Latino Power
Big media tune in to the nation's largest minority
America's media giants aren't just gearing up to cover a war. They're gearing up to fight one--on American soil, in Spanish. This week, Spanish broadcasting colossus Univision Communications is expected to seal its $3.5 billion deal for Hispanic Broadcasting Corp., the nation's largest Latino radio network. The acquisition will give Univision control of more than half the $2 billion spent annually on advertising to Latinos, the fastest-growing segment of the U.S. population. That makes the Los Angeles-based company, known for its steamy soap operas and flashy variety shows, one of the country's most powerful communications players in any language. It also underscores the growing clout of Spanish-language media, which has shown itself to be both recessionproof (ad revenues were up 11 percent last year) and capable of pulling advertising dollars away from its English-language counterparts.
The HBC deal will only make the taking easier. With 63 new radio stations added to its 50 TV stations, two broadcast TV networks, cable TV network, online service, and music business, Univision will finally be able to offer advertisers the cross-promotional opportunities that have fueled an entire wave of media mergers, albeit with varying results. "Now that Univision can drive ears and eyeballs from music to the Web to radio and television, the steal is on," says an executive at a major advertising agency that services English-language clients. "Even more dollars are going to be headed into Spanish-speaking media at the expense of mainstream outlets."
And it's not just Univision reaping those dollars. While major networks such as ABC, Fox, and CBS--to say nothing of their print brethren--are trying to reverse a long advertising slump, Spanish media are flourishing. Magazines such as People en Español and Latina, a women's magazine, and TV networks such as Telefutura and Telemundo have been seeing steady ad increases. Every major market in the country has at least two Spanish radio and TV stations, and some, like San Diego with 25, are exploding.
There is no end in sight. "The growth in this market is going to be incredible," says Alissa Goldwasser, media-industry analyst with William Blair & Co., in Chicago. Goldwasser predicts that media spending geared to Latinos will grow two to three times faster than spending for the general population. It's not hard to understand why. There are 37 million Hispanics in the United States, more than the population of Canada, and they now outnumber African-Americans as the nation's largest minority. In some cities, like Miami, Hispanics are the majority. Their buying power is awesome: $580 billion a year and growing at a rate of 12 percent annually. By 2010, Hispanics are expected to have more than $900 billion to spend, making them an incredibly juicy target.
With that in mind, NBC last year spent $2.7 billion for Telemundo, the No. 2 Spanish network. And Viacom, parent of CBS, reportedly made a $7 billion takeover bid for Univision before the HBC deal and continues to seek options to court Hispanic audiences. Disney is launching a Spanish-language version of ESPN, and the Dallas Morning News is doing the same for its newspaper. And AOL Time Warner, which owns People en Español, HBO Latino, and CNN en Español, is looking to expand its Spanish offerings across the board from music to the Internet.
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