What A View! Univision Radio President Gary Stone Sees Blue Skies For Hispanic Radio (09/17/07)
By Editor-In-Chief Joe Howard
It’s been a busy year for Univision Radio’s parent company Univision Communications. Earlier this year, an investment group completed a $12.3 billion deal to acquire the company, and swiftly installed a new CEO, Joe Uva, to guide Univision’s multi-platform operation.
An integral part of that operation is Univision Radio, which owns 69 stations in 16 markets, including Los Angeles, Miami, Chicago, and Houston. The station group generated $381.6 million in net revenue in 2006, a 6.3 percent increase over 2005.
At the helm of Univision Radio is Gary Stone. A 38-year veteran of the radio business, Stone was named president/COO of the division in 2006, but he’s actually been with the company since its days as Hispanic Broadcasting Corp. Univision acquired HBC for $3.5 billion in 2002, so getting used to new owners is nothing new to Stone. And Stone is welcoming the new regime, as he says the new leadership is interested in utilizing all of the company’s platforms to connect with Univision’s target audience, Hispanic consumers known for their loyalty to their media outlets.
“Joe Uva’s direction is to always do what’s best for the company, and for the advertiser,” says Stone. “The most important thing is to meet the needs of the advertiser. If they need to buy more television, or more radio or more Internet, and we’re able to offer those various platforms, then we’ll ultimately sell more product and services. We all understand that. We’re trying to approach our advertisers so they get a marketing plan that generates the most results.”
Stone also believes that great gains can be made by cooperatively utilizing the company’s many platforms. “The cross promotion between radio and television has done so well; it’s been one of the easiest things we’ve done. It’s certainly been beneficial to radio to be on television 52 weeks out of the year, as it has for television to be on radio.”
He also thinks Univision is uniquely poised to realize these synergies. “I think we’re the right size company to make some decisions and do some things that our larger counterparts might have more difficulty getting done as easily,” Stone says. “We have a handful of people who are running the various divisions. We all know and like each other, and the result is that we can do things together.”
RadioInk: Do Univision’s new owners have any changes in store for the radio divsion?
Gary Stone: I don’t know if there are many specifically for radio. Across the company, we’re continuing to cross promote between the different platforms. We’re going to be out in the marketplace more as we syndicate programming, and as we help advertisers to recognize the need to buy Spanish media. We’re trying to create more awareness of the Hispanic population and how it’s growing, and how that listener base relies on Univision for their entertainment.
RI: Do you feel that the new owners have a commitment to radio?
GS: Absolutely. The cross promotion between radio and television has done so well; it’s been one of the easiest things we’ve done. It’s certainly been beneficial to radio to be on television 52 weeks out of the year, as it has for television to be on radio. That is a nice marriage right there.
I think we’re the right size company to make some decisions and do some things that our larger counterparts might have more difficulty getting done as easily. We have a handful of people who are running the various divisions. We all know and like each other, and the result is that we can do things together. CEO Joe Uva’s direction is to always do what’s best for the company, and for the advertiser. The most important thing is to meet the needs of the advertiser. If they need to buy more television, or more radio or more Internet, and we’re able to offer those various platforms, then we’ll ultimately sell more product and services. We all understand that. We’re trying to approach our advertisers so that they get a marketing plan that generates the most results.
RI: How does the Internet work into the mix?
GS: The Internet is a big part of it. One of the things we keep hearing from advertisers is that they want to reach the audience in 360 degrees — when they wake up in the morning, when they go to bed at night. By putting together the different platforms — television, radio, and online — we’re able to do that.
RI: Are you making progress with advertisers who haven’t in the past spent money to reach Hispanic consumers?
GS: We are, because our growth rates for revenue are so healthy. We’ve seen tremendous growth, especially compared to English-language counterparts. Our ratings are better than ever. In many markets we’ve got two stations in the Top 5 in the ratings, where we used to have only one. As the Hispanic population grows, and as we have the platform and the footprint in each of our markets, it’s hard for an advertiser not to address the Hispanic audience, and that’s evident in our growth rates for radio. We’re doing quite well, and we think it will continue.
RI: Sharp growth in most any business eventually levels off. Do you have a forecast for when Hispanic radio’s growth might slow?
GS: I don’t expect it to subside anytime soon. Hispanics are still having a good number of children; 18-34 is our strongest demo, and even younger. I don’t really know a reason why it would slow down. We’re just trying to make sure we have all the products the client wants to consume for entertainment.
RI: Do you attribute the growth more to new revenue or population growth?
GS: With the 2000 Census, Hispanics really hit critical mass. They have surpassed the Black population, and continue to grow. Although Hispanic happenings in this country are more in the news now, it is a population that has been somewhat ignored by advertisers. It is certainly evident, though, that for us to grow our revenues in the low teens – when the rest of the radio industry is growing at flat to 1 percent –advertisers are waking up and putting dollars where the ratings indicate they ought to be, and we’re benefiting from that. Advertisers realize that we’re not getting the same [revenue] share as share of listening audience, and will put more dollars toward that. We see great results with these advertisers. But we still have something of a gap to close.
We have syndicated some of our big morning shows, and we have some unique talent that has generated ratings. The cross promotion between TV and radio that I mentioned has also moved our ratings up. We also made some format changes a year or so ago, and we’ve had a tremendous lift in the ratings as a result. We’re in a good spot right now.
RI: Speaking for formats, what programming trends are generating the most response from your listeners?
GS: We have a bilingual format called La Kalle in four or five markets, and it’s doing quite well. We even have some Hip Hop stations, so we’re looking at that audience as well. That’s still not the major part of the growth. I think what you’ll see, particularly as the new Census comes out in 2010, is even greater growth in middle and small markets with the Hispanic population moving out across the United States. That’s one reason why we’re interested in syndication of some of our unique programming, because we see an opportunity there. It may take some time before we start buying into those markets to own new radio stations, so we’ll concentrate on the markets we’re currently in for the foreseeable future. But it is evolving as the population continues to grow.
Our footprint is so large in the markets we’re already in that there is a limited number of formats we can do. We can tweak those one way or the other, but who wants to be the fourth- or fifth-ranked radio station in a market where we already have the top two or three? As the population grows in the markets where we already operate, there will be room for yet another format, but that will take a number of years. Hopefully, we’ll be positioned to purchase another station or make other adjustments that will allow us to maintain the kind of footprint we have now.
RI: It sounds like syndication is a key area of growth for the company.
GS: It is. It hadn’t been our focus in the past because we were busy buying more radio stations. Now, as we’re doing a little less of that, and seeing the opportunity in the Hispanic growth in those markets, we think it would be nice for broadcasters to carry some of our proven programming. We just named a person to head that up for us, and we already have 20 or 30 stations syndicating our morning shows. We think we can double or triple that before too long.
RI: Are there specific regions where you see opportunity for growth?
GS: I’m always surprised by the percentage increases in some markets where you never thought there were Hispanics, and all of a sudden they are 20 or 30 percent of the population. You would think that the population growth would be in the southwest area of the United States, but I’m surprised by what I see in North Carolina, for example. It usually has to do with where the work is, and it is hard to know exactly where the workers are migrating. I think there is going to be a surprising population base of Hispanics in New Orleans rebuilding after Katrina.
RI: Do podcasting and streaming fit into the mix?
GS: We’re doing both of those, but we haven’t spent an inordinate amount of time on them. We’re looking at text messaging as well, and of course we’re building out the HD stations. There’s a lot going on. As there’s client demand and as we get more comfortable with how to supply these things to the advertiser, they become more menu items that our salespeople can offer as we try to reach the consumer on that 360-degree basis.
RI: What are Univision Radio’s plans for HD?
GS: We already have about 20 stations broadcasting in HD, and we’re doing a Tejano syndicated HD2 network in Texas. As we develop other formats, HD2 is a good place to put them. We simulcast some of our AM stations on the HD2 FM channels, and based on signal coverage, we might also simulcast different primary FM stations. We’re not trying to sell advertising on those side channels yet, but as the receivers get out in the marketplace and we start seeing ratings, we’ll certainly want to monetize that. It gives us a great opportunity to try some different formats. But, it’s really limited for Spanish; we don’t really know how we’re going to fill up all of that programming, when you consider that you get about two extra channels for every FM. But, our programmers are excited about it.
RI: Is the Tejano syndicated network exclusively on HD2?
GS: It is. Our Tejano in San Antonio – KHTN – does quite well. Since we had all that music, we thought we’d put it on a format and operate it. Tejano is such a niche in Texas — more so there than anywhere else —and as we promote that availability, we’ll see if will help sell some more HD receivers for people who want to listen in markets outside of San Antonio.
RI: You also mentioned that you’re simulcasting AM on the FM in some areas…
GS: There’s a little bit of that, yes. It’s interesting to hear what the AM sounds like when you listen to it on HD on the FM. One of the easiest things to do to get an FM presence for an AM stations is to put it on HD2. Over time, maybe the audience will prefer to hear our AM programming on HD2 — or maybe not, because the digital for AM will sound really good too. We’ll just have to see how that evolves.
RI: Are you bringing in stations from other markets, or simply local AMs on the local HD2 stations?
GS: We’re just simulcasting the stations that we have in our market. Other than the Tejano format, we haven’t yet tried to come up with a specialty format to syndicate across all the markets.
RI: Let’s shift to ratings. How satisfied are you with the language weighting process Arbitron has developed to capture Hispanic listeners’ consumption of radio?
GS: I think it’s done pretty well. I don’t think it’s perfect, but it is a step in the right direction. We’ve always felt that the more predominant Spanish-speaking person has been under-represented, so the weighting process is an effort to balance that better. I don’t know if there is a next step; we’re looking to see how the PPM will effect the ratings for Hispanic radio.
RI: What are your thoughts on how electronic measurement may affect Hispanic listening? Are you concerned it might dent the loyal listening Hispanic stations have historically enjoyed?
GS: It’s hard to compare diary to electronic measurement because the whole methodology is different. We’ve had about a year to learn how to program to PPM in Houston. I don’t think the news for Spanish is any different than when you convert an English station from diary to electronic measurement. If there are problems getting certain cells of Hispanics because of the electronic measurement, I think Arbitron will figure that out. I don’t know if you can say what we’re getting today is 100 percent right, but they’re certainly working on it. I have a lot of respect for Arbitron, and they will do what’s right to be able to reflect the audiences as best we can with PPM. If radio overall does well, we will all rise with the tide.
RI: What are you hearing from advertisers about the change in methodology?
GS: Some want more commercials in order to increase their gross ratings points, others think they don’t need to do anything, and a smaller majority want us to bring our rates down as a result. But that is true for all of radio, so I don’t feel like Spanish is necessarily being singled out.
RI: What are the key areas where the radio industry as a whole should focus to jumpstart growth?
GS: Electronic measurement is a step in the right direction; it might make radio a little snazzier for people who want to buy it as media. But I think salespeople need other alternatives for selling their product. We’ve got to look at it more in terms of marketing, look at the needs of the advertiser, and be able to offer more than just commercials, a remote, and a promotion as the solution for every client’s needs. One thing nice about being in Univision is that we have all of these platforms, and we can offer a lot of different things. Radio has to reinvent itself a little bit with some of these new media, not just make more sales calls asking people to buy more radio advertising.
RI: How is Univision capitalizing on its various platforms?
GS: We do a program together with the television division that looks for a new singing star, kind of like American Idol, and there is opportunity for people to text message who they want to vote for. We’re just getting started, and we’ve got Joe Uva and the new owners helping us. Also, since we do so many concerts; there is a lot of opportunity. It’s pretty exciting stuff.
RI: What is the atmosphere with the new owners?
GS: They’re very logical, and they understand that you need to spend money to make money. Our consultants are looking at synergies for operating the company; the idea is, how do you grab the advertiser and say “Look, you need to be buying Spanish media”; something compelling enough for them to say “You know, you’re right, we haven’t been putting enough dollars toward that.” As I and the other people who run the various divisions work with our CEO, we’re trying to make the kind of noise with advertisers that the Hispanic community really deserves. Hispanics look at commercials for how to improve their lifestyle; they don’t see as much of the negative because our audience is interested in how to do better. "Who wants me to come buy my shirts and pants and furniture and cars from them?" They want to know those things. As we can help advertisers realize that opportunity, it has helped drive our growth rate.
RI: Why are Hispanic consumers so much more receptive to these advertising messages?
GS: They have a strong work ethic, they have larger families, and they’re trying to have a better lifestyle. They don’t feel it is owed to them, they have to earn it. They rely on media — be it radio or television — to give them the comfort level that the advertisers want their business, and if they go to that advertiser’s business, they’ll get a fair deal. And this company carries some added responsibility; the name Univision means so much to the consumers. We get all kinds of questions from our audience, like "Where do I go to get this?" or "How do I do these things?" Just like radio a number of years ago, when you felt like the disc jockey was your friend and somebody you might know, somebody you felt comfortable calling up and saying “Hey, should I go buy this product?” That’s why we do so many endorsements for our talent; they have that umbilical cord with the listener – they are connected – and it is a win-win situation for the consumer, the advertiser, and the company. I don’t say that’s a unique situation, but for the Hispanic community — with their family attitude and desire to improve their lifestyles — they have a greater dependency on Spanish media to know how to assimilate into the country, to be able to get products and services that will help their lifestyle.
That invitation to buy, that knowledge that you really want a person who speaks Spanish to come into your business, that they’ll get good service and attention from the person selling the product, makes the customers want to go see those people. It’s been a great success for our promotions and everything else that we do. And getting advertisers that aren’t buying Spanish media to realize that is an opportunity.
RI: What are you doing to maintain that listener loyalty?
GS: It comes down to how unique your programming is and what kind of marketing we do to the listener — everything from the TV commercials we run to the promotions we do on the radio to how we play one song after the other. We have a pretty large in-house research company, and we spend a lot of time testing the audience on what their preferences are. I think we have a real good lead on our competitors in the markets where we operate. We have the heritage of having been there first. If our salespeople are oriented to create solutions for advertisers, and we help them put the right kind of products and services on the radio, then we’re doing what’s best for the clients and for the audience. We have that connection with the audience and the client; we have loyalty from clients and loyalty from the audience and everybody wins. We try to approach it that way so we build those bonds with the consumer and the advertiser.
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