Azteca America takes bold step

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A new player will kick off the Hispanic upfront tomorrow morning with the first presentation from Azteca America and Ricardo Salinas Pliego, the Mexican billionaire who owns Mexico's No. 2 network TV Azteca.

In Mexico, Mr. Salinas entered a market dominated by TV giant Televisa and captured about 35% of TV ad revenue and 40% of viewers, says Luis Echarte, the former TV Azteca chief financial officer whom Mr. Salinas tapped to run Azteca America.

"We feel comfortable as underdogs," Mr. Echarte says. In the U.S., Spanish-language TV is dominated by Univision, with about 80% of the market, and Telemundo, owned by General Electric Co.'s NBC.

Azteca America got off to a slow start in January 2002 with a sole station in Los Angeles. Mr. Echarte says Azteca America reaches about 60% of the U.S. Hispanic market through 24 affiliated stations and will hit 75% by late 2003. Because it doesn't own its stations and picks up sports, soap operas, news and other programming from Mexico's TV Azteca, the network already breaks even and should be in the black next year, he says.

After adding stations in Miami and New York in December, Azteca has been able to pick up advertisers including Procter & Gamble Co.; Wal-Mart Stores; Visa International; Sears, Roebuck & Co.; and MCI, says Philip Woodie, a former Univision executive who joined Azteca America a year ago as president-sales and marketing.

"Azteca could appeal to the [U.S. Hispanic] Mexican market, with an established and recognized home country name," says Monica Gadsby, managing director of Publicis Groupe's multicultural media buying specialist Tapestry. "The flip side is the lack of national measurement [of Azteca] by Nielsen."


It's crucial to participate in the upfront, where Mr. Woodie estimates that about 95% of Hispanic TV advertising is placed. Sales in the Hispanic upfront usually grow by 10%-15% each year, but Hispanic media buyers are betting that growth this year will be on the low side, close to 10%, citing existing advertisers' flat budgets. Growth will come thanks to the continuing influx of advertisers new to the Hispanic market, they say.

Telemundo last year introduced the first Hispanic reality show, "Protagonistas de Novela." In one of Telemundo's few ratings successes, 14 would-be actors live together, demonstrate talent and are voted out one-by-one by the audience. The winner gets a part in a Telemundo novela. A second series started in April, featuring product placement from five marketers including Ford Motor Co., Colgate-Palmolive Co. and SABMiller's Miller Lite, whose presence ranges from beer-filled coolers to magnets. Expect more.

"There's a slew of reality programs primar- ily revolving around music," says Ms. Gadsby.

And not just on Telemundo. One of Azteca America's most successful shows, "La Academia," also features 14 young people who live together and put on a weekly live concert and the audience votes them out one-by-one.

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