Texas: Deep in the Heart Of the Hispanic Market

3/13/2005 7:00 PM Eastern

In a state where everything seems supersized, two TV soaps have best summed up the changing face of Texas. In 1978, at the height of the oil boom, Dallas began filming at the Southfork ranch in the wealthy town of Braddock just outside of Dallas. The primetime soap became one of the most popular shows in the history of American television.

Recently, another soapy tale of forbidden love, intrigue and betrayal went into production in Dallas. This time, though, it’s the Spanish-language series Ley del Silenco (Law of Silence), set in the Hispanic Oak Cliff neighborhood and airing on Telemundo.

Texas at a Glance
Total population growth 1980-2003:52.43%
Total purchasing power (2004)$638.7 billion
Hispanic population growth 1980-2003:123.41%
Hispanic Purchasing Power (2004)$119.3 billion
2003 2000 1990 1980
Total population (in millions)21.520.216.914.2
Non-Hispanic (%)64.6667.7474.4579.02
Hispanic (% total population)35.3432.2625.5520.98
Mexican (%)31.0827.65NANA
Puerto Rican (%)0.290.37NANA
Cuban (%)0.110.11NANA
Other Hispanic (%)3.854.14NANA
Source: All data from the U.S. Census Bureau

Ley del Silenco isn’t likely to attract anywhere near as big an audience that tuned in to see who shot J.R. But the production says much about the growing importance of the Hispanic market in Texas. In 1980, when Dallas was the most popular television show in America, there were about 3 million Hispanics in the state, about 21% of the population. By 2003, there were about 7.6 million Hispanics in the state, 35% of the population.

That growth has also attracted fierce competition. In San Antonio, where nearly 55% of the population is Hispanic, Time Warner Cable doesn’t just compete with satellite rivals Dish Network and DirecTV Inc. It also faces a local over-builder, Grande Communications, which has aggressively targeted the Hispanic community. And SBC Communications Inc. has allied with DirecTV to offer its own digital subscriber line packages, along with low-cost Hispanic packages from the satellite provider. Making matters worse for cable, SBC plans to roll out its own video service later this year.


To better compete, many cable systems have been working to create less expensive packages featuring a wide range of Spanish-language programming. Sharan Wilson, vice president of operations for Charter Communications Inc.’s Fort Worth system, says that about a year ago the system began revamping its offering because “we realized we didn’t have a product that anyone wanted to buy.”

After some research and focus groups, the system launched a new package that includes about 14 Spanish services and about 30 other channels.

“We now have a video [package] that is competitive with satellite,” Wilson says, “but there is more we want to do.” Charter is in the process of rolling out a package of about 22 Hispanic channels nationwide, including basic-cable and VOD services, for $24.99. Ft. Worth is in line to add that package. A Latino bundle with high-speed data will eventually be offered as well.

Time Warner Cable San Antonio is already moving in that direction. In 2003, the system helped pioneer low-cost, entry-level Hispanic packages by launching its $29.99 Mas Canales package that includes about 100 channels — both linear and VOD. About 20 of them are in Spanish.

The division is also complementing the linear channels with free Spanish-language VOD. Jeff Henry, Time Warner Cable San Antonio vice president of marketing and new product development, says tests for a free Spanish-language offering started last summer, with very promising results.

Since then, the rollout has been delayed by what Henry calls “the lack of product.” Currently, there are only 14 hours of Azteca America programming available. The goal is to have a few hundred hours within 60 days, with more to follow. By early summer, the system will have boosted its total VOD capacity for both English- and Spanish-language programming to about 3,600 hours.

Over the last nine months, San Antonio has been working with 11 or 12 other Time Warner divisions to further refine its Hispanic strategy. “Our first goal is to get on top of what programming we still need to add to the package,” Henry says.

Beyond that, they want to come up with a standardized name for the package, which will cost about $30 and contain about the same number of channels in most of the divisions. Henry expects that they will settle on one package costing $30 and another around $39.99.

Time Warner Cable is also looking for an ad agency that will help them develop a nationwide marketing strategy and campaign. And they are discussing ways to more effectively bundle their video, high-speed data and phone offerings.

Given the high proportion of young people in the Hispanic community, Henry is particularly bullish on the prospects of marketing data and phone services. Large numbers of young Hispanic consumers have pushed San Antonio to No. 1 among Time Warner divisions in the take-up of phone services and the usage of VOD. It is also the second fastest-growing HDTV market.

“Younger Hispanics have really embraced these technologies,” Henry says.

Recently, the system rolled out an interactive text-based news and information service in partnership with a local English-language broadcaster, and it is negotiating with a local Spanish broadcaster to create a similar service. Henry also hopes to add additional VOD product from local Spanish broadcasters.

“We’ve gotten such favorable feedback from potential broadcast partners that we expect to be testing VOD product early this summer” from at least one English and one Spanish broadcaster, he says.


Nationwide, some broadcasters have been leery of offering their programming on VOD. But in Texas some of the newer Hispanic stations have been actively working with operators.

Terry Crosby, CEO of Una Vez Mas, a Hispanic station group with six stations in Texas and 11 nationwide, says that some Azteca America programming is already available on VOD platforms on Texas systems.

“We are in discussion with a handful of operators about jointly producing local [Spanish-language] news,” that could also run on VOD, Crosby says. “We feel it’s important to get the product out there and get it sampled. VOD helps promote the stations and the cable systems. It’s a win-win situation.”

Such exposure is important for the group’s aggressive growth plans. By the end of the year, Crosby plans to add four stations in Texas, giving them coverage of the entire state. At that point, he plans to launch a network that would let advertisers buy all of the Lone Star state.

Todd Beauchamp, senior director of sales and marketing at Comcast Corp.’s Dallas system, is also exploring alliances with local broadcasters for VOD programming, which he believes will play a major part of their Hispanic strategy.

VOD won’t be deployed in heavily Hispanic areas of the city of Dallas for another few months. But Comcast Dallas already has 100 hours of free Spanish-language VOD programming, and the reaction in the areas where it has been deployed has been “phenomenal,” Beauchamp says. “Our subscribers initiated almost 2 million video streams in February alone.”

The system’s revamped Cable Latino package, which includes 18 video channels and eight music services for $24.95, has already helped them win back more subscribers than expected from satellite, Beauchamp says. Further gains will come when VOD is deployed. “VOD is something that no one else can provide,” he says. “It differentiates us from Dish.”

To get a better handle on how these offers are performing, Texas operators are using sophisticated research and data-mining techniques.


Time Warner Houston, for example, uses focus groups and data from Geoscape International Inc. to develop a detailed demographic analysis of the Hispanic community and to track the performance and market share of their products, says Jeff Balter, marketing manager at Time Warner Cable’s Houston Division.

Based on that data, the Houston division has decided to focus its efforts on “the transitional group of Hispanics” that are fluent in English and make up about 60% of Hispanics in the areas served by the division, according to Balter.

Focus groups have expressed desire for a wide range of Spanish- and English-language programming. As a result, the Houston division has developed an entry-level package of $41.99 that includes six local broadcasters and 13 digital Spanish-language networks. It has also created a $47.99 package that includes an additional 140 to 150 channels.

While most operators have embraced low-cost entry-level packages, Balter says the research-driven approach has paid off with increased subscriber counts. Over the last year, the system has boosted its Hispanic subscriber count by 12%, and its market share versus satellite is up 6.7%. The Road Runner high-speed data offering has also done well, increasing by 13% in the last year.

“The data base has been the most important tool we’ve had,” Balter says. “It really allows us to measure the performance of our campaigns and products.”


Providing a wide variety of programming, is also paying off in Cox Communications Inc.’s West Texas division. Last fall, it revamped its Spanish-language packages as part of a larger corporate initiative. Currently, their Paquete Latino offering includes about 70 channels, of which about 28 are in Spanish, for about $26. Customers can add Home Box Office, which includes the HBO Latino service, for another $4.

Since the September launch of Paquete Latino, subscribers to the Hispanic package are up 30%, says Michael Malcahy, vice president of marketing and sales at Cox West Texas. Even better, about 40% of those subscribers are new customers.

Bundling has long been a key part of Cox’s strategy, and West Texas is currently putting together some Hispanic targeted bundles. In about 60 days, the system plans to roll out a video and phone package costing around $50 that will include a low-cost Latin American calling plan and some free minutes to Mexico.

Austin/San Marcos
2003 2000
Total population (in millions)1.31.2
Median age31.731.1
Non-Hispanic (%)71.4273.57
Hispanic (% total population)28.5826.43
Mexican (%)23.923.28
Puerto Rican (%)0.150.39
Cuban (%)0.070.08
Other Hispanic (%)4.462.67
2003 2000
Total population (in millions)3.83.5
Median age32.331.6
Non-Hispanic (%)7476.79
Hispanic (% total population)2623.21
Mexican (%)22.1420.47
Puerto Rican (%)0.190.21
Cuban (%) 0.090.18
Other Hispanic (%)3.582.35
Fort Worth/Arlington
2003 2000
Total population (in millions)1.81.7
Median age33.132.4
Non-Hispanic (%)79.1781.72
Hispanic (% total population)20.8318.28
Mexican (%)18.8215.93
Puerto Rican (%)0.260.7
Cuban (%) 0.030.05
Other Hispanic(%)1.721.6
2003 2000
Total population (in millions)4.44.1
Median age32.131.6
Non-Hispanic (%)67.3669.99
Hispanic (% total population)32.6430.01
Mexican (%)26.4223.9
Puerto Rican (%)0.410.42
Cuban (%)0.210.15
Other Hispanic (%)5.595.53
San Antonio
2003 2000
Total Population (in millions)1.71.6
Median age33.133
Non-Hispanic (%)46.4348.34
Hispanic (% total population)53.5751.66
Mexican (%)47.1844.14
Cuban (%)0.30.51
Other Hispanic (%)5.656.82
Source: All data from the U.S. Census Bureau

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