Cable Operators Bet on Bundles to Attract Hispanics

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For cable TV operators looking to attract more Hispanic subscribers, it’s no longer enough to add Spanish-language TV networks to programming packages. In fact, most of the major announcements this year — and much of the talk at last month’s Hispanic Television Summit — had to do with the launch of long-distance telephone plans that operators hope will help market triple-play packages to U.S. Hispanics.

The triple-play offer “is a very strong point of growth for us,” said Comcast senior director of multicultural marketing Mauro Panzera.

Comcast, which has offered products and services targeting multicultural audiences for several years now, introduced video-on-demand services among Hispanics with “huge success” in 2004, registering double-digit growth in number of orders of culturally relevant programming such as movies, music, children’s fare and sports. But in the summer it introduced Mexico Cien, a plan offering 100 minutes to Mexico for $4.95 a month.

Mexico Cien launched this year in five test markets (San Francisco, Chicago, Denver, Portland and Seattle), though the company plans to extend it nationwide in the first quarter of 2008. Without disclosing any specifics, Panzera said Comcast’s Paquete Triple, which launched at the end of October, has reported “tremendous growth” among Hispanics.

Cox Communications, which first launched its Paquete Latino in 2004, has consistently added additional products targeted to U.S. Hispanics and, more recently, calling plans. “We have been very aggressive in offering digital phone and calling plans to Mexico and Latin America,” said Cox manager of multicultural marketing Renata Franco. “Latinos are one of the best customers when you talk about phone [services].” Overall, Franco said, Cox has seen a 20% increase in its triple-play offering to U.S. Hispanics in the past 12 months.

Unlike its counterparts, Time Warner Cable does not have a region-specific long-distance plan, but in August it launched International OnePrice, a flat rate, international package of 3,000 minutes of calling to over 100 countries for $19.95 per month. Initially, OnePrice launched in New York City and San Antonio, but Time Warner Cable expects to roll out to most service areas in the next few months.

Research shows U.S. Hispanics over-index in the use of long-distance, whether through regular phone lines or calling cards. Still, Latinos — especially those who are Spanish-dominant — tend to lag behind the general market in subscribing to bundled services. According to FOCUS: Latino 2007, a study by Horowitz Associates, 20% of urban Hispanics subscribe to cable-provided packages of bundled services, compared to 28% of total urban respondents. That study also showed English-oriented and bilingual Hispanics are more likely to have a cable bundle (30% and 25% respectively) than Spanish-dominant Hispanics (9%).

The competition is only beginning, with telcos also jumping into the fray, setting up bundled packages tailored to U.S. Hispanics. Both AT&T and Verizon Communications have signaled they will expand their Hispanic marketing efforts by adding Spanish-language tiers, on-demand services and by boosting long-distance plans.

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