Originals Too Pricey For Latino Networks


Hispanic cable and satellite networks abound but original programming is scarce. The reason: Money.

“Scripted, original programming is expensive,” Kagan Research senior analyst Deana Myers said. “That’s the problem.”

Forty of the approximately 70 Latino channels consist entirely of feeds from Latin America, Puerto Rico or Spain. Another 10 channels rely heavily on material translated or adapted from parent networks in the United States. The rest rely mostly on syndicated programs and a smattering of in-house productions.

Modest carriage fees, a relatively low number of Hispanic subscribers, and the current level of ad revenue does not justify spending on original programming. Networks find it less expensive to reach the foreign-born segment of the Latino audience via entertainment, news and sports from their country of origin. And it is more difficult and more expensive to produce original programming for U.S.-born Hispanics.

Most networks would rather pay for a 30-year-old sitcom such as El Chavo del Ocho than produce new shows, and for good reason. That show is everything a cable programmer could want: inexpensive, exclusive and popular. El Chavo, which runs weeknights on Galavision, typically accounts for nine of each week’s top 10 Hispanic cable shows.

The show is successful despite its low production values and a quirky storyline about a hungry seven-year-old boy who sleeps in a barrel and dreams of ham sandwiches. The main character and all his playmates also happen to be portrayed by adults in their 30s and 40s.

The program continues to attract large audiences because of its strong scripts, multigenerational appeal and the nostalgia it evokes among foreign-born Latinos.

Nostalgia is driving dozens of networks that wrap themselves in the flags of their homeland. Puerto Rico’s WAPA-America is a superstation available on cable and satellite to Puerto Rican migrants to the mainland.

“You can watch generic programming on Univision and Telemundo; but there are 4 million Puerto Ricans asking what’s for us, and [WAPA-America] is the Puerto Rican flag in a video embodiment,” WAPA-America vice president of U.S. distribution Richard Traub said. “That Boricua flag that we see on cars, bumper stickers, pins, shoes, we are that on TV.”

Homeland channels from Chile, Colombia, Dominican Republic, Ecuador and elsewhere are also heavily represented on Hispanic cable and satellite tiers.

“A very important percentage of Hispanics feel a strong affinity to their country of origin. They want to follow what is going on in their homeland,” said Clemente Cabello, executive director of AlternaTV, which markets eight Latin American networks.

Survey results from the Pew Hispanic Center found 54% of respondents said their country of origin is their “first or only choice for identifying themselves.”

That sense of identity represents a business opportunity. “The Hispanic community is made up of many different countries of origin, which made us think there were various programming opportunities” said Cabello.

Spanish-language broadcast television understandably focuses on appealing broadly to as much of the Hispanic community as possible. And to a certain extent that means focusing on the two-thirds of Hispanics who are of Mexican descent.

Gossip shows focus heavily on Mexican stars, newscasts are heavy on news from Mexico and sportscasts highlight Mexican sporting events. Not exclusively but often enough that non-Mexicans can easily feel overlooked.

The desire by Hispanics to watch programming from their particular country of origin can be a powerful motivator to switch from cable to satellite or vice versa. “Everytime we launch in a new system, you see a huge spike,” Taub said.

That helps explain why, for instance, DirecTV’s Para Todos tier features dedicated channels from nine different countries and Puerto Rico. The total potential audience of, say, Ecuadorans is much smaller than that of the Mexican community. However, Mexican-Americans can tune into several broadcast outlets that transmit Mexican content for free. In contrast, an immigrant from Ecuador or any other number of Latin American countries who wants to watch programming from home has no option but to pay whatever operator carries that particular signal.

And from the perspective of an Ecuadoran television network, the idea of offering their programming to Ecuadorans overseas makes for an attractive business model as there are no separate programming costs.

The question remains, though, whether or not it is a long-term business model. Not surprisingly, Cabello thinks it is: “Immigration is going to continue [and] we have seen that many second-generation Latinos are interested in maintaining contact with their heritage, their traditions. Certainly, there is room for one or two channels per country of origin.”

John Figueroa, Charter Communications director of sales and multicultural marketing for the Western division, spoke highly of AlternaTV but questioned whether or not many of the other Latin American cable networks will survive over the long term.

“It would be unfortunate for the Latin American channels not to recognize their U.S. audience and develop programming for the U.S.,” Figueroa said. “If you don’t bring it to the U.S., the market won’t see it as theirs.”

The second-most popular Hispanic network business model is for existing cable programmers to offer a channel for the Latino market by tagging the brand name figuratively or literally with “en Español,” such as CNN en Español, Discovery en Español and History Channel en español. The idea is obviously to suggest a clear connection to the parent network brand and content, while establishing a distinct identity and maintaining a lid on costs.

“When you talk about Spanish-language television I think you do have to have a twist in your strategy,” Discovery Networks U.S. Hispanic group senior vice president and general manager Luis Silberwasser said. “You transform [the parent network’s content] in a way that not only the language is different. You have to have a decent amount of original programming in Spanish and that for us has been the key. I think the mix of those two things [provides] a competitive advantage over those who just bring in a signal from a country like Mexico or just try to dub things from the English into Spanish.”

“Repurpose” and “share” are words commonly used by Hispanic networks affiliated with larger mainstream channels. “We share newsrooms, we share an assignment desk,” NY1 Noticias executive editor Maritza Puello said. “NY1 reporters will bring back soundbites so that we can repurpose the same story they are running but with a Spanish [interview].” Asked if it would be possible to run NY1 Noticias as a standalone operation, Puello answered, “It would be possible but we would need a tremendous amount of money and additional resources”

A tremendous amount of money is needed to purchase the rights to the various sporting events of interest to the Hispanic audience. Yet, networks are making some of their most aggressive programming efforts in the sports arena.

The competition in Hispanic sports programming is intense and spurred by the presence of three strong Spanish-language cable sports networks and high-quality sports programming available on three Spanish-language broadcast networks. Most important, sports draws big-name sponsors such as automotive firms and breweries willing to spend top dollar.

And the highest profile events for Hispanic sports fans are soccer tournaments.

Fox Sports en Español has been especially active on the soccer front, frequently announcing the purchase of rights to a new set of matches, the latest being a series of Brazilian friendlies.

Because many of the “en Español” channels began life in Latin America, there are economies of scale in place when it comes to sports rights negotiations or production costs.

“Clearly, there is programming that is relevant to the Latin American market that is also relevant to the U.S. Hispanic market [but] it is by choice,” said Lino Garcia general manager of ESPN Deportes. “We want to be as relevant, as important to the Hispanic market as ESPN is to the general market.”

Relevance generally means spending big money on soccer rights, but it can also mean trying to identify inexpensive program options such as the World Domino Tournament.

“We kind of go out and experiment,” said Garcia. He hopes the ESPN Deportes transmissions of dominos games will set the network apart from its competitors. “Not all Spanish-language networks are alike,” said Garcia. “You can’t just lump everything together.”

The English-language Hispanic networks do their best to set themselves apart from the Spanish-language cable channels, and that extends to programming strategy. Those networks tout their original programming efforts, but SíTV acquires a significant amount of syndicated programs. Newcomer MTV Tr3s which launched in September, is still shaping its lineup.

LATV, which is the smallest of the four Latino youth networks, ironically features the largest amount of original programming. The strategy works for LATV because the network’s production staff is hired out to work for other television companies. Otherwise, it would be a struggle.

“Once you have the ad revenue come in to these channels, you will definitely see more investment in original programming” said Myers.

Carriage fees alone, with the possible exception of the largest Hispanic cable networks, will likely not be enough to support extensive amounts of original programming ventures.

Or, as Marlene Braga director of programming and production at the History Channel en español said, “Everybody wants the power of The Sopranos, but nobody wants to pay for it.”