The numbers may be sluggish, but Liberty Media Group sees
them as a challenge, not as cause for alarm.
In fact, the programmer's enthusiasm for Canales ñ, its
year-old Spanish-language digital multiplex, is higher than ever, thanks to the dozen or
so MSOs which have recently launched the channel to much fanfare in the communities they
serve and among the CSRs selling the tier.
The word-of-mouth has been great, operators say. But
subscriptions have been slow, as many Hispanic households don't yet subscribe to cable.
Going from no cable at all to a digital tier is a big leap for such consumers.
"In terms of our viewing subs, we actually have a
small number," said David Jensen, Liberty's vice president. "It has been easy to
get distribution, but difficult to get 'cable-nevers' to sign up for brand new digital
cable product. When half [of your market] consists of 'cable-nevers,' that's a difficult
But not so difficult that Liberty doesn't see solutions.
Canales ñ currently passes almost 5 million homes, Jensen said, including 1 million
Hispanic households -- one-eighth of all Hispanic households in America.
If resistance continues, Liberty may take over the
sell-through for MSOs that need some help. The operator will send out a direct-mail piece
that talks about Canales ñ that lists an 800 number which links consumers directly to
Liberty. "Then we'll make the sale and even schedule the install," Jensen said.
That particular idea is still in development, he says, but
may not be necessary, based upon the enthusiasm and success of operators with active
At Comcast Corp.'s Comcast of New Jersey, which serves
270,500 customers in the Union area, 13 percent of customers subscribe to digital; 4.5
percent of that group gets Canales ñ. Promotions have included a telemarketing campaign
in Spanish, along with a bilingual direct-mail drop and advertising in area
"The non-subs are a more difficult group to
address," said Joanne Guida, director of marketing. "They don't know much about
cable, so you must explain the technology. But it's the programming that sells them in,
particularly when you're speaking to them in their own language."
While it may be difficult to sell to
"cable-nevers," Guida said, the reason most Hispanic households don't subscribe
to cable is because of the lack of Spanish-language programming.
"Our stronger success has been with upgrading, but
this product is designed for the underserved market that doesn't want cable because
there's nothing to watch," she said. "Thanks to Canales ñ, now there is, spoken
in the same language that's spoken in their homes. And it's not just one channel -- it's a
whole tier, with news, movies and music."
Jane Bulman, national marketing director at Comcast's
corporate office, sees the "cable-never" issue not as an obstacle, but an
opportunity. "In places where there's a growing Spanish population, like
Indianapolis, Canales ñ becomes a reason to subscribe for people who previously couldn't
be bothered with cable," she said. "This isn't just an upgrade effort--it's a
chance to get brand new customers."
Canales ñ currently carries Toon Disney Español,
Discovery en Español, CNN en Español, Fox Sports World Español, CBS Telenoticias, Cine
Latino, Canal 9, plus two video channels--Box Exitos and Box Tejano--and eight Spanish
music channels. Jensen says "a new programming catch" will soon be announced,
which will take the tier "from being a service you've never heard of to the most
important Spanish-language TV service."
Currently, Canales ñ has affiliation agreements with about
a dozen MSOs; AT&T Broadband & Internet Services and Comcast are the largest.
Others include Adelphia Communications Corp., Direct Link, Falcon Communications, Insight
Communications Co., Pioneer Communications, Telemedia and Time Warner Cable.
Cable operators pay a little over $3 per customer per month
for the service and retail it anywhere from $6.99 to $10. Comcast of New Jersey charges
$9.95 per month, but customers must also pay for the digital service along with basic
cable, which brings the total to $52 a month.
That price is a bit steep, according to Barry Moore,
director of marketing at Charter Communications Inc. in Long Beach, Calif.
By contrast, Charter's Spanish-language, B-side analog tier
of six channels, Cable Latino, costs $3.50 per month, or a total of $19.95 for a
first-time customer. Subscribers don't have to take basic cable to get the package.
"A few years ago, we realized that price was an issue
among Hispanics," said Moore. "We knew we needed to design a low-cost,
Spanish-language package that didn't require consumers to buy through the whole English
Currently, Charter has 5,000 subscribers to Cable Latino,
and has seen numbers increase 17 percent since January. The tier includes CBS
Telenoticias, The Cartoon Network, Gems, HTV, CNN en Español and Cine Latino. In the
basic-cable package, Galavision, KVEA and KMEX are also available. If HBO is ordered,
customers also get HBO en Español as part of the package.
"What we're trying to do now is contact our premium
networks to try to get them to go SAP as much as possible," Moore said. "The
more Spanish-language programming we can make available, the more it will help our future
growth." However, Carter has no intention to pick up Canales ñ. "Our tier is
doing well, and we plan on going digital ourselves at some point."
Matt Fleury, spokesman for AT&T Broadband &
Internet Services' Central Division, says that because so many consumers are subscribing
to digital, Canales ñ will only become easier to sell. Currently, AT&T charges $6.95
for the service. Fleury declined to give subscriber numbers.
"Increasingly, our customers, either new or existing,
are moving into our digital packages, irrespective of ethnicity," he said. "For
example, we [now] reach 100,000 digital customers in Dallas. Our overall customer numbers
will increase with digital service, and we'll be able to compete much more effectively
Bulman says that launches of Canales ñ have actually
coincided with digital launches. She predicts no problem in acquiring new Hispanic
customers, regardless of any fears over the digital format, due to positive word-of-mouth.
"Canales ñ has been well received in the Hispanic
media, and there's been a lot of word-of-mouth, particularly in Southern California,"
she said. In addition to Union, N.J., and Southern California, launches are also slated
for Trenton, N.J., and Indianapolis. "We suspected this would happen because that's
the nature of the community," Bulman said.
The 800 number on the Union, N.J., system's direct-mail
piece links consumers directly with Spanish-speaking representatives.
"The Hispanic segment is growing like many other
ethnic groups," she said. "You have to know your market, and your workforce
should be representative of your community."
When Liberty offers marketing advice to MSOs on how to
pitch Canales ñ, Jensen noted, the suggestions are often remarkably inexpensive.
"We tell them not to waste time and money on broad
marketing tactics, like big outdoor advertising," he said. "We found that [ads
on] bus stop benches and bus advertising works, but what works best is telemarketing and
direct mail -- a rifle shot that puts all of the info about the product into the
consumer's home. For the Latin demographic, this works well. It's the inexpensive tactics
that are the most successful, and that's a lucky break."
Guida agreed. "We're looking to reach 10-percent
penetration of the Hispanic market by the end of the year," she said, "some from
new installs and some from current customers."
She saw a bright future for both Canales ñ and
Spanish-language programming in general. "We know that the Spanish market tends to
spend more on technology in that they buy higher-end products, and they love television
and entertainment. And because of their desire to keep cultural roots, no one foresees
them outgrowing their language."
Jensen and Fleury said customer service representatives are
particularly pleased they finally have something to sell to Hispanic customers.
"CSRs are very psyched about selling the
product," Jensen said. "A lot of have been hearing complaints for years that
there was no Spanish product. Finally they have something high on tonnage and high on
quality. There's a real energy in the field about selling the product, which is very
gratifying for us."
"What I'm hearing," said Fleury, "is that
not only are customers embracing the product, but customer service reps working with
Spanish populations are very pleased to have something they can deliver to these