MTV Tr3s went live over-the-air last week in Los Angeles and Phoenix, thanks to an agreement signed with Bela Broadcasting, which owns full-power stations in the first- and ninth-largest Hispanic markets.
The Latino youth network, which in relaunching in September changed its name from MTV en Español and revamped its format, is continuing to pursue broadcast distribution, in addition to cable and satellite coverage and Internet Protocol TV delivery, as part of its “hybrid” approach to carriage
“If you rely primarily on ad-sales revenue, it is very difficult to make any money when you are not reaching critical mass,” said Lucia Ballas-Traynor senior vice president and general manager of MTV Tr3s. “Broadcast is a key piece.”
According to Ballas-Traynor, without the Bela deal, the best the network could have hoped for in Los Angeles — where it already had a presence via pacts with Time Warner Cable, Cox Communications and Charter Communications — was about 15% of all households through satellite and digital basic. With KBEH-TV now in the affiliate fold, MTV Tr3s has about 94% market coverage.
Having also added Bela's KMOH-TV and KEJR-LP on Nov. 27, the network's coverage is now at a similar level in Phoenix, where the service is also carried by Cox.
Univision-owned Galavisión is the only Hispanic network widely available on basic cable. The bulk of Hispanic programming is concentrated in tiers, for which cable and satellite providers charge extra. The pay TV penetration rate among Hispanics is markedly lower than for other demographic segments.
Terri McKinzie, media director of Tapestry, the nation's largest multicultural media buying and planning agency, said, “Any kind of an emerging network in the Hispanic market needs to find ways to expand their distribution above and beyond cable and satellite.”
MTV Tr3s jump-started its broadcast distribution with the $17 million purchase earlier this year of 10 low-power stations in California and Texas, owned by the Caballero Television Group. The purchase price is listed in FCC filings.
“For the first couple of years, securing distribution is going to be a big part of what we invest in,” said Ballas-Traynor.
She stressed the importance of having established a broadcast presence in the Los Angeles market where a majority of teenagers are of Latino descent.
The Bela stations were previously operating as Spanish-language independents. Bob Behar, CEO of Bela Broadcasting, said the switch to MTV Tr3s was motivated by the opportunity to “get on the ground floor of something that can be very exciting and profitable in the future.”
Neither Behar nor Ballas-Traynor would disclose financial or operational terms of their agreement.
Despite the importance Ballas-Traynor attributes to the Los Angeles market, she said there are no plans to relocate the network's headquarters from New York to southern California, where competitors LATV, SiTV and NBC Universal-owned mun2 are based.
MTV Tr3s is currently broadcasting on 31 stations in 16 different markets.
All told, broadcast represents about 45% of the network's distribution to some 5 million of the nation's 11.2 million Hispanic television households. The Bela properties are currently the network's only full-power affiliates with the remainder consisting of low- power television stations.