With the advertising business slumping so badly, it hardly seems the moment to start selling commercial time on a new television network.
Or does it?
Enter TeleFutura, a Spanish-language network of Univision Communications of Los Angeles that made its debut on Monday. TeleFutura can be seen on 42 stations and hundreds of cable systems nationwide, making it accessible to about 80 percent of the Hispanic population of the country, Univision said.
TeleFutura will generate $100 million in revenue and break even in its first year, Univision officials say, with only minor cannibalization of the existing audience for the parent network, the top Spanish-language broadcaster in the United States.
As the last census made clear, the nation's Hispanic population is exploding, and now totals more than 35.3 million people, or nearly 13 percent of the population. And with revenue last year of $550 million to $575 million, Univision's existing operations, which also include the Galavisión cable network, already dominate the Spanish-language television market, regularly drawing about 80 percent of its audience. The rest goes to the much smaller Telemundo network, which was recently acquired for $1.98 billion by NBC, a unit of General Electric.
Even so, there is potential for more growth, said Ray Rodriguez, president of Univision's networks division, which operates out of Miami.
"A huge percentage of potential viewers still aren't watching us," he said - referring to people who live in Spanish-speaking households but who nevertheless prefer English-language television. Indeed, despite the wide availability of its programs and those of Telemundo, Univision estimates that 40 to 45 percent of the viewing time of Spanish-dominant households is still devoted to shows in English.
That is because many people do not like the prime-time programming mix of Spanish-language television, Mr. Rodriguez said. Both Univision and Telemundo lean on shows like telenovelas, or soap operas, and therefore attract older and female viewers. By comparison, TeleFutura plans to use counterprogramming to attract a younger and larger male component. Univision predicts that only 25 percent of TeleFutura watchers will be Univision defectors, with the rest coming from Telemundo or English-language channels.
The network's initial program schedule is certainly proof of its strategy. For example, though it will show telenovelas, they have been relegated to daytime instead of prime time. Evening hours will be devoted almost exclusively to films, many of them action-oriented movies like "Tango and Cash" and "Missing in Action," both of which are scheduled for later this week. There will also be boxing on Friday nights; a nightly sports news show, "Contacto Deportivo"; extensive soccer coverage and a contemporary-music top hits show on weekend afternoons.
That music show, "La Cartelera Pepsi" ("The Pepsi Chart") is sponsored and produced by the Pepsi- Cola division of PepsiCo. Along with companies like Johnson & Johnson, AT&T, Wendy's International, Anheuser-Busch's Budweiser, Ford Motor and Toyota Motor, Pepsi is a charter advertiser on TeleFutura, Mr. Rodriguez said, meaning that the company "came in early" and "cut good deals."
Except for saying that TeleFutura's rates are "much lower" than those for Univision, Mr. Rodriguez would not elaborate. Nor would network officials disclose the sizes of the audiences they are promising to those who run commercials on TeleFutura.
Advertisers were similarly silent; for example, Giuseppe D'Alessandro, director of urban marketing for Pepsi-Cola, would not disclose the amount his company is spending on "La Cartelera Pepsi." But he did say that all of PepsiCo's advertising on TeleFutura would be in addition to its spending on Univision's main network. And he noted that PepsiCo's soft drink, Frito-Lay snack and Tropicana juice divisions would be doubling their combined television and radio spending in the nation's Hispanic market this year, an increase of "over $10 million."
That, of course, is the kind of talk that is music to the ears of people like Mr. Rodriguez, who sell time to advertisers on Hispanic stations. But those who follow the industry for securities firms remain a bit skeptical, especially given the national economic climate.
Despite Univision's rosy prediction that TeleFutura will break even, Paul T. Sweeney, a broadcast analyst at Credit Suisse First Boston, said, "We think that TeleFutura will lose between $15 million and $20 million this year."
That "might or might not be a big deal," Mr. Sweeney said, depending on whether the new network's viewers come primarily from Telemundo or English-language stations, as predicted, or whether they come instead from Univision itself.
"That's our big question," he said. "And we're taking a wait-and-see approach until we know."
Bernard Stamler, The New York Times. January 16, 2002
Copyright © 2002 The New York Times. All rights reserved.