Filling a 'Void': How TV Is Taking Aim at Young Hispanics
At a lunch in New York in March 2011, ABC News head Ben Sherwood and Univision News chief Isaac Lee were discussing ways they might work together on the upcoming election. Lee mentioned an "incubator" project they had underway called "Univision in English" designed to reach second- and third-generation American-born Hispanics.
"We were both clear where the growth of this country was going to come from, where the opportunity was and how relevant millennials were going to be," recalls Lee.
That conversation led to the launch of Fusion on Monday in just over 20 million TV homes; it's a joint venture cable and digital channel from ABC News and Univision offering news, culture and lifestyle programming with a distinctly Latino flavor and a youthful sense of humor.
The joint venture partners, Univision and ABC News, won't say what this is costing, but similar ventures have run in excess of $100 million, and even with some shared resources, there has been no skimping on this startup. More than 200 new employees have been hired, and a high-tech newsroom has been built in Miami, where more than a dozen ABC News producers and reporters from New York, Chicago and L.A. have spent weeks working with the new Fusion team.
"It is a lot of money," says Lee, "but they are betting on the future. It's in congruence with the potential of the opportunity."
Sherwood predicts that over the next five years Fusion will grow into "a very valuable asset" for Disney and Univision. He also sees it as a way to enrich ABC News by learning as well as teaching, and by sharing resources and personnel. On Monday, the Fusion morning team was on ABC's Good Morning America. An interview with President Obama on the Fusion evening news show America With Jorge Ramos will also get play on ABC News.
Sherwood says that is only the beginning of tapping into each other's personnel, shows, news and resources.
"Fusion is aimed at championing a smart, inclusive, diverse America," says Sherwood, predicting Fusion will be in 60 million homes within five years. "This venture is a bridge to that audience. By every measure this largely Hispanic but increasingly multicultural audience is transforming this country."
More than 17 percent of the U.S. population is Hispanic -- up 48 percent since 2000 -- with an average age of 27.4 years, according to census figures, compared to 36.8 years for the total population. By 2060, Hispanics are expected to comprise half of the U.S. population.
"We've never had an immigration group that was going to come close to or match the size of the original population which is what's going to happen with Hispanics around the middle of this century," says Nancy Tellet, MTV's senior vp research and consumer analytics for Latin America.
In 2006, MTV transformed its 12-year-old MTV3 channel into Tres (stylized as Tr3́s, for the number three in Spanish), which programs mostly in Spanish, focused on Latin rock and pop.
The specific focus on millennials -- those from 18 to 34 years of age -- is tied directly to the incredible growth of this group now and in the future. Hispanic youth are now the largest, fastest-growing minority group in U.S. schools (K-12), according to census data. Almost all are bilingual or speak English as their dominant language.
Of the time bilingual Hispanic youth spend watching television, "30 percent [is spent] watching Spanish television, where there are only a handful of channels," says Tellet, "and 70 percent with English television, but that's hundreds of channels."
The growth of the Hispanic population is already shaking up the network ratings race. For instance in the July sweeps period, Univision, with an average audience of nearly 3.6 million total viewers, was the No. 1 network on broadcast or cable in primetime among adults 18-49 and adults 18-34 and among person 12-34. The Univision audience grew 6 percent over the prior year while ABC saw a 24 percent decline, Fox a 20 percent decline and NBC a 12 percent decline.
"Every year 500,000 Hispanics turn 18," says Lee. "They are born in the U.S. and speak English. Their life is in the U.S. and their friends are here. So the growth you're going to see in the Hispanic millennial population is huge."
Sherwood notes at a time traditional TV is seeing a fragmentation of its audience to new outlets and digital platforms, Fusion is tapping into an audience that is growing every day in size, influence, economic and political power. "So much of the discussion in media is about holding on," says Sherwood, "and this is about growth."
Fusion is not alone in looking to tap this growing market. Independent channel Si TV, started in 2004, was renamed Nuvo TV in 2011 and relaunched this past July as an entertainment/lifestyle channel with Jennifer Lopez as chief creative officer.
On Dec. 15, filmmaker Robert Rodriguez and others launch the El Rey network, offering scripted and acquired exploitation and action programming.
They will compete head on with two existing channels that mix Spanish with some English -- Viacom's MTV Tres and Telemundo's Mun2.
"It's filling a void that exists in the marketplace," said Lia Silkworth, executive vp and managing director of Tapestry, the multicultural division of Starcom, an ad agency. "It's content you aren't seeing on other Spanish-language networks and it's contextually relevant. If you're a Latino, you know it's for you."
Being contextually relevant is key because these millennials have lots of viewing choices. "They watch the majority of their TV in English but they don't see themselves reflected on TV or they only see stereotypes," said Michael Schwimmer, Nuvo TV's CEO. "Our network set out to give them entertainment where they see themselves and their stories."
Alicia Menendez, a 30-year-old New Jersey native (her father is a U.S. Senator), says what she hears from her Hispanic peers is that they have been waiting for this kind of service. "The response is always, 'I've never seen anything like this before and the reason I don't watch TV is because there isn't content like this out there that is smart and funny and doesn't take itself too seriously.' "
"This isn't for the old school," adds Menendez. "This is for the new school. We're not trying to break the news. We're trying to fix it. We're broadening the definition of what it means to provide dynamic interesting content."
Steve Mandala, executive vp ad sales at Univision, says his company has done extensive research that backs up the notion Hispanics will watch a channel that has their values "as long as they can find high-quality scripted and nonscripted programming that is culturally relevant."
Along with new Spanish-language networks, Fusion is one of three investments Univision is making in English-language channels for millennials. They are also minority partners in the El Rey network and later this year are launching their first digital channel called Flama (first on YouTube then as a standalone) with a partner that will feature mostly videos -- comedy, lifestyle, sports, documentaries and more.
"Candidly we feel pretty strongly that we understand this audience better than anyone else does," adds Mandala. "We understand all parts of this audience including that English-speaking piece. We think we can develop and produce programming and market that will interest them."
El Rey vice chairman Scott Sassa, who has held top jobs at Fox Broadcasting, NBC and Hearst, said it's important to have compelling content created by people who understand this audience. "It is our job to create a value system we can articulate," says Sassa, "that gets people who are a little rebellious, a little different and makes them feel this is the place for them."
"We're looking at it from an outsider's point of view because our audience is usually not invited to the table," says Derek Ashong, who is hosting DNA on Fusion, a news show with The Daily Show's sensibility. "On this network the outsiders have been given the key to the castle."
These channels have a Hispanic focus but much broader goals. By being in English, they see an opportunity to draw in an entire younger audience who share the Hispanics' interests.
"We're an English-language network so even though we have a Latino sensibility and point of view, everybody can enjoy the high-quality content," says Nuvo TV's Schwimmer, "just like Lifetime is for women but men will watch a really great movie."
Sassa is adamant that El Rey will not be just for Hispanic millennials, but will also attract what he calls the Comic-Con audience that shares founder Rodriguez's sensibility -- action, science fiction and exploitation fare. "This is not a network like most created by MBAs," says Sassa. "This is a network by a guy who actually likes this content and is curating what he likes."
Its first original show, based on Rodriguez's movie From Dusk Til Dawn, premieres 10 episodes in early 2014. Like much of the El Rey programming, it is being produced at a 25-acre studio Rodriguez operates in Austin on land that was once part of an airport. They are keeping costs low with players and crew who go from show to show and by bringing in producing partners, including an arm of the Indian company Reliance.
Rodriguez owns El Rey with Cristina Patwa and John Fogelman of FactoryMade Ventures. Univision is a minority partner handing ad sales and distribution.
Sassa won't say how much is being invested, but a knowledgeable source says El Rey has a war chest of well over $100 million to get it to profitability.
Sassa says El Rey expects to launch in more than 40 million homes, making it one of the biggest starts for any cable channel. That is possible because El Rey is one of the channels Comcast has committed to carry in order to meet its promise when it bought NBCUniversal that it would provide a diverse menu of programming. Time Warner Cable and others have also agreed to carry the service.
Like all of the channels aimed at millennials, the channel's marketing plan includes a major presence online and on social media. "We're trying to make sure we're not building a gas station," says Sassa, "when plug-in cars are about to become the thing."
Nuvo TV, which has raised more than $150 million from private investors and venture capitalists, is now in about 33 million homes. "It's rough out there, but the saving grace for Nuvo TV is all the distributors want to establish a much deeper connection with Latinos in their community," says Schwimmer.
While he insists Nuvo TV is very different from the news-oriented Fusion, he welcomes its arrival, which he sees as a "validation" of what its execs have been doing for nearly a decade: "Now I don't have to spend time trying to convince people it's a real category of programming."
Diana Mogollon, general manager of Mun2 is convinced Fusion will also help her channel, which is mostly in Spanish, because it will show distributors and advertisers the importance of this audience.
"A portion of the audience is still about the duality of culture and language," says Mogollon. "A portion still lives their life mostly in Spanish. We use language as a lever to see how it can play organically into a show or genre."
Tellet says even when Hispanic millennials speak and live much of their life in English, they revert to Spanish at home where TV viewing is more of a communal experience than in non-Latino homes.
"Since the recession we have seen a very large percentage of 18-34 living at home with their parents," adds Tellet. "Even though they are bilingual, in those households 86 percent of them speak mostly Spanish inside the home. When you are talking about co-viewing, especially in primetime, that's done primarily in Spanish."
Starcom's Silkworth says for now advertisers will go after this audience in both languages and on every available platform, from traditional TV to mobile to online.
"If you're going after the Hispanic audience specifically, then from where I sit I want to see distributors in both because they play in both worlds" says Silkworth, adding: "As to whether [the new channels] succeed or who will be left standing, I think the viewers are going to have to decide as the networks roll out."
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