MCN Guest Blog

Determining the Value of Multicultural Cable TV Customers Today

6/08/2011 10:44 AM

I have played a role in the “multicultural cable TV marketplace” for more than two decades. From my perspective, in some years, the industry’s focus on multicultural markets has received more emphasis than in other years.

This year, the focus on servicing multicultural consumers is more enhanced than ever before. It is reflected in new programming tiers, marketing commitments and enhanced staffing. This can most easily be explained as a response to the recent Census findings. I think the reason is even more basic - - the multicultural cable TV customer is more profitable than ever before!

The best example of this “profitability” can be seen in the Hispanic market. Hispanics are now America’s largest multicultural population. They account for more than 16% of the U.S. population. When one compares the rapidly-growing “buying power” of the market to the revenues spent on promotional efforts to reach them, it is easy to see that it costs much less to sell this consumer, than to sell to a general market customer. In fact, the annual “Hispanic ad-spend” represents the fastest growing segment for media sales.

Add to this formula the fact that Hispanics represent a significant percentage of new householders. As a result, they are also the greatest potential for new cable TV customers.

Asian (mostly Chinese, Korean and Japanese) and South Asian (primarily Indian and Pakistani) cultures are experiencing a similar margin for profits measured in the difference between the marketing cost for acquiring the customer against and the buying power of the targeted consumer.

The second-largest multicultural population is the African-American community. Advertising costs for reaching African Americans are comparable to the cost of reaching the general market, and subject to the higher costs incurred for English- language advertising, which reaches the broadest audience. This situation has a less-vibrant effect on the immediate revenue potential of the market, yet, because this market is well-established, it delivers a longer-term return on profitability.

On Wednesday morning, June 15 from 7 a.m.-9 a.m., before the first session of the day at the Cable Show, you can hear more about the value of each of these cultures to the cable TV industry at the annual “Multicultural TV Breakfast,” presented by Multichannel News and Broadcasting & Cable.

I have the distinct pleasure of producing this event once again for these two publications. To register, please call Sandy Freidman at 917-281-4718.

Joe Schramm is the managing partner of Schramm Marketing Group, a NY based agency. They produce many special events for Multichannel News and Broadcasting & Cable, as well as serve the marketing needs of many in the pay TV industry, as well as in sports and entertainment.