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What George Lopez can teach Univision

April 02, 2006|Kyle Pope | Kyle Pope, a former editor and reporter at the Wall Street Journal, writes about media and business.

WHEN Univision Communications said recently that it was putting itself on the auction block, the announcement was seen as a milestone. With an asking price of $11 billion, a Univision sale would almost certainly rank as the biggest deal in the history of Hispanic media in the U.S. -- a testament, as if one were needed, to the economic clout of the nation's fastest-growing ethnic group.

But the sale of Univision needs to be viewed as much more than simply a big payday for the company and its iconoclastic chief executive, A. Jerrold Perenchio: It's also a chance to throw out some flawed and outdated ideas about what Hispanics in this country want when it comes to entertainment.

Most of what they're now getting, at least on TV, comes from Univision. The company, run by Perenchio, a former Hollywood agent and boxing promoter, is the granddaddy of Spanish-language TV in the U.S. At any given time, its programs are watched by three-quarters of the Spanish-speaking viewers in the country, making it the fifth-largest American network, behind CBS, Fox, ABC and NBC.

That reach has made Univision the no-brainer choice for ad buyers wanting to reach what they see as a single Hispanic market. "It's a foregone conclusion that Univision is going to receive the bulk of that money," said Luis Garcia, a marketing consultant in San Antonio.

But those days are ending -- part of a fundamental shift in taste and demographics that not only will make life difficult for Univision's buyer but will force Wall Street and Madison Avenue to realize that the old way of reaching U.S. Hispanics is tapped out.

For years, Univision profited from immigration. As first-generation Spanish speakers surged into the country, Univision gave them familiar programming, all of it in Spanish and most of it imported directly from Mexico by way of Univision's partner, Grupo Televisa. The lineup was a mixture of telenovelas, variety shows, Mexican soccer and news.

And that is the way it has remained, even though Univision's audience has changed radically.

First, the notion of a single Hispanic "market" -- a misconception Univision was happy to capitalize on -- is unraveling. What Puerto Ricans in New York or Cuban Americans in Miami want on television can be very different from what Mexican Americans in El Paso want. Reaching all those audiences -- 41 million people in all -- with a single feed of shows from Mexico no longer works. Advertisers are beginning to recognize the distinctions and, thanks to pinpointed marketing technologies available through the Internet and digital television, can speak to each of these groups separately.

Moreover, the fast-growing audience of young, third-generation Hispanics have different TV tastes from the shows they're now getting from Univision and Grupo Televisa. These viewers are more affluent and as apt to watch "Desperate Housewives" or "American Idol" as anything on Spanish-language TV.

They also have a different, more nuanced sense of how Latinos should be portrayed in pop culture. Think "Dora the Explorer" on Nickelodeon or "The George Lopez Show" on ABC. Or think, even, of a recent McDonald's ad featuring a dad and his son bonding over lunch. The fact that both actors in the spot were Latinos was enough to make a subtle point: Yes, we know you're unique, but no, we don't have to hit you over the head with it. Although these changes have been underway for years, Univision and its retro-programming have stayed on top for two reasons: the massive reach of the network -- with its more than 60 local TV stations -- and the inertia of clueless advertisers, who couldn't be bothered to look into an alternative.

Now, finally, ad buyers who specialize in Hispanic marketing say the message seems to be getting through. Philip Remek, a media analyst at Guzman & Co. in Miami, notes that Univision's ad revenues have begun to slow after years of uninterrupted gains. That's partly because media buyers in search of younger, more assimilated viewers are going elsewhere to spend their money. "This may not be a short-term blip," he said.

Marketing money is being diverted to the Internet, to programmers such as MTV that recognize the changing market, and to start-ups such as SiTV, a cable network that is offering up hip, English-language alternatives to the third generation.

All these outlets are after a piece of a spending pie that, according to Hispanic Business magazine, is shrinking as advertisers realize that the notion of a monolithic market peddled by Univision no longer works. Spending on the Spanish-language TV ad market peaked in 2002, according to the magazine, even though household purchasing power now exceeds that of Mexico.

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