Spanish Language Radio Is Here To Stay.

Spanish language radio, a bright spot in a tough business

When the announcement came this month that radio morning show host Luis Jimenez had jumped ship for a reported $5 million a year, the reaction from many was surely, “Who? For how much?”

The truth is, if you don’t know who he is you don’t know radio.

For Spanish speakers across the tri state area, $5 million for the top-rated mastermind behind the immensely popular “El vacilon de la mañana” is right in keeping with what he does for radio station ratings. The show attracts millions of loyal listeners during morning drive time. It counts 900,000 in the New York Metropolitan area alone, glued to Jimenez and crew’s mix of comedy, song parodies, crank calls and celebrity interviews.

In fact, break it down, and Jimenez’s rumored $5 million deal with Univision works out to a little over a buck-a-year for each of his estimated 4 million or more daily listeners.

Numbers like that repeatedly made the show the No. 1 in the Big Apple, and not just in Spanish. Time and again, it ranked ahead of anything else on the air during that time, in English or Spanish. In fact, before Howard Stern exited to satellite radio in 2005, El vacilon’s ratings frequently beat the shock-radio king’s in the New York region.

But Jimenez is not alone. Spanish-language radio is beating out English-language stations nationwide, outpacing the general market in both audience growth and revenue. And that’s not expected to end any time soon. Monterrey, Calif.-based Kagan Research predicts ad revenue at Spanish-language stations will grow at more than double the overall industry rate through 2010.

Univision and SBS both boasted double-digit year-over-year ratings gains in 2006, and Spanish-language stations across the country are overtaking standard English-language programming. The Washington Post recently reported that while fewer than 750 of the nation’s 12,500 stations broadcast in Spanish, “the audience share of Spanish-language stations now collectively surpass that of many traditional radio formats, including country music, rock and Top 40.”

And, in head-to-head competition, Spanish-language outlets are beating their English-language counterparts in markets across the nation. Also, while English-language radio operators are seeing flat ad revenue growth and ratings slumps, Hispanic Business Magazine’s HispanTelligence estimated in December that local Spanish-language stations in the top markets saw growth of 4 percent in ’06 over ’05, to $512 million, and that national numbers were up nearly 7 percent, to $214 million.

Kagan is projecting more of the same in the years to come, with an average growth of 5.3 percent every year through 2010. This year, the research firm predicts Spanish-language radio ad revenues will grow 6 percent, far more than the 2 to 3 percent forecast for the industry as a whole. After that, Kagan expects growth of 5 percent a year through the end of the decade.

The ratings and revenue boom is being driven by two major factors, according to Kagan’s Deanna Myers. First, advertisers recognize that Latinos are the biggest and fastest growing group in the United States . Second, advertisers know that with numbers come dollars. Hispanic buying power already tops $800 billion and is expected to hit $1 trillion in three years.

Some non-Spanish operators have already caught on. Clear Channel, which owns primarily English-language stations, has shifted to Spanish-language formats in 28 markets since 2004.

Right now, they are in the process of selling off 448 of their stations. But only two of the ones up for sale are Spanish-language stations.

Maybe Clear Channel knows something: if you’re looking to grow, Spanish is the way to go.

By Jose Cancela is Principal of Hispanic USA Inc, a full service Hispanic market consulting firm. He has also authored his first book due out Mar 13th.

“The Power of Business en Español, Seven Fundamental Keys to Unlocking the Potential of the Spanish Language Hispanic Market” Rayo / HarperCollins.

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