Cable Operators

Breaking (and Embracing) the Paradigm

10/14/2005 8:00 PM Eastern

When Multichannel News and Broadcasting&Cable held their first Hispanic Television Summit two years ago, one of the most compelling presentations was made by Voy CEO Fernando Espueles, who provided a far-reaching vision for creating a mini-empire of Hispanic media services, including a TV channel.

Fast forward to today, and the Voy Network has yet to launch. While it was competing for carriage space with some 50 Hispanic channels before, that number has now climbed to 88, according to MCN and B&C’s annual listing of Hispanic channels (see page 22A). And many executives in the channel business say that growth in channels isn’t likely to end anytime soon.

Voy’s experience isn’t just a study in perseverance. It’s a study in a channel that has deliberately chosen a less-traveled path of offering English-language programming, created expressly for U.S. Latinos. And perhaps even more important in this day and age of mega-media companies, it’s an independent operation, without any parental leverage.

It’s also looking for opportunities that most other Hispanic channels aren’t even considering. According to a Voy spokeswoman, the channel could have received distribution on a Spanish-language tier, but “the real opportunity is in English, and to be marginalized on Spanish-language tiers was not the right path to take.”

What gives Voy hope that it can meet the challenge? “Cable operators are telling me this is the perfect time to launch a network like ours because they’re going digital,” vastly increasing capacity, says chief operating officer John Sadler.

That’s also a dynamic noted by others awaiting distribution deals. A few, like Voy, have been trying to gain initial traction for some time. Others, like Discovery Communications’ Travel & Living (Viajar y Vivir) and Discovery Kids en Español, are newcomers to the waiting game.

NEW APPROACH

“I think what’s happened is, when operators [first] wanted to do something for Hispanic audiences, they took whatever programming was available. Now operators are more discriminating about what they want,” says Luis Silberwasser, senior vice president and general manager of Discovery U.S. Hispanic Networks.

Voy is not the only English-lingo Latino service looking for traction. LATV, which launched two years ago, currently reaches some 3.5 million households in the Los Angeles area. The channel rides a full-power broadcast station in Los Angeles, KJLA, and gets local carriage on cable and satellite platforms, thanks to must-carry. But the ultimate goal is national distribution.

Starrett Berry, a consultant for LATV, notes that channels like LATV are “breaking the paradigm” for operators.

Until recently most of the Hispanic channels targeting the U.S. were “either imported broadcasters or cable channels, or they are repurposed American brands for Latin America that have been brought back into the U.S. That makes up 90% of the channels available,” Berry says. “We fall in a category with a couple of other channels – like mun2 and the upcoming [relaunch of] MTV en Español – that are created here, for this market. And that trend will grow.”

Regardless, some of the newer channels are seeking to appeal to distributors on a country-of-origin basis. Among them is Mexicanal, which launched in August and is owned by Atlanta-based Castalia Communications Partnership and the Mexican operator Cablecom. According to Castalia officials, Mexicanal provides programming from a variety of Mexican states – where most of that country’s immigrants to the United States hail from – rather than programming from Mexico City, where many of the Mexican-based shows distributed in the States originate.

The desire of operators to reach under-served segments of the Hispanic population is also an important reason why two Puerto Rican channels, WAPA America and Telemundo Puerto Rico, burst onto the scene during the last year.

LATV may note the importance of U.S. Latino culture, but WAPA is unabashedly focused on Puerto Rican culture. “If you get to the heart of what makes us successful … it’s the cultural difference, not so much the language difference,” says Ed Munson, vice president of television for WAPA’s parent company, LIN TV Corp. He reports that WAPA America appeals not to just people from Puerto Rico, but from the Caribbean in general.

Mexicanal’s strategy of clustering programming from a variety of channel sources speaks to a larger trend among newcomer Hispanic channels. Composite channels are nothing particularly new, but they seem to be turning up in greater number. Consider some of the new channels being distributed by Condista, such as Sur Mex, Sur Perú and Sur Venezuela Globovision. Each combines programs from a variety of channels in their designated countries.

Executives at Condista are obviously sensitive to the need to make channels culturally relevant for U.S. Hispanics. “One of the trends we’re working on is customizing the signal for the United States – taking what worked for channels in Mexico, and pan-regionally, and upgrading the channel for the U.S.,” says Burke Berendes, a partner in Condista.

Significant upgrades have certainly been the name of the game for some, like mun2, which officially rolled out its relaunch Oct. 3, and MTV en Español, whose facelift will be revealed in the new year.

Such tweaking is to be expected, notes Antoinette Zell, senior executive vice president of network strategy at Telemundo Networks, the woman behind mun2’s remake. “A lot of us are trying to figure out how to super-serve this market, and from my experience in Latin America, it takes some time to figure it out,” she says, referring to her years at MTV Networks Latin America.

MORE CHANNELS AHEAD

Sure there’s close to 90 Latino channels out there already, “but I’m sure in the coming year we’ll see more channels,” predicts Zell. In fact, she says that while nothing’s on the immediate horizon, Telemundo certainly intends to enlarge its channel stable.

That’s also the game plan for Castalia Communications, which distributes a variety of channels from other countries. Luis Torres-Bohl, president of that company, says he intends to launch “as many as I possibly can,” in 2006, although not all of them will be Hispanic, necessarily.

Eventually, both Bohl and Zell expect that there will be some fallout of channels, and some will merge with one another – a sort of natural evolution process that takes place as TV markets mature.

That means even more competition for channels that have been hanging tough like Voy. But Sadler insists 2006 is the year Voy Network is going launch. Distributors “don’t want the 15th channel from other media companies” that use the same library of programs, he says. “There’s a realization that there’s a major demographic in the U.S. that Voy is going to serve with culturally relevant programming.”

September