Time Warner Cable is targeting the Latino audience in L.A. with a customized programming package that’s requiring them to hire Spanish-speaking workers and sell local advertising zones in new ways.
The goal is to dominate the demographic and not just in television, but in bundling cable with Internet and telephone services the cable industry’s Holy Grail of “triple play.”
Paquetazo (“Big Package” in Spanish) is a new programming line-up in both Spanish and English with an emphasis on sports, movies and children’s shows with appeal to Latinos. The package has 13 Spanish-language channels not available over broadcast or other cable. That means Paquetazo customers will have access “to the most Spanish-language content in the marketplace,” according to Time Warner.
“It’s an important initiative for the L.A. market, but honestly it’s important for Time Warner Cable nationally,” said Bill Ericson, regional vice president of marketing in the Los Angeles office. “Intuitively, we know this is where the market is going.”
The company will widen the concept to other markets with Latino populations once the L.A. model proves successful.
“This is the single biggest product launch we’ve ever done,” said Patti Rockenwagner, vice president of regional communications at Time Warner Cable.
Traditionally, cable operators have behaved like public utilities, offering the same service to all customers. But as satellite TV has encroached on their market with custom programming deals, the cable companies have answered in kind. At the same time, cable companies have branched into other services, notably high-speed Internet and telephone services.
Putting together Paquetazo involved complex negotiations with foreign TV producers, the purchase of satellite time and a bilingual marketing campaign all additional expenses for the cable operator. For Time Warner, the project meant hiring bilingual operators to take customer calls, recruiting bilingual technicians to visit homes and install the equipment, printing program guides in both languages, and translating monthly bills into Spanish.
“There are costs involved,” said Cynthia Perkins-Roberts, vice president of diversity marketing at Cabletelevision Advertising Bureau, a national trade group based in New York City. “But the systems have tried to price them in a competitive way. It also opens up the opportunity for bundling, where in addition to cable TV, you get phone service and a high-speed Internet connection.”
Particularly in the Latino market, where household income often trails the U.S. average, high price points limit market penetration. Paquetazo costs $34.95 per month, compared with the basic Time Warner TV package at $47.95 per month.
In conjunction with the Paquetazo launch, Time Warner has announced a separate service called International OnePrice phone service that provides flat-rate calling to 100 countries, including Mexico, Central America, South America and the Caribbean. The plan is not specific to the Hispanic market, “but it obviously appeals to that demographic,” Ericson said.
Paquetazo and OnePrice combined costs $49.95 per month, and all three services TV, phone and Internet total $79.95 per month.
It’s an example of the “triple play” that cable companies have been coveting. Paquetazo represents an early example of a cable company trying for the triple play in a foreign-language market.
Time Warner organized focus groups and two advisory committees to help choose the channels for Paquetazo. In addition to the eight Spanish-language broadcast channels available in L.A., the selection includes five Mexican channels, seven children and family channels, four Latino music channels and four sports channels.
When pursuing agreements with programmers, Ericson concentrated on the three genres of movies, sports and kids programming. That’s because research showed that Latinos like movies they can watch together as family viewing; sports functions as a cultural touchstone and appeals to males, in contrast to traditional Spanish programming such as talk shows and telenovelas that have drawn female viewers; and shows with young casts and music channels find a ready audience among Latino kids.
For advertisers, Paquetazo currently has available slots on only three channels: Galavision, a Mexican-centric outlet owned by Univision Communications Inc.; Fox Sports en Espa & #324;ol; and ESPN Deportes.
Time Warner expects to obtain the right to show ads on other channels in the next few months.
Although Time Warner spokeswoman Rockenwagner declined to discuss the cost range for a cable TV ad campaign, she said the geographic concentration of the Latino population will work to advertisers’ advantage. A stand-alone restaurant in South Gate, Downey or another predominantly Latino neighborhood can buy that zone rather than the whole market.
Until now, advertisers have had plenty of broadcast options in L.A. for reaching Hispanics, but Spanish ads couldn’t be targeted to specific cities or neighborhoods, according to Enrique Gil, president of ad buying agency Ethnic Marketing Group in Valencia. The prospect of geographic targeted ads will segment the market even further, “but it’s beneficial for local advertisers.”