Comparing Operators' Strategies10/13/2006 8:00 PM Eastern
This year's look at the Hispanic strategies for the major cable and direct-broadcast satellite providers once again illustrates how the nation's largest minority group has become a major part of the increasingly competitive multichannel landscape. Hispanics are not only the country's fastest growing ethnic group, they also have lower penetration rates for multichannel video packages, making them an increasingly important battleground between cable and satellite.
As a result, most of the major operators continue to improve and heavily promote their offerings. Some of the biggest changes can be seen at Comcast Corp. and Time Warner Cable.
The companies' joint acquisition of Adelphia Communications Corp. and subsequent system swaps have drastically affected their Hispanic efforts.
Comcast is currently rolling out its first triple-play offerings specifically targeted to Hispanics, while Time Warner Cable, which dramatically expanded its footprint in the Los Angeles and Dallas markets as a result of the acquisition and systems swaps, is putting even more effort into its Hispanic marketing.
A number of smaller MSOs —notably Suddenlink Communications, RCN Corp. and Bresnan Communications — have also been revamping their packages and expanding their marketing efforts.
Suddenlink, which acquired Cox Communications Inc. systems with relatively large Hispanic populations, has completely rebranded and revamped its offerings in recent months. Also this summer, Bresnan rolled out a wide variety of new Hispanic-targeted bundles and began promoting heavily discounted Hispanic offerings.
In September RCN launched a completely new package that offers more choice and programming than many of the Hispanic tiers currently available.
Meanwhile, the big DBS providers, EchoStar Communications Corp. and DirecTV Inc., that have dominated the Hispanic market aren't resting on their laurels; and over the last year, both have continued to add programming to their packages.
Only the lowest cost entry-level packages are typically listed below — most operators provide a number of other video packages that include many more English-language services. Pricing and exact channel lineups vary from market to market, in part because of different local stations included in the package, and the descriptions below should only be used as a reference point. Many operators tend to include regional feeds or audio channels in the count they provide for the number of Spanish-language services, further confusing the issue.
Subscriber counts are as of October 1, typically the end of the second quarter 2006, except as noted. Time Warner has released basic-subscriber counts that reflect the Adelphia acquisition and systems swaps with Comcast but not a breakdown of subscribers for its other services, which also will change dramatically when third quarter figures are released, and those breakdowns listed here are for the second quarter.
Basic Subscribers (Post-Adelphia, 7/31/2006): 23.3 million
Digital Subscribers (Post-Adelphia, 7/31/2006): 11 million
High-Speed Internet Subscribers (Post-Adelphia, 7/31/2006): 10 million
Voice (Post-Adelphia, 7/31/2006): 1.6 million
Contacts: David Jensen, VP of international programming; Mauro Panzera, senior director of multicultural marketing, (215) 665-1700
Hispanic Programming Packages (Least Expensive): CableLatino (up to 20 Spanish-language channels, limited basic channels, digital set-top box and video on demand in Spanish for $20 to $25, with typical pricing around $25). Corporate has signed deals with nearly 60 programmers. Systems customize local lineups to reflect the system's demos.
Spanish VOD, High-Speed Data and Bundles: Offers over 125 hours of free Spanish-language VOD in addition to the Spanish-language secondary audio program feeds for some pay movies; has an extensive Comcast Latino Spanish-language Web site for high-speed data subscribers; currently rolling out discounted triple play bundles specifically for Hispanic subscribers.
Major Hispanic Markets: Comcast's footprint passes about 4 million Hispanics, serving such large Hispanic DMAs as Miami; Houston; Boston; San Francisco; Denver; Atlanta; Philadelphia; Albuquerque, N.M.; and Chicago.
Recent and Future Moves: After rolling out lower-cost Hispanic tiers in 2003, the company has continued to revamp offerings, simplifying tiers, expanding free VOD offerings to over 100 hours and adding channels in 2004 and 2005. Over the last year, Comcast has expanded the number of corporate deals with Hispanic channels by about 20% to nearly 60, adding such channels as TV Venezuela, Canal Sur, Sur Mexico, Sur Puru and VeneMovies. It has also expanded the free Spanish on-demand offering to 125 hours, with more hours to be added over the next year. Working with Terra Networks, the MSO rolled out a Spanish-language portal, Comcast Latino in March and has been promoting its phone services that include unlimited free calling to Puerto Rico and low-cost international calls. A triple-play bundle targeted to Hispanics is currently being rolled out and should be available in most of its 10 largest Hispanic markets by the end of October. As part of the acquisition of Adelphia and the system swaps with Time Warner Cable, Comcast gave up Dallas and Los Angeles systems but has gained Houston, where 37% of the population is Hispanic.
DirecTV Group Inc.
Subscribers: 15.5 million
Contacts: Aaron McNally, VP of DirecTV International, (212) 462-5000
Basic Subscribers: Para Todos base package delivers more than 60 channels of programming, including more than 35 Spanish–language broadcasters, channels, and SAP feeds, as well as over 25 English-language channels for $29.99.
Spanish VOD, HSD and Bundles: Doesn't offer VOD or high-speed data services. Video packages for general market and Hispanics are sold and bundled with phone and DSL services by telco partners.
Major Hispanic Markets: Has a national footprint; offers local broadcasters, including Spanish broadcasters in many markets.
Recent and Future Moves: After months of research, DirecTV launched a lower-priced, revamped package in February 2004 as part of its plans to more aggressively target Hispanic communities and better compete with market leader, EchoStar. It has since been adding channels, targeting underserved Hispanic groups, such as Puerto Ricans and currently offers programming from most Spanish-speaking countries, with about 55 Spanish-language channels, feeds, SAP offerings or audio channels are available in its various packages. The improved packages, coupled with more aggressive marketing has boosted Latino subscriber base for the Hispanic package from 347,000 in January 2004 to well over 1 million in the spring of this year.
Time Warner Cable
Basic Subscribers (Post-Adelphia, 8/12/2006): 14.5 million
Digital Subscribers (Pre-Adelphia, 6/30/2006): 5.8 million
High-Speed Internet Subscribers (Pre-Adelphia, 6/30/2006): 5.4 million
DVR subscribers (Pre-Adelphia, 6/30/2006): 1.9 million
Voice (Pre-Adelphia, 6/30/2006): 1.6 million
Contact: Maida Chicon, director of multicultural marketing, (203) 351-2275, email@example.com
Hispanic Programming Packages: Brands used for Hispanic tiers, channel lineups and prices vary by division. Nuestra Tele is the most common brand, priced as low as $24.95 for local Spanish language broadcast networks, local basic English language broadcast stations, thematic Hispanic channels, digital box and access to VOD.
Spanish VOD, HSD and Bundles: Some divisions have rolled out Spanish-language VOD content in addition to the SAP feeds in Spanish available for many pay-per-view movies. Roadrunner Latino and AOL broadband services have extensive Spanish-language pages. Offers triple-play packages in most markets but still exploring the idea of rolling out specific Hispanic-targeted bundles.
Major Hispanic Markets: New York, New Jersey, San Diego, Los Angeles and other Southern California operations, Texas, and Carolinas.
Recent and Future Moves: The New York City system rolled out a low-cost DTV en Español package in early 2003 and a number of other systems have followed. In 2004, the company hired a director of multicultural marketing and created the Hispanic Marketing Coop, which is made up of marketing executives from a number of Time Warner Cable systems with larger Hispanic populations. In the summer of 2005, Time Warner announced plans to roll out a rebranded Nuestra Tele, which has now been rolled out to 14 divisions that serve its largest Hispanic markets. Systems customize the lineup and pricing of the package to reflect local demos, with 15 to 20 Spanish-language channels generally included in the Nuestra Tele package. As a result of the Adelphia acquisition and system swamps with Comcast, Time Warner has added systems in such major Hispanic markets as Los Angeles and Dallas, dramatically increasing the number of Hispanics it serves. With systems now serving the nation's two largest Hispanic markets, Los Angeles and New York, Hispanics have become an even more important part of its overall strategy. It has beefed up Hispanic marketing, winning awards from CTAM and NAMIC, and those marketing efforts will increase as it rolls out the Nuestra Tele brand in Dallas, Los Angeles and other systems acquired in the Adelphia/Comcast deals. Over the last year, it also worked to improve its programming, cutting a number of national deals with programmers, including Azteca America and TuTv, and has been ramping up its Spanish VOD offerings, particularly in New York, Los Angeles and Texas. It's Start Over feature, which allows viewers to restart live programming and includes such Hispanic channels as Telemundo and HBO Latino, has been tested in such markets as the Carolinas and San Antonio and will be rolled out to additional systems in upcoming months.
EchoStar Communications Corp.
Basic Subscribers: Over 12.5 million
Basic Subscribers: Dish Latino (an all-Spanish language option more than 36 Spanish-language services for $24.99 or $29.99 with local broadcast stations).
Contacts: Carolina Padilla, director of multicultural marketing, (720) 514-5550, Carolina.firstname.lastname@example.org
Spanish VOD, HSD and Bundles: No VOD but offers a Spanish-language PPV channel where subscribers can purchase movies for $3.99; telco partners bundle Dish's video packages with their phone and DSL offerings.
Major Hispanic Markets: National footprint; offers local broadcast stations, including many Spanish-language stations, in over 164 markets.
Recent and Future Moves: Dish was the first multichannel platform to seriously target the Hispanic market, viewing the effort as a way to distinguish itself from DirecTV and cable and it remains the market leader, despite increased competition. To maintain that position, the platform continues to strengthen its programming, adding 4 new channels, including ESPN Deportes and Telemundo Puerto Rico, over the last year. They also developed a prepaid card offering called DishNow! (¡DishYa! in Spanish) that allows customers to purchase programming as they go in $30 or $40 increments without supplying a social security number or credit card. That means there are no contracts or monthly bills, requirements that have discouraged some Hispanics from taking multichannel television packages.
Charter Communications Inc.
Basic Subscribers: 5.9 million
Digital Subscribers: 2.9 million
High-Speed Internet Subscribers: 2.4 million
Phone Subscribers: 257,600
Contact: John Figueroa, director, sales and ethnic marketing, (310) 971-4001.
Hispanic Programming Packages: Charter Latino (digital box, access to VOD where available, local broadcast channels and 22 Spanish-language networks for $24.99 to $29.99)
Hispanic VOD, HSD and Bundles: Beyond SAP fees for PPV and VOD movies, does not offer Hispanic-targeted VOD; has extensive Spanish-language charterlatino.com Web site; offers a wide variety of general-market bundles but no Hispanic targeted bundles
Major Hispanic Markets: Los Angeles; Ft. Worth, Texas; Reno, Nev.; and other markets with rapidly growing Hispanic communities
Recent and Future Plans: In August of 2004, the MSO began the soft launch of a low-cost Charter Latino tier in some markets, and in 2005 added more Spanish-language programming, rolling out Charter Latino in its main Hispanic markets, including those systems serving California and Reno. Over the last year it has continued to add programming, including TuTV, and has been heavily marketing its products in such markets as California, where it offered free magazine subscriptions to new Hispanic customers. Has been exploring idea of expanding Spanish-language VOD offering and Hispanic-targeted bundles but could not be reached for updates on VOD or bundling strategy or to confirm pricing of packages obtained from their Web site.
Cox Communications Inc.
Basic Subscribers: 5.4 million
Digital Subscribers: 2.6 million
High-Speed Internet Subscribers: 3.0 million
Phone Subscribers: 1.8 million
Contact: Tony Maldonado, VP of acquisition and marketing sciences, (404) 843-5000
Hispanic Programming Packages: Paquete Latino (up to 35 Spanish-language networks and 10 to 15 channels of English-language local broadcast stations and basic services for about $30); designed so local systems can customize the lineup and pricing.
Hispanic VOD, HSD and Bundles: Paquete Latino offers access to VOD services that include an En Español Category. Eleven of Cox's local systems are currently buying Spanish movies via InDemand, and the company tries to have culturally relevant programming for Hispanics in its PPV, free and subscription VOD offerings. In a number of markets, Cox offers bundles with phone and video that include free long-distance minutes to many Latin American countries. It has launched a Spanish-language Web site.
Major Hispanic Markets: Arizona, Central Florida, Las Vegas and Southern California, among others.
Recent and Future Moves: As part of a completely revamped Hispanic strategy, Cox launched the Paquete Latino package in September 2004, and has now rolled the package out in 19 markets. A Spanish-language Web site launched in November 2004 and last year, it rolled out high-speed Internet and phone bundles targeted to Hispanics that feature 60 minutes of free calling to 17 Latin American countries for anyone who takes more than one product. Are currently heavily marketing Hispanic-targeted bundles and are working to expand free Spanish-language VOD programming, with plans to roll out more free Spanish-language VOD content in late 2006 or early 2007.
Cablevision Systems Corp.
Basic Subscribers: 3.1 million
Digital Subscribers: 2.3 million
High-Speed Internet Subscribers: 1.9 million
Optimum Voice: 994,197
Contacts: Valerie Green, vice president of multicultural marketing. (516) 803-2300
Basic Subscribers: iO en Español (30 Spanish-language channels and World Picks: Latino Spanish-language VOD for $14.95 when purchased with broadcast basic tier, which costs $14.88, for a total entry level package of under $30). Family Cable and iO digital cable customers can add the the iO en Español tier for $4.95.
Hispanic VOD, HSD and Bundles: Offers Latino On Demand service and some VOD programming from specific networks; partnered with Planeta Networks in July 2004 to launch a Spanish-language Web portal for its Optimum Online data service; offers a wide variety of bundles for video, data and phone; includes Puerto Rico in the Optimum Voice flat-rate unlimited calling area.
Major Hispanic Markets: Greater New York City area
Recent and Future Plans: After launching Hispanic packages in 2003 and then rolling them out to the Bronx and Brooklyn in New York City, and the Newark, Paterson and Hudson County service areas in New Jersey, the company expanded the availability of iO en Español in late summer of 2006 to Long Island. Also in the summer of 2006, offered sixteen New York Mets baseball games in Spanish to digital customers.
Bright House Networks
Basic Subscribers: 2.2 million
Contacts: Steve Stiger, group VP of marketing, (407) 210-3156.
Hispanic Programming Packages: Nuestros Canales (five to 16 Spanish-language channels, including Bay News 9 en Español in Tampa Bay Division, and as many as five Latino music services for $2.99 to $3.95 on top of the digital package of over 300 channels that also includes local broadcasters.)
Hispanic VOD, HSD and Bundles: VOD services are widely available in the company's franchises, and offering includes some Spanish-language VOD; Road Runner en Español high-speed data service offered on most systems has extensive Spanish-language pages for Hispanic customers.
Major Hispanic Markets: Florida.
Recent and Future Moves: The company launched a digital Hispanic tier in October 2003 and since then has been reviewing its programming, pricing and bundles. In 2005, for example, the Central Florida division revamped its channel lineup, adding seven new Spanish-language channels and the Toon Disney SAP feed without increasing the cost of the tier, which is $2.99. At the same time it grouped all the Spanish-language services together to make them easier to find and created an Answers On Demand Español service that has Spanish-language videos to help customers get better use of their cable service and some markets have added channels. The company has been actively marketing the services through media and at community events. Does not offer a low-cost Hispanic entry level package, forcing Hispanics to buy up through the digital tier to get access to Neustros Canales.
Mediacom Communications Corp.
Basic Subscribers: 1.4 million
Digital Subscribers: 496,000
High-Speed Internet Subscribers: 516,000
Contacts: Italia Commisso Weinand, senior VP of programming and human resources. (845) 695-2600.
Hispanic Programming Packages: Canales (includes nine Spanish-language channels for $5.95 and is available on the majority of systems that have been upgraded to digital); customers must pay for analog package (which generally includes some Hispanic broadcasters) and the digital box in addition to the Canales tier.
Spanish VOD, HSD and Bundles: None to date.
Major Hispanic Markets: Nogales, Ariz. (the largest), plus a number of relatively small Hispanic communities.
Recent and Future Moves: Mediacom says it is always looking to add additional ethnic programming that fits the demographics of its local systems.
Basic Subscribers: 1.4 million
Contact: Mary Meier, senior VP, marketing. (314) 965-2020
Hispanic Programming Packages: Conexión Única (Includes over 30 Spanish-language channels for $21, in the West Texas markets, and $29.99 or $37.95 with HBO in most of the other markets).
Spanish VOD, HSD and Bundles: No Spanish VOD beyond those available on SAP feeds; has Spanish pages on Web sites; has offered some bundles with high-speed Internet and video in West Texas targeting Hispanics.
Major Hispanic Markets: Texas is the largest; Conexión Unica is now offered in a total of 47 markets, including areas in Arkansas, California, Louisiana, Oklahoma and North Carolina that have rapidly growing Hispanic communities.
Recent and Future Moves: After closing its acquisition of the Cox systems and rebranding itself as Suddenlink, the MSO now serves some major Hispanic markets, particularly in Texas where it is the third largest operator, and has begun aggressively targeting Hispanic consumers with revamped offerings and extensive marketing. In the summer of 2006, it rebranded the Paquet Latino package (available in the Cox systems it acquired) and the La Conexión Español (available in the old Cebridge systems) as Conexión Única. It has also hired a multicultural marketing executive and launched marketing campaigns on Spanish-language radio and television advertising to promote the new Conexión Unica brand and its other video and high-speed Internet services to Hispanics. Suddenlink offers phone service in most of its West Texas markets and a few in Missouri, with other markets to follow this year and next. It is planning to expand Spanish-language component to its relaunched Web site and as phone services are more widely deployed it may explore the idea of offering Hispanic targeted-bundles.
Insight Communications Co.
Basic Subscribers (8/2006): 1.3 million
Digital Subscribers (8/2006): 572,200
High-Speed Internet Subscribers (8/2006): 534,500
Phone Subscribers (8/2006): 107,200
Contacts: Melani Griffith, VP of programming. (917) 286-2300.
Hispanic Programming Packages: Insight Para Tí (average of 25 channels, five English-language and 20 Spanish-language, for $10 a month).
Hispanic VOD, HSD and Bundles: No specifically Hispanic targeted VOD or bundles.
Major Hispanic Markets: Serves some fast-growing Hispanic markets, such as Lexington Ky., but generally operates in communities with relatively small Hispanic populations.
Recent and Future Moves: The company has rolled out the Para Tí package in five areas and is now working to market it.
Cable One Inc.
Basic Subscribers: 686,002
Digital Subscribers: 211,158
High-Speed Internet Subscribers: 261,262
Contacts: Jerry McKenna, VP of strategic marketing. (602) 364-6000.
Hispanic Programming Packages: Digital Español (a digital box, 10 Spanish-language networks, Toon Disney, which has a Spanish SAP feed, and the basic-cable tier, which includes local broadcasters, for around $42, in about 98% of its systems; priced separately at $2.49 on top of digital packages).
Hispanic VOD, HSD and Bundles: None to date
Major Hispanic Markets: The MSO tends to serve small and mid-sized markets that do not have large Hispanic communities.
Recent and Future Moves: Cable One says it is thinking of adding some additional Hispanic-targeted programming but has not made any major changes to its offerings in the last year.
Video (RGUs): 369,000
Data (RGUs): 257,000
Voice (RGUs): 271,000
Contact: David Parsons, director of video programming, 703-434-8200.
Hispanic Programming Packages: MiVisión (32 Spanish language video networks, some VOD, four Spanish-audio channels, and the limited basic tier of 20 to 25 channels for as little as $29.90 in some markets) Consumers can also pick just one of several different themed Hispanic packages that make up the larger MiVisión offering, including Paquete de Variedades (a variety package that includes 15 channels of movies, art, music, daytime dramas and news) for $12.95; Paquete de Países, (the countries packages that features six channels from different Latin American countries) for $4.95; Paquete para Niños (kids package that includes five children's services) for $3.95; and Paquete de Deportes (a sports package with four services) for $4.95. These can be purchased on top of any package or alone with limited basic tier, allowing subscribers who take only the Paquete para Niños to get video service for as little as $23.95.
Spanish VOD, HSD and Bundles: Some Spanish VOD through World Wrestling Entertainment, with more to come; has Spanish language pages on Web site; video offerings can be bundled with a international calling plan that offers low-cost long-distance rates to a number of Latin American countries.
Major Hispanic Markets: New York; Los Angeles; Boston; Washington, D.C.; and Chicago.
Recent and Future Moves: After months of research and planning, RCN rolled out a radically revamped Hispanic package in September of 2006 in Boston, Chicago, New York, Eastern Pennsylvania and Washington, D.C. The new packages, which more than doubled its Spanish-language channels, were designed to offer Hispanic consumers more choice, low-cost entry options and straight-forward, easy to understand packages, RCN's new Hispanic strategy allows consumers to take the full MiVisión package or just take one of four smaller packages that make up the larger offering. To make the package easy to understand and straightforward, RCN does not count the regional feeds, SAP feeds, or music channels that other operators use to inflate the number of Spanish-language services offered. RCN is planning to add more Spanish-language VOD content from such programmers as Discovery and is looking to develop additional bundles with Internet and phone services that feature its extensive low-cost long distance calling plans.
Basic Subscribers: 293,000
Digital Subscribers: 132,942
High-Speed Internet Subscribers: 116,248
Digital Phone Subscribers: 47,098
Contact: Jackie Heitman, VP of marketing, 914-641-3300.
Basic Subscribers: Digital Economico (About 40 services, including about 20 Spanish-language channels and music services and local broadcasters, a digital box and access to pay per view, usually for about $26; a current promotion reduces this to only $19.99 to new subscribers); Hispanic tier also sold separately for $8.
Hispanic VOD, HSD and Bundles: No VOD beyond the SAP feeds for PPV and VOD movies but offers a wide variety of Hispanic-targeted double and triple play bundles and has Spanish language pages on the Bresnan.net site.
Major Hispanic Markets: Tends to serve smaller and mid-sized markets, in four mountain states, and has rolled out the services in many communities with growing Hispanic populations.
Recent and Future Moves: To capitalize on the rapidly growing Hispanic communities in its markets, Bresnan has been putting much more emphasis on Hispanic offerings in the last two years. In 2005, Bresnan has added seven new channels to its Spanish tier. In 2006, it rolled out double- and triple-play package for Hispanic customers and this summer began heavily promoting its Hispanic offerings with discounted pricing. Under the new promotions, new customers can get the entry level Economico video package for $19.99 with one year contract; and the Classico, which adds 70 channels from standard tier to the Economico, for as little as $39.99. It also launched a triple-play package that includes the Economico video package, 8Mbs high-speed Internet and unlimited local and long distance phone for $89.97 (a $10 discount) and a triple-play package with the Classico package, Internet and phone service for $99.87 (a $10 discount). Double play packages for Economico and either phone or Internet cost $59.99, rising to $69.99 with the Classico package. Currently, the MSO is also testing a bundle that offers 200 long-distance minutes to Mexico for an additional $9.99 and 400 minutes for an extra $19.99.
SOURCE: Compiled by George Winslow. Pricing and packages are as of Oct. 1, 2006 and may vary from system to system. Subscriber counts are the most recent available, generally second-quarter 2006 unless otherwise noted.