Exec VP Andrew Hobson said Univision expects Telefutura to break even its first year with ad revenue of $100 million, or 6% of the total Spanish TV market. Telefutura's strategy is to grow the U.S. Hispanic market by luring back Spanish-dominant Hispanics, who spend almost half their TV viewing time watching English-language networks.
Buoyed by Census 2000 data, Univision likes to paint a bright picture of Hispanic buying power that grew to $444 billion in 2000, from $215 billion a decade earlier, and is expected to break $1 billion by 2010. "The biggest impact is the census information," said Ron Furman, exec VP-network sales at Univision, whose ad revenue edged up 3% in the first three quarters this year. "As we dig through the demographics and talk to advertisers, we'll be able to monetize it. The growth of the Hispanic market over the last decade took advertisers by surprise."
While Univision is a regular participant at Wall Street media conferences, Mr. Furman's presentation at last week's UBS Warburg event marked the first time that conference devoted a whole morning to four Spanish-language media companies. That's one more indication of Wall Street's growing interest in the market.
Another UBS Warburg presenter pointed out that the census showed Hispanics had been undercounted in radio ratings by up to 10% in top Hispanic markets. "The ratings for Spanish stations will go up, because the weighting attributed to Spanish diaries by Arbitron will go up by that amount," said McHenry T. Tichenor Jr., president-CEO of radio station owner Hispanic Broadcasting Corp.
Televisa, the Mexican TV giant that has an audience share of more than 70% in its native country, is increasingly eyeing the U.S. Hispanic market as well. "We've been reviewing strategic alternatives to expand into the U.S. and conducting strategic conversations with U.S. media players," said Alberto Islas, Televisa's head of investor relations.
The Mexican broadcaster already owns 5.8% of Univision. Televisa supplies all Univision's daytime programming, which brings in 40% of Univision's ad revenue, he said.
Televisa is particularly interested in entertainment options in the U.S. Hispanic market involving the publishing or music industries, Mr. Islas said.
Mexico's other major TV broadcaster, TV Azteca, saw its plans to launch a Spanish-language network in the U.S. this year stymied by Univision. TV Azteca had its eye on 13 USA Networks stations that Univision swooped in and bought for $1.1 billion to convert to Telefutura stations.
But even the U.S. Hispanic market is not all upbeat. After the third quarter, Univision dissolved Ask Jeeves en Espanol, a joint venture with the search engine Ask Jeeves; the Spanish-language search engine Pregunta.com they launched earlier this year was shut down.
StarMedia Network, a Spanish- and Portuguese-language Web portal, also has seen its star fall. The dot-com last month said it would have to restate past financial results and announced the resignation of co-founder and Chairman Fernando Espuelas.