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Hispanic Media

Economics

Whatever the shifting demographic makeup of the U.S. means for the ethnic media in the long-term, the short-term outlook is positive. While mainstream print media are suffering economically, Hispanic outlets are still seeing growth, according to data from the Latino Print Network. The growth is smaller than in recent years but a greater bulk of it came from one of the most promising areas—national advertisingAd dollars over all were up 4.6% in 2005, to $996 million, from $923 million the year before, an increase of $73 million, or 7.9%.1 That’s close to dead even with 2004’s 8% jump ($69 million), but slightly below the 9% of 2003 (also $69 million). And there were even bigger increases earlier in the decade. Still, the numbers are a healthy increase in an era when print media outlets are hurting.

What’s more, the most significant change in 2005 was where the money was coming from. There was a big jump in national advertising dollars for Hispanic newspapers. About 37% of all their advertising was national in 2005 compared to only 18% in 2004.2 3

National v. Local Ads in Hispanic Newspapers
2003-2005
Design Your Own Chart
Source: Kirk Whisler & Latino Print Network, Carlsbad, CA

That is by far the highest number on record for national advertising in the Hispanic newspapers. In large part it may be due to the growth of national partnerships, such as Impremedia, a group of established newspapers with readers in Los Angeles, New York and Chicago (see Ownership). The Latino Print Network in general and Impremedia in particular were designed to go after the national dollars by creating consortiums for big advertisers to contact about ad buys.

And the growth in those ads is significant. There are limits to how much income can be drawn from only local or primarily local advertisers. There are small businesses that serve ethnic populations in all communities, but larger, formerly local businesses are increasingly part of bigger national chains. Locally owned department stores are a vanishing breed. The Marshall Field’s (Chicago), Hecht’s (Washington) and Hudson’s (Detroit) stores of the world are now Macy’s in name as well as ownership. In many places Starbucks is not only the largest coffee shop chain, it also has more shops in town than several of the next biggest combined. And local supermarkets have a hard time competing with Wal-Mart’s superstores.

In an economy that is increasingly nationalized, media that appeal to national advertisers have an advantage. Big companies can make one ad buy and deal with one sales department that can offer them consumers in several cities. The growth of those national numbers is a good sign for the longer-term health of Spanish-language publications.

Hispanic U.S. Newspaper Ad Revenue
Select years, 1970-2005
Design Your Own Chart
Source: Kirk Whisler & Latino Print Network, Carlsbad, CA

In another positive sign, the ad increases in 2005 (the most recent year for which there are data) carried through for all the types of the newspapers that LPN measures — daily, weekly and less-than-weekly. Dailies stood out in particular as their dollars grew to $611 million from $566 million — an increase of $45 million, or nearly 8%. Weeklies saw their ad revenue jump in 2005 almost 7%, to $346 million, from $324 million the previous year. Less-than-weeklies grew to $39 million in 2005 from $33 million in 2004, a robust 18%.4

Hispanic Newspaper Ad Revenues by Publication Circulation, 2003-2005
Design Your Own Chart
Source: Kirk Whisler & Latino Print Network, Carlsbad, CA

Other Ethnic Print Media

Like audience figures, economic data are hard to track for many of the ethnic media. Other than Hispanics, who have two national TV networks in Univision and Telemundo and a somewhat nationalized print face in the Latino Print Network, the media for most ethnic groups are scattered and highly localized.

Some ethnic groups are served by large newspapers, as Chinese-Americans are with Sing Tao, which says it has more than 150,000 in circulation with its editions in San Francisco, Los Angeles and New York. But the paper, which traces its roots back to 1938, is based in Hong Kong, and economic numbers — particularly numbers broken out for the U.S. market — are difficult to find.5

Broadcast Outlets

On the broadcast side of the Hispanic media, Univision, which was sold in 2006, is still, by far, the leader. The company had a good 2005 (again the latest data), but not as good as it had seen in recent years, though the fall-off may have stemmed more from FCC actions than from other factors.

Total revenues for 2005 rose $166 million from 2004, an increase of 9%. That was small compared to the $475 million (36%) increase the company had seen in 2004.6

The profit picture for 2005 was more worrisome. Net profits (revenues minus expenses) declined 27%, to $187.2 million, from $255.9 million in 2004.7

Univision Net Income, 2001-2005
Design Your Own Chart
Source: Hoover’s Online, http://www.hoovers.com/univision/–ID__51512–/free-co-fin-factsheet.xhtml

The drop of about $69 million was the first decline in net income the company has seen in the new century.

Still, the 2004 figures were exceptional, and despite the drop in Univision’s 2005 profits, the company was ahead of its 2003 figure of $155.5 million.8 What’s more, there is every reason to believe that much of the decrease was the result of a Department of Justice requirement: that Univision sell off shares of subsidiary Entravision to decrease its stake to 15%.9

Is Univision, a true ethnic media giant, running into limits to its growth because of government regulations, as some mainstream outlets have? Is there a point when the company simply can’t grow much bigger because it has gotten into every market it could?

Heading into 2007, analysts were split on the outlook for Univision. Most stock analysts had moved the company from “strong buy” or “buy” to “hold.” But Goldman Sachs, for instance, still believed the company had many good days ahead. In its first report on the Spanish-language media industry, issued in late 2005, Goldman said that the field’s audience growth left it in the best position to “lead in the monetization opportunity” presented by the nation’s growing Spanish-language audience, particularly because it expected most growth to happen in TV and radio. But the report also said growth “may be less linear” or “lumpier” than in the past, and it did not rate other Spanish-language media properties as buys. Goldman, for instance, gave Entravision a neutral rating. It also said the radio company Spanish Broadcasting Systems, which has stations in denser Hispanic markets such as New York, Los Angeles and Miami, would under-perform because it seemed revenue growth was slowing in part because the markets were saturated.10

As of 2006, in any case, Univision had become largely immune to some of the bigger issues affecting other broadcast outlets. The network had not witnessed a loss of viewers, and in some markets at some time slots its newscast was the ratings leader. And Univision ended the 2005-2006 television season as the as the fourth-largest broadcast network in prime time among adults 18 to 24, beating NBC, UPN, and WB. Over all, among all audiences it was the nation’s fifth-largest broadcast network, behind ABC, CBS, NBC and Fox.11

Economic data for the other big Spanish-language broadcaster, Telemundo, a subsidiary of NBC, were unavailable for 2006. Telemundo’s financial numbers are embedded in the annual report of General Electric, NBC’s parent, but are not separated out.

Hispanic Media Online

Much has been made in the mainstream media of the loss of audience to other more segmented outlets, particularly the Internet. The impact of the Internet on Spanish-language media is not easy to track, but it apparently has had less effect for now on the bottom line or audience. And as noted above, circulation of print outlets has grown and ad revenues, while slowing a bit, are still growing.

But ironically, that isn’t necessarily good news for those Spanish-language media; it could lull them into a false security. Experts in the field told PEJ that there simply aren’t enough ethnic media Web sites, and that the lack of them is one of the bigger concerns the Spanish-language and other ethnic media face. “The ethnic media are five years behind the times when it comes to the Internet,” New America Media’s executive director, Sandy Close, told PEJ at a meeting of ethnic media representatives in Washington. Most ethnic print outlets, NAM’s largest constituent group, do not have a strong Web presence, she says, and they risk losing the next generation of ethnic media consumers. Smaller papers with 15,000 to 20,000 circulation have almost no Web presence at all, says Kevin Weston, NAM’s Director of New Media and Youth Communications.

There may be some long-standing explanations for that lack of interest in the Web, especially for African-Americans and Hispanics. A 2005 Children’s Partnership study found that white and Asian children are twice as likely to have broadband Internet access at home than their African-American and Latino counterparts.12

“The impact of the Web is much less marked on Spanish-language print,” Edward Schumacher-Matos, publisher of Rumbo, told PEJ in an e-mail interview “because so many of our readers (first generation) are not online. Their kids are, but that is a different story … Hispanic newspapers, both Spanish and English, are in many ways akin to community papers — we serve a targeted ethnic community — which also aren’t so affected by the Web because the content is exclusive. There aren’t Web sites that offer local news for the Hispanic community, and the national sites are too generic.”

The story of the Spanish-language broadcast media and the Internet, at least where multi-platform giant Univision is concerned, is quite different.

Univision has a strong presence on the Web. For six consecutive years Univision.com has been found to be the Internet’s most-visited Spanish-language in the U.S. by a wide margin. A survey by Simmons Research, a consumer study organization, found that the site has twice the Spanish-dominant and bilingual visitors as Yahoo en Espanol and four times the number of MSN Latino. The survey found that Univision.com scored an average of 11 million unique visitors a month, up from 10 million in 2005.13

While those numbers make Univision.com the king of the Spanish-language Web in the U.S., they leave it far behind the most popular English-language sites. Using a random month as a comparison (July 2006), Univision.com wouldn’t even place in the top 50 sites, according to comScore, a company that measures Web traffic.

Top 50 Web Properties, July 2006

Rank Property Unique Visitors in thousands
Total Internet Users 173,191
1 Yahoo Sites 129,439
2
Time Warner Network 121,068
3
Microsoft Sites 117,791
4
Google Sites 103,860
5
eBay 75,814
6
MySpace.com 54,522
7
Ask Network 52,061
8
Amazon Sites 46,788
9
New York Times Digital 38,133
10
Verizon Communications 36,605
11
Weather Channel 35,021
12
Apple Computer 31,102
13
Viacom Digital 30,767
14
CNET 30,468
15
Adobe Sites 30,122
16
Expedia Inc. 29,724
17
Monster Worldwide 28,409
18
Wikipedia Sites 28,121
19
United Online, Inc. 26,788
20
Wal-Mart 26,550
21
Gorilla Nation Media 26,448
22
Disney Online 25,879
23
AT&T, Inc. 25,190
24
Lycos, Inc. 23,688
25
Bank of America 23,500
26
Target Corp. 23,394
27
CBS Corporation 20,855
28
Real.com Network 20,854
29
CareerBuilder LLC 20,802
30
Gannett Sites 19,661
31
Shopzilla.com Sites 18,602
32
Vandare Media 18,553
33
Comcast Corp. 17,644
34
ESPN 17,336
35
Cox Enterprises Inc. 17,126
36
ARTISTdirect Network 16,959
37
Trip Network Inc. 16,518
38
WhitePages 16,450
39
E.W. Scripps 16,094
40
YouTube.com 16,080
41
Weatherbug Property 10,016
42
Orbitz.com 15,802
43
EA Online 15,681
44
Photobucket.com LLC 15,551
45
iVillage.com 15,227
46
Capital One 14,960
47
Dell 14,745
48
Facebook.com 14,365
49
JPMorgan Chase 14,361
50
Overstock.com 14,335

Source: comScore Media Metrix

It would finish below ESPN with 17 million unique visitors, You Tube with 16 million and Facebook with 14 million.

But the better comparison might be Yahoo, which scored 129 million visitors, and Google with 103 million. Univision.com is not a news site, it is a full-service Spanish-language portal with front page links for TV, music, shopping, finance, sports and news, among other things. In appearance it may most closely resemble AOL.

That leaves Univision in a good place as audiences transition to the Web, which increasingly is an omnibus provider of services to users.

And Univision’s news site is not an afterthought in the mix. It won a bronze medal at the 2006 North American awards of the Broadcast Designer Association, an organization of professionals in motion graphics, finishing behind CNN and Court TV.

There are still some longer-term economic issues lingering over the Spanish-language media. For instance, what about the rise of small markets that seems to be foretold in the Census data showing the spreading out of ethnic groups? Is that good news for a big broadcaster like Univision? And what will it mean to the smaller print outlets, the kind that often lag in Internet presence, that inevitably will sprout in those places? In the short run, however, rising circulations and viewerships indicate Spanish-language outlets are set to do well.

Footnotes

1. Hispanic Publication Advertising Sales in 2005, data sheet from Kirk Whisler

2. Ibid

3. The LPN numbers are self-reported, but they are the best available.

4. Ibid

5. Totals for Sing Tao from NCM Directory

6. Hoovers financial statement for Univision

7. Ibid

8. Ibid

9. Entravision press release, February 27, 2006. Entravision is a Spanish-language media company that owns television stations, radio stations and outdoor billboards. .

10. U.S. Media: Broadcasting. Spanish-language media initation. “Mind the Gap.” Goldman Sachs, November 2005

11. Univision press release May 25, 2007

12. Children’s Partnership Study “Measuring Digital Opportunity for America’s Children” June 2005, p. 29

13. Hispanic PR Wire release, September 18, 2006