launch is brimming with optimism, MundoFox’s station partners seem extraordinarily pumped to be part of the Fox family.

“I have a very high regard for their ability to launch things and be successful,” said Phil Hurley, executive vice president and COO of London Broadcasting, which airs MundoFox on four stations in Texas. “And you don’t have to be a genius to notice the Mexican-American population is just booming here.”

Spreading Like Wildfire

The 2010 Census offered concrete evidence of what the Hispanic media community had been saying for years: To not connect with the Spanish-speaking populace is to be out of touch with an enormous chunk of the U.S. population. The Hispanic population increased by 15.2 million between 2000 and 2010, according to the Census, representing well more than half of the total U.S. population increase during that time. Almost 51 million U.S. residents were of Hispanic or Latino origin in 2010—accounting for 16% of the U.S. population.

The numbers are growing fast. The U.S. Census projects 132.8 million Hispanics in 2050—which would represent a whopping 30% of the U.S. population. Nielsen Media Research says Hispanic buying power was $1.1 trillion last year and is on track to reach $1.5 trillion in 2015.

Fox is reported to have put $50 million into MundoFox’s launch, a figure that Carey neither disputes nor confirms. While Fox’s cable networks represent a faster-growing piece of the portfolio, Carey says broadcast is the right pipe for MundoFox. “The breadth of reach of a broadcast network [can be] the foundation of a broader group,” said Carey. “If you look at Fox today, the network is the pinnacle of our cable group. They all fit together, but the ubiquitous reach that comes with broadcast is a great franchise to build from and really be the anchor. We thought a broadcast network is the right foundation, and [we] think the market is big enough to support it.”

MundoFox is, to be certain, moving into a very competitive space. Besides the broadcast behemoths Univision and Telemundo, there are Spanishlanguage players across a variety of broadcast, digital and cable platforms, including Azteca America, Estrella TV, Galavision and new cable channels from Univision focused on sports, news and telenovelas. Ed Krampf, COO of Adelante Media Group, which airs MundoFox in three markets, believes it offers a unique value proposition. “They’re looking to seize a different kind of opportunity— second, third and fourth-generation Hispanics,” Krampf said. “They think the entire group can be served much better.”

Fox will, true to character, do it their own way. Hernan Lopez, president and CEO of Fox International Channels, says there will be “teleseries”—more dramatic and less campy programs than telenovas, such as crime drama El Capo, that appeal to men as well as women, and a younger variety of both. There will be a 6 p.m. newscast produced at Meruelo Media’s KWHY Los Angeles, out of a joint newsroom; respected former Univision news veteran Jorge Mettey oversees news for MundoFox. Primetime starts at 7 p.m., there will be comedies at 8 p.m. each night, and some Fox hits—including the likes of Bones and American Dad—will air in dubbed Spanish versions each week on the network.

“Spanish-language television today looks very much the same, with a big overreliance on telenovelas,” says Lopez. “We’ll have them too, but that’s not our bread and butter.”

Lopez is quick to point out the number of affiliates—a mix of full-power and low-power stations, along with a handful of dot-twos—owned by minorities. The station partners use words such as edgy, innovative, fresh, daring and current to describe Mundo’s content. At the MundoFox upfront presentation this past spring, president Emiliano Saccone told the crowd the network will not succeed by trying to out-Univision Univision—it will win by doing something completely different.

“I’ve been in the Spanishlanguage television business since 1981, and I’m very familiar with the quality of programming over the years from the Telemundos and Univisions,” said Wayne Casa, general manager at KFWD Dallas. “The quality of the product from Fox and RCN is stellar.”

The affiliates know well of the bloody retrans battles between network and affiliates over on the Fox side, but they say Fox brass has worked hard to gain their trust. An unproven network’s leverage in extracting retrans cash from subscription TV operators is minimal, meaning those negotiations may be a few years off. “They’ve been very supportive and very responsive,” said Casa. “With the kind of resources they put up, you can put up with a little bickering now and then. They are ponying up big-time.”

Carey said those well-publicized spats were not an issue as MundoFox set out to sign up partners. “By and large, there was a recognition that there is a real opportunity to build up a network for this audience,” he said.

0806 Cover Story Taking Mundo Chart

Getting to Know You

The station partners were invited to Los Angeles June 12-13 for a full day of MundoFox brie! ngs on topics such as sales, marketing and news; around 50 affiliates were represented on the Fox lot. Hurley brought all four of his general managers running the group’s MundoFox affiliates. “We were unanimous: The quality of the shows was better than we expected,” Hurley said.

MundoFox has signed up bluechip marketers including Toyota, L’Oreal and T-Mobile as “charter sponsors,” and Lopez said advertiser commitments exceeded MundoFox’s upfront budget a few weeks before launch. The network recently signed up Phillip Woodie, former VP of multicultural sales at Comcast spotlight, as senior VP of national spot sales.

Affiliates see Fox’s investment in the Spanish-language space as a resounding endorsement of the Hispanic community’s clout in the U.S.

“Fox recognizes, validates and certifies that Spanish-language media is here to stay,” said Otto Padron, president/COO of Meruelo Media, which will air MundoFox in Los Angeles and Santa Barbara. “It shakes the foundation of the media and advertising opinion leaders—are we dedicating the proper share of Spanish-language media it deserves?”

Lightning Strikes Twice

As Oprah Winfrey would attest, launching a network from scratch is an exceedingly difficult proposition, and the Univisions and Telemundos of the world have a substantial head start. “We’ve been developing our relationship with our audience on the local level for so many years,” Manuel Abud, president of the Telemundo Station Group, told B&C. “I feel very comfortable that we have such a relationship that we’ll be OK.”

Of course, ABC, CBS and NBC had a huge lead on Fox a quartercentury ago. It will, therefore, be no surprise to watch as MundoFox continues to sign up affiliates, hone its programming strategy and do its best to strike gold in broadcast TV for News Corp. yet again.

“Fox plays to win,” said Padron. “Look how well it has done when no one thought you could have a fourth network. It all had to do with Fox being a great broadcaster, and having the complete understanding of the investment needed to succeed in this space. They don’t play to lose.”

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