Networks better off apart
MEXICO CITY – They were the ultimate power couple: ambitious, successful and watched by the world. But mistrust, disagreements and jealousies began eating away at the relationship. Their breakup has millions of Spanish language soap opera fans wondering: What next?
The unhappy divorce of the top U.S. Spanish language network, Univision Communications Inc., and Latin America’s biggest producer of hit shows, Grupo Televisa SA, was a plot lifted directly from the telenovelas that made both wildly successful.
Now Telemundo, once relegated to a supporting actor role, is trying to win over viewers and emerge ahead of its rival, Univision.
The cliffhanger? The future of U.S. Spanish language programming, a market that has grown to more than 35 million Hispanics who make up at least 14 percent of the U.S. population and are driving the United States’ population growth. Analysts predict that advertisers will spend $1.4 billion this year to get their attention, a 10 percent increase over last year, and the competition among networks is expected to lead to more programming options.
This divorce started, as it would in most good soap operas, with a power struggle. The result could be more programming options for U.S. Hispanics.
Los Angeles-based Univision was looking for a buyer, and Televisa – already owning 11 percent of the company and supplying the network with much of its programming – began putting together a bid. But Televisa claims it was repeatedly shut out of negotiations.
When Univision’s board announced in late June that it had accepted a $12.3 billion offer from a consortium of private investors, Televisa issued a terse statement saying it was “disappointed.”
The relationship had already begun to sour before the sale. In May 2005, Televisa sued Univision to get out of a 25-year licensing agreement that gave Univision the exclusive U.S. rights to the Mexican broadcaster’s programming. That trial is scheduled to begin in June.
Televisa telenovelas are wildly popular, airing in 50 countries on five continents. In the U.S., popular Spanish-language shows often beat their English-language network competitors.
“The soap opera is what the audience most wants and is the most effective in terms of cost and sales, especially when they are produced in Latin America,” said Julio Rambaut, a former consultant to Univision.
If Univision doesn’t have access to shows like “La Fea Mas Bella,” or “The Prettiest Ugly Girl” – one of the most popular telenovelas in Televisa’s history – what will Univision put on the air?
Univision executives declined to comment for this article, but many speculate that the network will expand its original programming, much of which targets younger, more assimilated Hispanics.
Televisa’s message to U.S. Hispanics? Don’t worry. We will come to you.
The network said it’s exploring distributing shows on the Internet, a delivery method that is still only reaching a small percentage of the market.
Other rumors abound: the creation of its own U.S. Spanish language channel, or even a surprise partnership with an English-language network, or a potential agreement with Telemundo – although Telemundo says that isn’t being considered right now.
Televisa executives also haven’t ruled out a new offer for Univision, although that seems increasingly unlikely. Univision expects to close the deal with the private consortium in May.