The new ABC-Univision English-language cable network targeted to Hispanics is busy building its suburban Miami headquarters (pictured), staffing up and developing marketing and advertising strategies. The next big step will be the hiring of a CEO, which is in the works. Fusion will be a completely separate entity with its own employees, talent and executives. However, during the startup, Univision will lead the charge in terms of programming, while Disney/ABC will focus on ad sales and distribution.
Still expecting to launch its new English-language news and lifestyle network for Hispanics late this summer, Fusion, the joint venture of ABC and Univision, seems to be moving ahead on all fronts.
Fusion has assembled a board, hired “dozens of employees,” made initial advertising and distribution deals and begun the build out of its headquarters in a Miami suburb.
“Getting a new venture off the ground has a number of different moving parts — from a strategic, marketing, content programming development and operational perspective,” says César Conde, president of Univision News. “It’s all of those pieces moving in parallel with the great team we put together for Fusion and also being supported by Univision and ABC.”
The next big step will be the hiring of a CEO. Conde says the board is interviewing candidates, but he would not name names or hint at when the hire would be made.
Conde is one of three Univision executives on the six-person board. The others are Isaac Lee, president of Univision News, and Andrew Hobson, senior EVP and CFO of Univision Communications.
ABC is represented by Ben Sherwood, president of ABC News; Anne Sweeney, co-chairman, Disney Media Networks and president, Disney/ABC Television Group; and Kevin Mayer, EVP, corporate strategy and business development for Disney.
According to Conde, Fusion will be a “completely separate entity” with its own employees, talent and executives. However, during the startup, Univision will lead the charge in terms of programming, while Disney/ABC will focus on ad sales and distribution.
Fusion has signed agreements with five major distributors — Cablevision, Cox, Charter, AT&T U-verse and the new Google fiber network in Kansas City — giving the network an initial reach of 25 million homes. Other deals, currently in the works, will be announced soon.
In addition to ad revenue, Fusion’s business model calls for programming fees. Neither ABC nor Univision would disclose them. But Derek Baine, a senior analyst at SNL Kagan, estimates fees for the cable network will be in the range of 10 to 15 cents per subscriber per month.
“This is the most difficult time to launch a cable network,” Baine says. “We’re going through a period where there’s going to be a shakeup, where cable and satellite operators are trying to get rid of underperforming networks to make room for new ones.”
Baine believes it’s most likely Fusion will be targeted on digital basic or a step up from digital basic, keeping sub fees low. “It boils down to how well their sales team is, what kind of market research has been done, and getting evidence that there’s going to be demand for the network.”
Details of the Fusion programming remain sketchy. Univision and ABC stick to the talking points: it’ll be news, information and lifestyle programming with an overall focus on Hispanic millennials.
“Fusion has the chance to make a mark in the market,” says media analyst and adviser Julio Rumbaut. “But it all depends on the execution. It has to be a hit out of the box, something that really resonates in the hearts and minds of bilingual Hispanics.
“Keep in mind that bilingual, bicultural and acculturated Latinos have multiple options in general market networks. The challenge will be how to do content in a manner where bilingual Hispanics will want to watch or use Fusion because it strikes a nerve.”
Rumbaut points out that success may depend on broadening the network’s appeal — something Conde is keenly aware of.
“We felt it was important to have an English language offering to serve part of our community that prefers to consume culturally relevant content in English. But we’re also making sure we have interesting, culturally relevant content for those non-Hispanics, non-Spanish speakers that are interested in Latino culture, politics, cuisine and the like.
Advertisers are keeping close watch on the venture. “This is a huge validation to the Latino market,” says Steven Wolfe Pereira, EVP and managing director of MediaVest’s multicultural marketing unit, MV42°.
“We’re seeing a lot more competition. MundoFox launched last year, Comcast is really supporting Telemundo, especially with the success in getting the rights to the World Cup. I can’t emphasize enough how important this market is for advertisers. Over next five years, 100% of retail industry growth will be coming from multicultural, mostly from the Hispanic market.”
Wolfe Pereira says the only way advertisers can grow in the U.S. is with the Hispanic audience, which currently accounts for over $1 trillion in consumer spending. According to Nielsen’s “The State of the Hispanic Consumer: The Hispanic Market Imperative,” that Latino buying power will grow to $1.5 trillion by 2015.
Even so, MV42° is not quite ready to bet on Fusion.
“We’re waiting to see what they have and then be able to assess it,” Wolfe Pereira says. “What’s going to be the programming? The product? How will they sell it and manage it? Everyone is watching them in the industry.”
ABC and Univision won’t say if Fusion will have a day in the May upfronts, but ABC’s ad sales team is already having introductory conversations with clients about the new network.
Fusion will be headquartered in Doral, just west of Miami International Airport and “a five-minute” drive from Univision headquarters.
Once construction is completed, Conde says it will house not only Fusion, but all of Univision’s news operations, creating “a massive news hub for the company and for the region.”
ABC and Univision spokespersons declined to say exactly where the building is, but records obtained from the city of Doral say it is a warehouse at 8551 NW 30th Terrace with 150,000 square feet of space for offices, newsrooms and studios.
Neither company would provide specifics about the hiring other than to say that dozens have been hired. The exact number is “confidential,” they say.
However, in applying for a $3.5 million job-creation grant last year from Miami-Dade County, the venture promised to create 346 new jobs over the next five years — 201 in 2013 — in addition to retaining 137 jobs in the county. The new jobs would have an average salary of $81,000.
So far, there isn’t much evidence of such hiring.
A LinkedIn site currently shows only 10 job listings for Fusion, including a digital reporter, coordinating producer, assignment manager and director of communications and public affairs, but an ABC spokesperson says they’re “working 24/7 to bring people on board.”
By contrast, just weeks after Al Jazeera bought Current TV for $500 million in January, it posted ads for more than 100 jobs for its new U.S. channel, Al Jazeera America.
In December of 2012, Luis Arturo Torres was brought in as VP human resources to lead the Fusion hiring.
Keith Summa, former head of the CBS News Investigative Unit, was the first hire last summer as VP of news partnerships. He was followed by Miguel Ferrer, a former AOL Latino executive and HuffPo Latino managing editor. His title: executive producer, digital.
More recent hires include Tom Finn as CFO, David Shenfield as director of talent, and Rayner Ramirez and Dax Tejera as producers working on program development.
As for on-air talent, the big news so far has been that ABC News senior national correspondent Jim Avila will become Fusion’s White House correspondent, while continuing his duties for 20/20. Univision News’ chief medical correspondent Juan José Rivera will also report for the new network.
A source says plans are in the works to develop a talk and interview program with Leon Krauze, currently the main anchor at Univision’s KMEX Los Angeles.
ABC and Univision quietly launched a beta website in September 2012, which now resides within ABCNews.com. According to Univision, even though there has been no promotion of the site, Ferrer and his digital team are attracting an average of 700,000 unique visitors a month.
“We’re launching a digital component that’s going to play a very important part of this network because of the target of this network, which is the Hispanic millennial… a very young demographic,” says Conde.
The average age of Hispanics is 27. The most recent Census figures show 60% of the 52 million Hispanics living in the U.S. are born here and 59% speak English very well or that’s the only language they speak at home. If you add the fact that almost 70% of Hispanics use the Internet and are early adopters of mobile technology, with 44% owning smartphones, targeting English-language Latinos seems like a winning combination.
Fusion is not the first network to go after the Hispanic audience in English. nuvoTV, originally founded as SíTV by producer Jeff Valdez, came up with the concept more than eight years ago. The entertainment cable network has been operating since 2004.
“For Univision in particular, I think it’s a tectonic shift that bodes very well for consumers, the marketplace and us,” says Michael Schwimmer, CEO of nuvoTV.
“For 20 years they have said that if you want to reach Hispanics, you need to do it in Spanish. And then suddenly for them to pretend that propaganda no longer holds true and that the largest Hispanic media company in America is going to pursue this audience is wonderful. Competition is good. The ABC-Univision joint venture will be helpful for us.”
As an independent cable network, nuvoTV has struggled to stay afloat. It recently signed a content and marketing deal with Jennifer Lopez, which it hopes will pump some life and bring more visibility to the eight year-old network.
While Fusion will, as Schwimmer puts it, be navigating in “unchartered waters,” Conde believes that it will have a distinct advantage.
“It’s going to be able to tap into the resources of both ABC and Univision news,” he says. “They’ll have the best of both worlds.”