Television
Taking on Univision and Telemundo
By Diego Vasquez
Sep 3, 2009 - 1:10:04 AM

It sounds a bit like the plotline to one of Univision’s telenovelas: A scrappy newcomer overcomes the odds in a bad economy and knocks off the reigning champ to find success. At least that’s the hope for Estrella, the new broadcaster rolling out across the country over recent months in a challenge to longtime Spanish-language TV leader Univision and Telemundo. Estrella has already been broadcasting on Los Angeles’ KRCA, where its adults 18-49 viewership was up 30 percent during the July sweeps period compared to the same time last year, according to Nielsen. Estrella has clearances in about two-thirds of the country, but it’s continuing to add new stations, launching on digital frequencies in some markets. The bulk of its programming is original, but it’s staying away from the novelas that have prospered on Univision and Telemundo. Instead, the channel, which is owned by LBI Media, is offering a mix of shows, from comedy to drama, as well as local news and information programs. Still, Univision has dominated the market for years, so successfully that it now measures its viewership against the English-language broadcasters and now how far ahead it is of other Spanish-language channel. Winter Horton, chief operating officer at LBI Media, talks to Media Life about the challenge of launching during a down economy, how Estrella differs from its competitors, and what its goals are for the future.
 
Explain the launch strategy behind Estrella. How does KRCA fit into it?
 
I think our original strategy six or seven years ago was creating programming, and it was starting to take off on our own station, so we thought we would expand it into as many markets as we could.
 
So we started in Houston and Dallas and did well there, and now we’re making 56 hours of programming per week. So we knew the programming worked--we were No. 2 in Los Angeles to Univision.
 
The economy then took a turn and station values were up in the air, so we questioned if we needed to own all the stations or if we could take on affiliates. So we made inquiries and found some interest from great companies, and the rest was pretty easy. With the advent of digital television they had room for us on their .2s, and by going with big companies we’re on cable also.
 

What percentage of the country is the network cleared in?
 
I think right now we’re hovering at about 68 percent. When we launch we’ll still be there but in the next couple of months it should be 72 or 73 percent. Right now we’re in 18 of the top 20 markets, and 22 markets overall.
 

What is Estrella’s programming approach? How much will you be airing original content and how much is acquired?
 
It’s almost all original. We have a movie package where we air movies in the daytime. But otherwise we create formats targeting U.S. Hispanics, we’re not grabbing programming from Colombia or Peru or somewhere and repurposing it.
 
We make our programming look a lot like general-market shows, but they have Hispanic cultural sensitivities. And we have some already famous people from Latin America and we offer an alternative.
 
We don’t do novelas; Univision does a fantastic job there so we don’t compete. We have music, variety shows, comedy, dramas, lots of things to kind of counter-program the Univision model, which seems to be working.
 

Obviously you’ve been planning the launch for some time. How has the sour economy affected your plans or prompted you to adjust?
 
It really has affected our core business, but we see it as a great opportunity to expand a revenue base. Depending on who you talk to I’ve heard there is $1.5 to $2 billion in the U.S. Hispanic TV network business. We already produce the programming, and we know it works, so we think we have a legitimate shot at being successful.
 

Explain the setup in terms of ad sales. What is the SMRT and how are you selling Estrella? What ad categories are you hearing the most response from?
 
SMRT is our in-house rep firm we’ve had for the past 15 years. So as we add the network, we’re staffing up our offices. We’re kind of actively looking right now for network sellers to sell the product.
 
We’ve gotten good response from beer, telecommunications, with the census there should be some good spending, and also we’re trying to be creative with integrations. Since we make our own programming we can make some clients happy by including them in the programming itself, which gives us an advantage over some of the competition.
 

Who do you see as Estrella’s main competitors? And how will you differentiate yourselves from them?
 
I think Univision and Telemundo are the main competitors.

Whereas their formats rely on novelas, we’re going to offer something different. We’ll offer music, variety, comedy, drama and we’re launching a big talent contest this fall as well.

 
Why is there a need for another Spanish-language network?
 
Well, you’ve got Univision and Telemundo, and that’s not a lot of options for people to watch.

In the general market there’re a lot of networks, so I think the Hispanic market is a bit underserved. I think we have the programming that can be competitive; it’s already very well received and that’s why we think we have a great opportunity here.
 

What is the goal for Estrella one, two and five years down the line?
 
To be very successful [laughs]. I wouldn’t put numbers to it, but we’d like to keep growing. We’ve been around for 20 years and we’re patient, so we’re not going anywhere. We just want to have slow and steady growth, just like anybody else.
 

© 2010 Media Life