Anyone who doubts that a rapidly growing Hispanic population is changing the face of American television should visit San Antonio, Texas.
Here, Hispanics are already the dominant ethnic group, comprising about 60% of the Nielsen TV market. Because of that, cable can't rely just on its roster of Hispanic channels. It needs close ties with local Univision, Telemundo and Azteca America stations.
“For us, Hispanic marketing isn't a matter of reaching a minority,” explains Jeff Henry, VP of marketing and product development for Time Warner Cable in San Antonio. “Hispanics are the majority community, and the broadcasters have the widest reach in the community.”
Beyond its local stations, the Azteca America network provides Time Warner's system with 13 hours a week of video-on-demand (VOD) programming. Likewise, the affiliate station run by the Una Vez Mas station group has agreed to provide a VOD service featuring local and international news in Spanish. This spring, the operator launched a similar English-language local-news service with NBC affiliate WOAL.
“The operators are looking for ways to attract Hispanic subscribers, and we have new low-power stations coming into the market that need carriage,” says Karsten Amlie, VP of Una Vez Mas, which operates 13 low-power stations in 14 markets. “You have to be careful not to cannibalize your audience. But when done right, we think VOD helps promote both of our products.”
No other Hispanic broadcaster has been so willing to make VOD deals. But some of the major broadcasters and cable operators have inked agreements to beef up their cross-promotional efforts.
For example, Spanish-language broadcaster Entravision Communications has a retransmission deal that gives its full-power Univision and low-power Telefutura stations carriage on all Time Warner Cable systems where Entravision has a station.
“It's a very valuable relationship,” says Entravision President/COO Philip Wilkinson. “Beyond the obvious carriage agreements, we have reciprocal ad agreements in many markets.”
Mauro Panzera, senior director of multicultural marketing at Comcast Cable, concurs. “It's a huge help when we are able to market [our Hispanic tiers and packages] on local broadcast stations,” he says. “There are many ways that we can help each other.”
Promotional and programming alliances with Hispanic broadcasters are likely to become even more important as cable operators battle direct-broadcast– satellite providers Dish Network and DirecTV. Both launched large Spanish-language packages in 1999 and still have much larger subscriber counts for their Hispanic video packages.
That's why local programming and VOD have become particularly important for cable strategies in heavily Hispanic markets.
Says David Jensen, VP of international programming at Comcast Cable, “VOD is the main differentiator between cable and satellite. The Azteca America VOD programming that we launched this spring is some of the most popular product we have among both Hispanic and Anglo audiences.”
Most of the other broadcasters, however, have been more cautious. For example, cable operators often want to advertise on local stations to let viewers know all the Hispanic programming that cable offers. Uni­vision and Telefutura stations generally allow that, but the stations put some restrictions on what those commercials can say. And neither Univision nor co-owned Telefutura offers VOD programming. Discussions with NBC Universal-owned Telemundo about VOD have gotten wrapped up in larger talks with the parent network that could drag on much longer.
But clearly, many cable operators want to make a VOD deal.