Univision's New TV Network To Launch in Tough Ad Times

Staff Reporter

Univision may be writing its own novela by launching a third Spanish-language network in the midst of the worst advertising market in decades. Like many of the heroines of these popular Latin American soap operas, TeleFutura has great potential but faces rough odds.

Executives at Los Angeles-based Univision Communications Inc. told analysts in December that they expect their new network, which debuts this week, to bring in between $80 million and $100 million in advertising revenues and capture 10 percent of the nation's Latino viewing audience in its first year.

While TeleFutura has a lot going for it, including the backing of the nation's fifth-largest network and access to popular Latin American programming, it will have a hard time living up to those expectations.

"I think their goal is pretty aggressive," said Alissa Goldwasser, an analyst with William Blair & Co. "My internal forecast is a bit more conservative. I'm looking at $70 million in ad revenue (for 2002)." Another analyst placed the figure at $60 million.

Univision officials did not return calls for comment.

The network paid $1.1 billion for USA Networks Inc.'s television station group to build the TeleFutura network, and Univision also worked hard on programming deals last month with hit-show producers Grupo Televisa SA of Mexico and Venezuela's Venevision, greatly increasing the choices available to the new network.

TeleFutura debuts as the No. 3 Spanish-language network, behind Univision and Telemundo. It will be broadcast on 44 stations (including KFTR-TV Channel 46 in L.A.) and reach 70 percent of Hispanic homes in the U.S. The network is betting on a counter-programming strategy offering an alternative to Univision and Telemundo with novelas in the day and movies and sports at night.

"Their bet is more on the younger generation of Hispanics who grew up in American culture and have different tastes," said Hernan Galperin, an assistant professor at USC's Annenberg School who studies Latin American media.

While TeleFutura's prime-time programming will appeal to advertisers looking to target a younger, more male Latino audience, it may not be able to generate the kinds of ratings that come from novelas on Univision and Telemundo. When Telemundo dropped novelas in primetime during the 1990s, the network's ratings quickly fell and recovered only when the novelas returned.

In going after young Latinos, TeleFutura faces the additional challenge of appealing to bilingual viewers who were born in the United States and may never have watched Spanish-language television.

"It's untested," said David Joyce, a senior analyst at Guzman & Co.

The network no doubt will benefit from the growing interest in Spanish-language media, recently boosted by NBC's proposed purchase of Telemundo Communications Group Inc. But it will offer an unfamiliar product at a time when few advertisers are in the mood to take chances.

Most media buyers will take a wait-and-see approach to TeleFutura, said Peter Keir, broadcast supervisor at L.A.-based media buyer Round2 Communications.

"We'll probably be booking it lightly in the beginning and, if it does well, add more later," Keir said. Round2 plans to begin buying time on TeleFutura in the second and third quarters of this year. Others aren't waiting. Toyota, Pepsi, Miller, Ford and Gillette are among the major advertisers that have purchased time on the network.

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