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WIRE TURNS HOT FOR CABLE ADDING HISPANIC HOMES MSOS AIM TO BOOST 20% PENETRATION LEVEL INTO MARKET'S 7 MILLION TARGETED HOUSEHOLDS

By Published on .

Cable TV is turning to the Hispanic market to help boost subscriptions.

With only an estimated 20% to 35% of the nation's 7.3 million Hispanic households wired with cable, multiple systems operators see this market as a lucrative source of new viewers and a way to boost the medium's household penetration rate, which has flattened at about 65% nationwide.

Network executives are counting on subscriber interest to influence cable companies. The hope is that operators will market a tier of Spanish-language outlets, featuring news, sports, entertainment and shopping services, as part of one package, says Gabriel Rodriguez, president-CEO of Telecompras Shopping Network. The network was launched Nov. 28 over broadcast and cable to 5 million homes in New York, Dallas and Houston, he says.

Increased cable penetration among Hispanics nationwide should give national and local advertisers another viable medium to reach this audience.

Although cable channel space is scarce, operators are certain to entertain inquiries from networks that can singlehandedly bring new subscribers. Several Spanish-language networks, including a sports network, a news service and the Telecompras shopping channel, are about ready to go nationwide.

MSOs are increasingly interested in luring both the Hispanic broadcaster and viewer, says Lela Cocoros, director-corporate communications with Tele-Communications Inc.

The problem historically has been limited channel capacity, she says. But by year-end 1995, TCI should have wide-range deployment of channel capacity and, as a result, more viewing options for subscribers, she adds.

"The capacity issue will almost go away," Ms. Cocoros says. "We want to be able to serve communities and provide customers with options that serve their needs."

Boosting penetration represents the single largest revenue growth opportunity for the cable industry, says Gary McBride, president-CEO of GEMS Television, a cable network for Hispanic women. Given the Hispanic market's affinity for premium channels and pay-per-view events, getting them to buy cable-and the growing number of Spanish-language channels should be an easy task.

Last winter, GEMS marketed its debut on the TCI of Los Angeles system with an in-house direct-mail campaign. The three-month effort increased subscriptions among Hispanic households by 8%-an achievement "totally unheard of" in the industry, says Mr. McBride.

For the first quarter of 1995, GEMS will launch a "Marketing Toolbox" collection of promotional items. The nationwide project will market GEMS-alongside other Spanish-language networks-to advertisers, cable companies and subscribers. It will use co-op and co-funded programs from the cable carriers, with local printing in every market to highlight local programming.

"The key is to market the value of cable to Hispanic consumers," he says.

Just as GEMS is using various methods to find subscribers among Hispanic women, La Cadena Deportiva is using a similar program to attract Latino males 18 to 49 to its Spanish-language all-sports channel. Launched in 1993, the station claims 1 million homes in Southern California.

Parent company Liberty Sports has used an in-house image campaign including local broadcast TV, radio, print, direct mail, outdoor and door hangers to raise awareness of the network and cable, says Dick Barron, Liberty VP-programming and operations.

The network is planning a national rollout in February and will run a similar program to recruit subscribers, he says.

"The Hispanic male 18 to 49 has nothing to watch," says Mr. Barron. "We want to make it so easy the cable operator can't say no."

There is a lack of good Spanish-language sports programming, with most of it reruns and wrap-ups of events that already happened, says Leon Potasinski, media director with La Agencia de Orci, Los Angeles.

Two Hispanic cable networks are promoting themselves through their partnerships with broadcast channels.

Telemundo is carrying three hours daily of programming from Telenoticias, a 24-hour Spanish-language cable news joint venture between Reuters Television, Telemundo Group, Antena 3 of Spain and Artear of Argentina. Viewers are told they can get the service, which began operating last month, by calling their cable carrier.

The effort provides "a valuable cross-promotional vehicle" to reach Hispanic viewers in the U.S., says Joaquin Blaya, president-CEO of Telemundo.

Meanwhile, Galavision, a general-audience Spanish-language cable network reaching 1.5 million U.S. homes, will use broadcast parent Univision to get "all these people who don't have cable to consider cable," says Javier Saralegui, director-advertising sales for Galavision.

The cable network also will use in-house-produced print, radio and outdoor beginning this quarter to introduce the station to potential new subscribers, he adds.

Though new subscribers are key, the network-which is currently in more than one-fifth of the nation's Spanish-speaking homes-is trying to build its existing base to attract national advertisers, Mr. Saralegui says.

"[Our penetration] is enough of a critical mass to make it interesting nationally for clients," he says.

Though 20% of Hispanic households might not seem like a huge amount, it's a fraction worth considering as a buy, media buyers say.

"One cannot afford to sit around and wait until national penetration reaches 50%," Mr. Potasinski says. Because the Hispanic market is concentrated in regions, "we look at national from spot to spot to spot."

Further market penetration, though, could depend on cable operators who are faced with "significant constraints" concerning channel capabilities and are going to make some "hard choices" in 1995, says Dick Arroyo, exec VP-managing director with MTV Latino. This pan-American network reaches 4.8 million homes but only 400,000 in the U.S.

In MTV Latino's favor is product awareness among-and little existing competition for-the target 12-to-34 age group. In addition, the channel will launch a marketing campaign and promotion tour targeting heads of Hispanic households.

The hard choices could become opportunities for the cable operators, says Howard Gladstone, exec VP with market research company Symmetrical Research. Spin-off channels from the major networks, like MTV Latino, HBO Ole and Canal de Noticias NBC, will become mainstays, he says, providing cable operators a chance to boost their penetration.

"Therein lies the opportunity for cable operators," says Mr. Gladstone. "Rather than looking outward at what the market is offering, the cable operator gets to look inward at what his market needs."

It's an opportunity media buyers hope will arrive soon.

"We've been waiting for this to open up," Mr. Potasinski says. "Growth is slower than we would like."

A three-month direct-mail campaign to promote GEMS on the TCI of Los Angeles system increased Hispanic subscriptions by 8%-an achievement "totally un-heard of [in the industry]. ... The key is to market the value of cable to Hispanic consumers."

Gary McBride

President-CEO

GEMS Television

Further market penetration could depend on cable operators who are faced with "significant [channel] constraints" and must make some "hard choices" in 1995.

Dick Arroyo

exec VP-managing director

MTV Latino

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