(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Raul Gallegos
NEW YORK, Aug 14 (Reuters Breakingviews) - Rupert Murdoch is
banking on U.S. Latinos going all-American. News Corp’s (NWSA.O)
new MundoFox, a Spanish-language joint venture with Colombia’s
RCN Television TRR.CN, should have little trouble piquing the
interest of America’s fastest-growing minority with the Latin
American country’s television soap operas. Throwing in
U.S.-style programs is the novelty – and could define how much
market share News Corp can grab.
Murdoch knows he needs something different. Giant
broadcaster Univision dominates America’s Spanish-language TV
market on the strength of Mexican soap operas popular with the
older generation. MundoFox’s plan to combine soaps with edgier
Colombian series will probably please younger Latinos. Dubbed
News Corp content, like the animated “American Dad,” adds
another layer to the offering.
Changing demographics should justify more sophisticated
programming. Hispanics made up 16.3 percent of the U.S.
population in 2010, according to the census that year, but could
reach 22 percent by 2030. Yet in a sluggish economy new
immigration is likely to slow. That means the bulk of near-term
population growth will come from bilingual second and
third-generation Latinos who grew up watching HBO.
What’s more, ad revenue has room to grow. Nielsen reckons
advertising dollars topped $5.7 billion for all U.S.
Spanish-language media in 2011, with $2.2 billion of that spent
on TV ads. Yet a mere 4 percent of U.S. advertising targeted
Hispanics last year, Moody’s reckons. That’s modest considering
the community’s $1 trillion of annual spending power is about a
tenth of the U.S. total, according to the research firm.
Broadcasters also sell ads for as much as a 30 percent discount
to English-language ones, based on Moody’s estimates, a gap that
has the potential to narrow.
More than half the 120 advertisers that buy time on News
Corp’s Hispanic-targeted Fox Deportes, Utilisima and Nat Geo
Mundo are already on board with MundoFox, which launched across
the United States on Monday. That will help the company toward
its goal of capturing 2 percent of Hispanic TV ad dollars in the
new channel’s first year. And Univision, under a heavy debt
burden since a 2007 leveraged buyout, isn’t the most flexible of
competitors. The timing of Murdoch’s latest effort to outfox a
larger rival looks characteristically canny.
SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS:
- MundoFox, News Corp’s Spanish-language TV joint venture
with Colombia’s RCN Television, launched in 50 cities across the
United States on Aug. 13.
- The network plans to offer viewers RCN’s soap opera
programming during the day but will emphasize American-style
television geared for a Spanish-speaking audience. This will
include dubbing some Fox content into Spanish, including the
animated show “American Dad.”
- MundoFox will compete with market leader Univision and the
smaller Telemundo for an audience estimated by the U.S. 2010
census at 51 million people, or 16.3 percent of the population.
- The American Hispanic community has purchasing power
estimated at $1 trillion, potentially rising to nearly $1.5
trillion by 2015, according to Moody’s. Spanish-language
broadcasters compete for a portion of an overall $5.7 billion
Spanish-language in advertising spending, according to Nielsen.
- For previous columns by the author, Reuters customers can
click on [GALLEGOS/]
(Editing by Richard Beales and Martin Langfield)
Keywords: BREAKINGVIEWS NEWSCORP/MUNDOFOX
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