March 26, 2015
By Patricia Ayala
During the Super Bowl broadcast last month, a Spanish-language reality series about a beauty contest was the most-watched TV show in the U.S. after the championship game itself.
Univision Communications Inc.’s “Nuestra Belleza Latina,” or “Our Latin Beauty,” outperformed ABC, CBS and Fox in both the 18-to-34 and 18-to-49 age groups, according to Nielsen. NBC aired the Feb. 1 New England Patriots’ victory over the Seattle Seahawks.
The results mark the third time in five years that a Spanish program placed second as the Super Bowl played out, underscoring Univision’s success in creating content for Hispanic audiences in the U.S., with average viewers about 13 years younger than its American competitors. And unlike those rivals, whose viewers increasingly turn to the Web for programming or record shows on DVRs, as much as 90 percent of Univision’s audience watches programs live, making it more appealing to advertisers.
“Nuestra Belleza Latina” features contestants vying for cash prizes and hosting gigs and is viewed by about 3 million people a night. The Super Bowl drew more than 114 million.
“We’re doing everything we can to make sure our talent is really engaging with the audience,” Rick Ehrman, Univision’s executive vice-president of corporate business development, said in an interview. ‘It’s fun, it’s a bunch of beautiful women.’’
Univision doesn’t disclose its ad rates and declined to comment on whether ads that run during “Nuestra Belleza Latina” cost more than those for its other programs.
Univision, part-owned by Grupo Televisa SAB, plans to go public this year, according to people with knowledge of the matter. The largest Spanish-language broadcaster in the U.S., it averaged about 1.8 million prime-time viewers ages 18 to 49 during the July ratings period known as the sweeps, beating Walt Disney Co.’s ABC and the Fox division of 21st Century Fox Inc. for the second year in a row, according to Nielsen. Ratings during this period help determine advertising prices.
The trend will probably continue as Hispanics are estimated to make up 29 percent of the U.S. population by 2060, up from 17 percent last year, according to a U.S. Census Bureau report. Growing demand for content tailored to this audience has led English-language producers such as Lifetime to create more programs featuring Hispanic actors like “Devious Maids,” a drama based on a hit Televisa series “Ellas son la Alegria del Hogar.”
‘Against the Trend’
With younger audiences watching its programs live, “Univision is swimming right against the trend of the wider industry,” said Ed Barton, a TV analyst at market researcher Ovum in London. The broadcaster has a “set of broad-based, mass market entertainment channels, and that’s exactly the reason why it’s getting those incredible rating numbers.”
Ratings for all Spanish-speaking TV in the U.S. increased by about 20 percent last year, according to Magna Global research. In the first half of 2014, events including the World Cup drove more than $100 million of incremental ad sales, bolstering Spanish-language networks’ revenue gains by 43 percent in the period.
Last week, Univision launched a mobile casino game application based on “Nuestra Belleza Latina,” taking advantage of research that shows Hispanics in the U.S. are more likely to own smartphones or tablets compared with the total population, according to data from Frank N. Magid Associates Inc., a media research company.
“They spend more time and money on average on mobile gaming than the typical American consumer,” Huuuge Games Chief Executive Officer Anton Gauffin said in an interview from New York. “It became a strategic experiment to see how well the marriage of a reality TV show and a mobile game can work.”
The union is paying off. The game, which updates as the reality series progresses and offers prizes such as personalized videos from contestants, has been downloaded more than 100,000 times. And after a week, it’s already the 8th most popular game of its kind, according to researcher App Annie.
New York-based Univision, whose co-owners include Saban Capital Group Inc., may seek to raise at least $1 billion in a U.S. initial public offering, people with knowledge of the matter said this month.
Televisa Executive Vice President Alfonso de Angoitia said on a conference call in February that an IPO was likely to take place “in the next 12 months to 18 months.” Televisa has an 8 percent equity stake in Univision and debt that could be converted into an additional 30 percent holding.
Univision’s high leverage of 7.9 times net debt over Ebitda, or earnings before interest, taxes, depreciation and amortization, could generate valuation concerns for its investors, according to Paul Sweeney, an analyst at Bloomberg Intelligence in New York.
“The peer companies for Univision -- CBS, Viacom, 21st Century Fox -- have spent a long time paying down debt and deleveraging,” Sweeney said. “That will be a challenge for Univision.”
Source: Bloomberg Business