Another Spanish Net? Crazy Like A Fox

Twenty-six years ago, Rupert Murdoch's News Corp. rocked the TV broadcasting business with the launch of a "fourth network" to compete with ABC, CBS and NBC. Today, Fox tops them all, attracting more of the viewers that advertisers like most.

News Corp. is now trying to repeat that feat in broadcasting's parallel universe of Spanish-language TV. This fall, it will take on Univision, Telemundo and a host of smaller networks with MundoFox, a 50-50 joint venture with Colombian broadcaster RCN.

Media agencies, Spanish-language broadcasters, analysts, program producers and even rival networks believe that News Corp. can pull it off if it is smart about the programming and can assemble a solid lineup of affiliates.

Some also say the entry of another well-funded, well-branded broadcast network may boost the entire business, closing the large gap between Spanish-language TV's share of viewership and its share of the advertising dollars. And the agencies simply hope such a network will give them another advertising option and, perhaps, drive down prices.

“I love having more competition coming to the marketplace," said Steven Wolfe Pereira, EVP of MediaVest and managing director of MV42/MediaVest Multicultural.

"Our role as a media strategy, planning and buying agency is to add more value and more choices for our clients. So, having more competition from a premier company like News Corp. that is acknowledging the Hispanic market and investing in it by building a network to compete with Univision and [NBCUniversal's] Telemundo is great."

David Joyce, media analyst at Miller Tabak, said News Corp. clearly has an opportunity. "There are a lot of smaller networks that have tried to do this, like Azteca America. There is a lot of fragmentation, but it’s possible because, obviously, News Corp. has the financial heft."

Martin Breidsprecher, CEO of Azteca America, said Fox's entry could benefit all. “It signals that there is a great appetite for the Hispanic market in the U.S. Right now, we know that U.S. companies are not spending enough to reach Hispanics. This signals that there is money to be made in the U.S. Hispanic market.

“Competition is good. I think it will make us more vigilant and act more quickly."

After News Corp. announced the initiative last Monday morning (Jan. 23), Hernan Lopez, CEO of Fox International Channels, and other Fox executives at the NATPE conference in Miami spent two days talking privately to broadcasters about affiliating.

Among them was Bert Ellis, president of Titan Broadcast Management, a station group that could lend several stations to the enterprise. Ellis said he was impressed by what he heard.

"The presentation was very, very good," he said, noting that he had been an early affiliate of the Fox network when he was running Act III Broadcasting in the late 1980s. "They can bring a lot of assets to it .... They will get traction. They will get distribution."

Another was Barbara Laurence, who owns Spanish-language stations in Las Vegas, San Antonio, Louisville and Denver. With partner Carlos Vasallo and his film and TV libraries, Laurence has developed her own Mexican movie-based programming service for the stations, VasalloVision. But she remains open to MundoFox.

"With the recent U.S. census numbers, it is a terrific time for more options for Hispanic viewers in the U.S. You have so many Hispanics in this country and so few viewing choices. For so many years, there was no alternative to Univision. Telemundo was kept alive by the ad agencies that needed an option other than Univision, which would have been a monopoly.

"If you are an Anglo, you have hundreds of choices. Hispanics are growing and what do they have? Three or four choices, except on pay tiers [cable and satellite], and a lot of homes can't afford them."

News Corp.'s interest in the Hispanic market is being driven by the market's rapid growth. According to the 2010 U.S. census, the Latino population of 50.5 million is twice that of 1990 and 43% greater than it was in 2000.

In recent years, News Corp. has responded with three specialty cable networks in the U.S.: Fox Deportes, a sports channel; Utilisimo, a lifestyle channel; and Nat Geo Mundo.

With MundoFox, News Corp. is doubling down, going for the largest possible audience with programming of the broadest possible appeal.

For its part in the joint venture, News Corp. is providing ad sales, distribution, operations and playout, according to Lopez. RCN will provide much of the programming, including that for primetime.

Lopez is a co-developer of MundoFox and, for now, he is the network's chief executive and spokesman. But that will soon be changing. He said he expects to hire a CEO for the network within the next few weeks, noting that he has already interviewed a couple of strong candidates.

Lopez would not say what News Corp. is investing in the network, but he said the company is making a long-term commitment and he did not dispute a report in the News Corp.-owned Wall Street Journal that it would lose less than $50 million in its first year of operation.