Hispanic Network Affiliate Television Stations Become More Powerful Presence
June 16, 2005
While there has been little in the way of good news for broadcast television over the past several years, Hispanic network affiliated television stations are noticeable exceptions. Stations affiliated with Univision, TeleFutura, Telmundo and TV Azteca continue to expand with ever-increasing numbers of stations in many markets and entry into markets that previously had no Spanish-language television stations. The power these stations now wield is due to the explosive Hispanic population growth and the demand by advertisers to reach this market, all of which is culminating to cause revenues at Spanish television stations across the country to continue to increase at rates faster than the overall television industry.
A quick review of Hispanic population growth explains the expansion of Spanish language television. In 1950, the Hispanic population in the U.S. numbered only 4.0 million. By 2000, the population had reached 35.3 million, for an 800 percent increase over the 50-year period. In every 20-year period since 1950, the Hispanic population in the U.S. has more than doubled. One important demographic within the Hispanic population is the 18-24 age group, making up nearly 13 percent of the Hispanic population compared with 10 percent of the White population.
As a result of this phenomenal growth, Hispanics constitute a majority or a very significant percentage of the demographic in many television markets, and they are having a tremendous impact on how local television stations are operating and expanding. Local television stations now affiliated with one of the Hispanic networks have increased over the past five years. A quick review of the actual numbers shows this notable increase. In 2000 there were 97 local television stations operating in 44 markets affiliated with one of the Hispanic television networks. By 2005, that number had increased to 151, a 56 percent increase. Those stations are located in 53 markets. These changes are significantly increasing these stations’ numbers, audience, and revenue so much so that local Hispanic television stations are now the shining light in these markets.
One of the most recent conversions to JACK is WCBS-FM 101.1 in New York and fans are not happy. In fact, they are currently organizing to protest the format change at a rally next Tuesday (source: Radio Ink, CBS-FM Fans Won't Go Quietly). But other markets are happily embracing the new format, and growing as a result in the respective markets.
These developments in Hispanic television have not escaped the attention of local retailers and advertisers who have become intensely interested in reaching this important group of viewers. This section of the local television market has been one of the strongest of an otherwise lackluster local television marketplace in recent years, which will cause these stations to continue growing in importance in the local television markets.
Interestingly, in some of the markets with Hispanic network stations, there are no full-power unaffiliated stations available. In fact, nearly half – 73 stations – of the Hispanic network affiliates are either Class A or Low Power television stations. Not operating at full-power does not hamper these stations as many are able to receive carriage on their local cable systems. Now, cable systems, recognizing the importance of this demographic group, are looking to provide more Hispanic programming to attract this growing group of consumers and are willing to offer carriage.
Hispanic network affiliated stations are also attracting greater audiences. For example, full-power Hispanic network affiliates saw their share of local commercial audiences rise from 7.2 percent to 8.2 percent from 2000 through 2004. Some of these stations attract audiences much larger than the average, with KLDO in Laredo, TX attracting 45 percent of the viewing to local commercial television stations, followed by KINT in El Paso, TX attracting 25 percent of their local market’s audience.
Similar success has occurred in building revenue at historically low income producing stations. BIAfn estimates that full-power Hispanic network affiliates saw their shares of local advertising revenues increase from 5.9 percent to 7.3 percent between 2000 and 2004. Some of these stations generate substantial amounts of revenues, with KMEX in Los Angeles, CA estimated to generated $130 million and WXTV in New York, New York generating $79.2 million.
As a total group of stations, the revenue growth has been remarkable. Below is a chart showing the annual growth rate for revenues for all stations as well as only the stations affiliated with a Hispanic network. Note that the percentage change reflects not only the improved revenue position of these Hispanic network affiliates but also the fact that there have been steady increases in the number of stations affiliated with these networks.
In fact, in 12 of the 53 markets that have stations affiliated with one or more of the Hispanic networks, the revenue shares of Hispanic affiliated stations exceed ten percent. These top Hispanic television revenue share markets are listed below with the total revenues earned by these stations, as well as the share of local advertising enjoyed by these stations.
Given the widespread surge in the Hispanic population, it should not be surprising that Hispanic television stations have benefited in recent years. From the results discussed here, these Hispanic television stations have seen strong growth in their audiences and even stronger growth in their revenues. As more of the newer Hispanic network affiliated stations established themselves, there will be increasingly more markets that will have greater than 10 percent of their market revenues going toward Hispanic television. While the number of local stations affiliated with these networks may not grow as fast, the audiences attracted to these stations, as well as the revenues generated, will see substantial growth. In fact, total revenues generated by these stations should continue to outpace the growth of entire local television market by 2 to 4 percent. It should also continue to be the shining light of the local television market.
This article was written by Mark R. Fratrik, Ph.D. is a Vice President of BIA Financial Network (BIAfn).
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