Will the real Univision Communications Inc. please stand up?
Is it the company that reported an 8 percent rise in third quarter net income, driven by stronger ratings and advertising sales? Or, is it the company that just cut its workforce 5.9 percent and still suffers from advertisers' unwillingness to pay top dollar for its Hispanic viewership amid heightened competition?
Most likely, a little of both.
Longtime followers say that Los Angeles-based Univision is acting more like the profitable diversified media giant it has become cutting costs and viewing companies such as Walt Disney Co. as rivals even as it continues to face challenges specific to Hispanic broadcasters.
"When you look at how often Univision beats the English-language networks on certain nights, they really are no longer operating in a niche, they're competing in the general market," said Rosa Serrano, senior vice president, multicultural group accounts, for the media buying agency Interactive Media.
But there is the issue of its ad rates, which have consistently lagged behind its English-language competitors because of advertisers' demands for a discount. Local spots on Spanish-language stations still sell at a 30 percent discount to their English-language counterparts.
That's despite the Univision network averaging 1.26 million viewers in the age 18-34 demographic during prime-time in the most recent quarter, the second highest of all broadcast networks, according to analyst Jonathon Jacoby, who follows Univision for Banc of America Securities.
One change that Jacoby said could close the disparity in advertising rates would be Univision's inclusion in the standard Nielsen Television Index, which would enable media buyers to easily compare the Univision network with the major English-language broadcast networks.
Moody's Investors Service Senior Vice President Glenn Eckert, author of a recent report on Spanish-language media, said that advertisers allocate 5 percent of their media buys to Spanish-language media even though Hispanics now comprise more than 14 percent of the U.S. population. "Hispanic household net worth still remains lower than that of the general population, potentially making them a less-attractive target for some high-end advertisers," he wrote. But Eckert also cited studies that Hispanic disposable income is growing more than 10 percent annually.
Officials with Univision did not return calls for comment.
Univision owns the Univision and TeleFutura broadcast networks, the Galavisi & #243;n cable network, 59 television stations and 66 radio stations, as well as three record labels, while its Univision.com portal is the top Internet destination for U.S. Hispanics.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Univision's New TV Network To Launch in Tough Ad Times
- Univision, Secure in Its Domination, Reaps Spanish-Language Rewards
- COMPETITION---Univision Facing Stiffer Competition After NBC Deal
- Hispanic Hit Parade
- BROADCASTERS---Univision Joins Industry Shift to Niche Programming
- Mexican Mainstay Hits Airwaves for Sweeps
- Telemundo Making Changes to Meet New Competition
- Entravision Buys Florida Radio Station