1. SPEECH OF ADRIANA CISNEROS DE GRIFFIN PALEY CENTER FOR MEDIA “LATIN AMERICA: CREATING CONTENT FOR A GROWING MARKET IN THE SPANISH-SPEAKING WORLD” LOS ANGELES, UNITED STATES September, 2011Good afternoon,It’s a pleasure to be here, many thanks to the Paley Center For Media for thisinvitation, I am very excited.Today I want to share with five major themes:• “Beyond Disruption.”• “A growing market…”• “Evolution in the creation and distribution of content”• “A Latin America in step with the 21st Century”• “The Road Ahead….”The first idea, “Beyond Disruption”, is the theme that brings us together and isalso one of the principal focus points of the Cisneros Group today.In the communications media we are confronting a historic process of transition.New technologies are revolutionizing everything from the way in which we watchtelevision to the way that we relate to one another. Today I will address thesemany changes that the industry is facing in the new millennium, highlighting threethat are especially important to my organization, and to many of you all heretoday: the evolution in the creation and distribution of content, Latin America’sefforts to keep in step with –if not ahead of– the ever-morphing technologies, andwhat that means for the future.The industry is leaving behind old models and quickly evolving and innovating tooffer the most cutting edge information and entertainment to its public.Metaphorically speaking, we’re standing on a stage full of opportunities and
2. challenges, where, today, more than ever the industry must and can be close to itsaudience. Our positioning on that stage can always be improved upon, and wemust seize every opportunity to have a direct dialogue with the viewer, listening tothem and understanding their needs and subsequently adapting our productions.In our particular case, the creation of content for the Hispanic public offers a dualchallenge: to develop formats in line with new technologies while keeping in mindthe needs of one of largest growth segments, a segment that gains strength andinfluence every day. This market’s demands and expectations are transformingparallel to the development of new media and technologies. It is our role to createcontent that merges and enhances both stems of growth.Today, Hispanics are not only looking for content that offers them a greaterpossibility of interaction that can be adapted to a variety of screens; but alsocontent that they can find in their own language, that is of better quality and thatis designed especially for them.As the Hispanic population grows in the United States – especially second and thirdgeneration members – this is especially evident. This population has similaritieswith both the Anglo-Saxon market and the Latino market. But herein lies thechallenge: creating content for a population that is marked by its own duality.Let`s talk about: “A growing market…”In 2009, Nielsen conducted a study among the Hispanic population in the USexploring the content preferences of the bilingual Latino community. This studyfound a market that is capable of “surfing” from an English language police seriesto a soap opera in Spanish without any problem; that said, they prefer content intheir native language, with the subjects that offer an emotional and culturalconnection. “The experience of watching television in Spanish permits the viewerto connect with their culture, history and identity in a way that is not available inother places”.
3. The study also highlighted the importance of creating commercials of better qualityand designed especially for the Latino market instead of simply translating thecontent. This has permitted brands to find a much more receptive environment.Advertising dollars matter across the board, but perhaps even more in this market:According to Nielsen, the return on investment for scheduled advertising in mediawith programming in Spanish such as Univision and Telemundo, is 30 percenthigher in comparison with that transmitted in English media.This, coupled with the rapid growth and digitalization of the Hispanic population,makes this market one that offers great opportunities for Latin-American contentand the new platforms.Currently, more than 500 million people speak Spanish around the globe, makingour language the one with the second largest number of native speakers and thethird most used on the Internet.In this country alone, there are already 50.5 million Hispanics, a 43 percentincrease since the year 2000, making the United States the nation with the secondlargest population of Spanish speakers, just behind Mexico.The Latin-American industry is facing the enormous challenge of creating moreand better content for a market that is growing exponentially and consuming moretelevision every day.Now, this growth in the expansion of the language goes much farther than thosewhose mother tongue is Spanish, our language is also one of the most studied inthe world.Without a doubt, television content has had a great deal to do with this dispersion,stimulating the learning of Spanish throughout the world. According to theCervantes Institute catalog on the dissemination of Spanish, formats such as soapoperas have played a fundamental part in stimulating a huge interest in learning
4. our language[i] in countries as far away as Israel, Indonesia, Albania, Kenya orMalaysia.The trend is clear: the Hispanic public demands content in its language and thedemand for our formats in the rest of the world grows every day.In the United States alone, the importance of the Hispanic sector has carriedUnivision to its place as the fifth most watched channel, competing head to headwith channels in English.The industry recognizes the potential of the Hispanic market. Since 2001, eightnew Spanish content channels have emerged, and the big chains have turned theirattention towards this market, launching projects like Fox Hispanic Media and thegrowth of offerings by CNN in Spanish.That Hispanics are transforming the television market of the United States isundeniable.This change is not only reflected in content, but also in advertising. The Hispanicsegment possesses an ever greater influence as consumers, not only due to its sizebut because of its economic potential, which exceeds $950 million.According to the Association of Hispanic Advertising Agencies, companiescategorized as “Best-In-Class” increased their investment in the Hispanic market by25 percent in 2009, dedicating an average of 21.4 percent of their budget toSpanish media.Hispanic consumers have made themselves a market of great interest, not only fortheir domestic growth potential, but also for their growing international influence.And now into my third point: “Evolution in the creation and distribution of content”Nicholas Negroponte, Founder and Director of MIT Media Lab, said “The future isalready here and there are only two possibilities: be digital or not”. Very accurate,don’t you think?
5. 2010 was the year that marked the consolidation of social networks in LatinAmerica; the penetration of Twitter in countries such as Brazil and Venezuelareached 21 percent of the online population, compared to an 8 percent penetrationrate in the United States. Not to mention Facebook, whose penetration in LatinAmerica is 50 percent greater than in the United States. [ii]While the current penetration of computer ownership in the majority of countriesin the region is still less than 35 percent, that of mobile devices is practically 100percent. This is an especially relevant data point as we look to the future and thepossibility that cell phones become the primary mode of access to the Internet,propelled by the use of phones with the Android system and better payment plansfocused on increasing data consumption. In Mexico alone, 14 percent of cellphones are Smartphones and 30 percent of mobile devices are Internet enabled.Something similar is happening with video consumption online, which has becomeone of the fastest growing digital behaviors in Latin America, where thepenetration is in line with that of the United States; although the time dedicated isstill low, it’s expected that it will increase significantly with the increasingavailability of broadband connections, with improvement in speed and growing useof tablets.Currently in countries such as Brazil, Chile, Colombia and Mexico there is anaverage consumption of 8 to 11 hours with an average clip time of 5 to 6 minutes.Just in Brazil, broadband penetration is greater than that of pay television; which iswhy online video could become the key platform for accessing video programming.This dispels any doubts that the commitment that Netflix has made to launch U.S.and local programming online in Latin America will be lucrative. And Netflix is notthe only one out there -- other local players are seeking to offer similar services,such as Bazuca of VTR and Arnet in Argentina. In addition, recently we signed anagreement with Netflix for the distribution of our content.
6. In the case of Hispanics in the United States, the panorama is not very different,65 percent of them have access to the Internet[iii] and, in fact, 17 percent of theHispanics online tend to download videos compared to 14 percent of total Internetusers; similarly, 9 percent of Hispanics are likely to download movies, this is 3percent more than the general population; while 8 percent of Hispanics withaccess to the Internet are used to watching TV programs on line, 1 percent morethan the total of Internet users.James Dean used to say “I can’t change the direction of the wind, but I can adjustmy sails to always reach my destination”. I think that this quote exemplifies verywell what has been the philosophy of the Cisneros Group for over 80 years: Apermanent evolution, that has allowed us to adapt perfectly to new scenarios andthat today is moving us solidly down the road to expansion into new markets andnew screens.“Beyond Disruption”…the audience has changed and it is up to us, in the industryto respond effectively to these changes and capitalize on the opportunities thatnew technologies have opened for us.Perhaps the greatest challenge is that of outlining the correct strategies that willallow us to use every resource, every platform efficiently, all the while suited toour target population.New technologies are both an opportunity and a challenge. Tools like socialnetworks could become the best complement to our content, allowing us toprovide ever better experiences to our audiences, to create anticipation/buzz, andto get almost immediate feedback.At the same time, ON Demand content and systems such as DVR allow anexponential multiplication of our content views, but this also means an enormouschallenge, above all in advertising.
7. The Internet is still a maturing media with barely 50 percent penetration;notwithstanding, it’s estimated that it could reach 70 percent by 2015. Thepotential is enormous, but the race has begun and we cannot afford to be leftbehind.It’s certain that content will continue to be king; but digital media is already a keypart of every strategy.The four idea: “A Latin America in step with the 21st Century”I’d like to share with you the great success of the soap opera “Eva Luna”, whosestory was driven through an innovative interactive strategy, set in motion throughthe association between Univision Interactive Media and Venevision Productions,which paid off in the inclusion of more than two million new viewers in the UnitedStates.This is just one example of how Latin America is in step with the 21st century,working hard to consolidate itself as an important content provider for everyscreen.My father, Gustavo Cisneros, is convinced that this will be the Latin Americandecade and in the case of the creative industry there are numerous examples thatgive credence to it. I could mention social gaming, which has extended quicklythrough the region, especially in Brazil, where it has become a fruitful business.Companies such as Mentez, who developed an innovative online micropaymentplatform; Vostu, who increased their capital on the order of $300 million; Zynga,who had already hired a manager for Latin America and is the now number onecompany for games on Facebook in the region, monetizing itself through micropayments and advertising, are clear examples of the growth in this industry.Soap operas, as I mentioned at the beginning, are another excellent example ofcontent for exportation. The Colombian series “Ugly Betty” made the 2010Guinness World Records Book of the Decade as the most successful soap opera in
8. the history of television, transmitted in more than 100 countries, dubbed into 15languages and adapted for 22 nations.And finally: “The Road Ahead….”The road is marked out and Latin America has a great opportunity for thedevelopment and commercialization of Spanish content; globalizations of themarket and new technologies have presented enormous challenges, but they arealso the principal catalyzing agents for industry opportunities.The commercialization of content is a substantial source of socioeconomic growth,job creation, innovation and commerce for Latin countries. According to the UnitedNations Conference on Trade and Development, the exportation of creative goodsfrom the South to the rest of the world reached $176 million in 2008, whichrepresents 43 percent of the total of all creative industries; just a sample of thegreat potential of this industry for developing countries.The Latin-American industry finds itself at the ideal moment and it has everythingto gain, with the rising growth of our language, quality content, digital platformsand a market of great potential.“Now You’re Speaking My Language”Many thanks.