Los Angeles is ground zero for fragmentation

Before I address the fragmentation issue, I would like to take a moment with a few lines about my last assignment which ended Friday with the closing of the sale. You see for the last five months I had the privilege to be the Trustee and oversee what was the first independent Spanish language television station in the United States as it was sold by NBC/Comcast to comply with an FCC mandate that only allows for the ownership of two television stations per market.

I want to thank Ron Gordon the President of the Telemundo station group who made this opportunity possible. You see, once you have been at Univision and Telemundo as I have, for some reason you get pegged as some antique that has no relevance in today’s Hispanic media landscape, nothing could be further from the truth. I also want to thank Scott Seeley and Manuel Abud for their support.

Truth be told, I had forgotten how much I missed the television broadcast business; the weekly commutes from Miami to L.A. went so fast that they felt like beam me up Scottie, the daily adrenaline rush of putting shows on the air would make those 5 hour energy drinks feel like taking a valium, the ability to touch people’s lives in real time, makes every other medium feel like slow motion. It truly is an exhilarating business.

On a personal note, I want to thank the Ch. 22 team who supported me during my tenure and who helped me make it possible for KWHY to re-connect with the independent roots that Germaine Valderrama so much nourished.

Fragmentation

If you want to see the future of Spanish language television you better spend some time in Los Angeles. It is truly ground zero for the fragmentation that is taking place.

According to Nielsen, after years of growth, the combined ratings for Spanish-language TV stations in Los Angeles have declined since 2007, particularly over the last two years.

Combined average audiences for six Spanish stations in L.A., Adults 18-49

ROS (M-Sun, 9A-Mid.)

2007: 319,000
2008: 311,000
2009: 306,000
2010: 246,000 (-20% yr to yr)
1Q11: 239,000

Primetime (M-F, 7-11P)

2007: 608,000
2008: 572,000
2009: 597,000
2010: 522,000 (-13% yr to yr)
1Q11: 501,000

Ratings declines are not due to increased viewing to English stations or to lower PUT levels, but to audience fragmentation and increased viewing to cable.

Quick facts on fragmentation in Los Angeles:

— Five Spanish-language network affiliates: the original “big two” of Univision and Telemundo, as well as TeleFutura, Azteca America and Estrella TV stations.
— Local independents: KWHY, KJLA and KBEH
— Growing number of Spanish-language cable channels – now numbering 31 in the Nielsen overnight ratings reports.
— Add to this the three new networks that Univision is about to launch.
— Most significant numbers are for the East Coast feeds of Univision and Telemundo available in virtually all Satellite and Cable TV households.

So what does this mean? It means that programming is still King. (that will never change) It means that with so many Spanish language television options you have to resort to non-traditional means to get the attention of your potential audience. It means, that if you have a local presence, (even with limited resources) you better be executing at 110%. It means that your sales organization better be setting the bar when it comes to best practices.

Lastly, it means that Spanish language television is here to stay. You see, for the first time in history of America you have a medium so strong that it is propelling the use of the Spanish language beyond what anyone ever imagined. It is a platform that is providing original and compelling content that is not found in the general market and those broadcasters who can execute accordingly, will thrive; no matter how fragmented the market gets.

By: Jose Cancela
jo**@*********sa.net
Jose Cancela is Principal of Hispanic USA Inc, a Hispanic Market Resource firm. He is also the author of “The Power of Business en Español, Seven Fundamental Keys to Unlocking the Potential of the Spanish Language Hispanic Market” Rayo / HarperCollins.