Few were surprised, then, that when Univision, the leading Spanish-language television network, announced in February that it was looking for a buyer, media companies throughout the Western Hemisphere reacted with a frenzy of interest. Univision is a plum target: It is the fifth largest network in the United States, and has a self-proclaimed reach of 98 percent of Hispanic households. In 2005, it boasted $1.95 billion in net revenues and a 23 percent increase in viewers among the prized 18-to-34 demographic.

The list of potential suitors includes News Corp., Disney, Time Warner, CBS, Mexico’s Grupo Televisa and numerous private equity firms. All believe that Univision, which is valued at approximately $12 billion, can deliver unprecedented access to a Hispanic marketplace, which has a current buying power estimated at $740 billion and that is projected to exceed $1 trillion by 2010.

Univision is often credited with uniting the Hispanic marketplace in the U.S. It reaches Puerto Rican and Cuban immigrants in the North and Southeast and Mexican immigrants in the Southwest. Since its humble birth in 1961 as a single UHF station in San Antonio, Univision has been blessed with a continual influx of new Spanish-speaking immigrants to the United States, a renewable audience hungry for homeland programming. With nearly 40 percent of Univision’s programming lineup purchased from Grupo Televisa (also an 11 percent stakeholder), these new immigrant viewers have not been starved for familiar entertainment.

But whoever buys Univision may ultimately be disappointed. The Hispanic market in the U.S. cannot be captured solely by a common language. Most Hispanics in this country are second- or third-generation and are either bilingual or English dominant. The major media companies now vying for Univision will find that Hispanics have a greater allegiance to good programming than to the Spanish tongue. Univision’s formidable grasp on the U.S. Hispanic market will be threatened by the changing tastes of an evolving demographic: Births now surpass immigration as the main driver of population growth, and second- and third-generation Latinos are as apt to watch English-language as Spanish-language television.

Tongue Lashing
According to research by the Pew Hispanic Center, first-, second- and third-generation Hispanics exhibited marked differences in language dominance. Pew found 72 percent of first-generation Hispanics are Spanish-speaking dominant and 24 percent are bilingual, while second-generation Hispanics are 46 percent Spanish dominant and 47 percent bilingual. Third-generation Hispanics are 78 percent English dominant and only 22 percent bilingual. With births surpassing immigration as the growth driver of the U.S. Hispanic population, this may present a sizeable issue for Univision, which is bullish on broadcasting only Spanish-language programming and advertisements. With growth slowing among first-generation viewers, Univision’s audience figures could plateau, if not decline, on the network’s current programming path.

Univision’s primary Spanish-language competitor, Telemundo, has taken notice. Since its 2002 sale to NBC for $1.98 billion (plus $700 million in debt), Telemundo has diversified its strategy for reaching U.S.-born Hispanics. Popular news personality Maria Celeste Arrarás (who was once news anchor at Univision) now regularly contributes to NBC’s Today Show and Dateline. Telemundo also sinks considerable resources into original programming produced in the United States specifically to target a U.S. Hispanic audience. Telemundo has become the second-largest original producer of Spanish-language content in the world. Although Telemundo still lags considerably behind Univision in ratings, in the long run, its strategy may prevail.

In addition to Telemundo, Univision faces other competition in the market it now dominates. English-language broadcasters are rapidly diversifying casts and characters to better reflect this country’s true diversity. Also, ABC, NBC and Fox are developing English-language versions of the telenovela, a melodramatic format long popular with Hispanic viewers. ABC’s Desperate Housewives, arguably an Anglicized version of a telenovela and quite popular with U.S. Hispanics, has made plans with Buena Vista International Television to produce Spanish-language versions of the show to be distributed in Latin America.

During the spring’s immigration debate that sparked rallies throughout the United States, some articulated a fear that the sheer numbers of Spanish-speaking immigrants entering the U.S. could eventually overwhelm our English-dominant culture. Business owners hoping to capture the growing Hispanic market should reject this theory. Across generations, the great melting pot continues to erode the traditions and linguistic preferences of all those who reach our shores. Over time, it could also erode Univision’s market share.
 
Photograph by Matt Mahurin.

David Arnerich is a media analyst and writer based in Los Angeles.