TV Network Invests in Spanish-Language E-Tailer

Telemundo Network Group LLC, one of the most recognized Spanish-language TV networks in the United States, has announced a multi-million dollar (US$) strategic investment in Spanish-only e-tailer Espanol.com in an effort to target Hispanic consumers in North and Latin America.

As part of the deal, Espanol.com will receive “substantial” advertising on the Telemundo network, which reaches 85 percent of Hispanic households in 63 U.S. markets. Over the past several months, Telemundo claims to have had a “dramatic market share increase” in Hispanic households, as well as among 18 to 49 year-olds.

Espanol.com will also have opportunities to co-produce programming on Telemundo to promote its Web site. Similar plans by NBC Interactive and TV shopping channel ValueVision were unveiled recently with consumer electronics shopping site Roxy.com.

Prime Target Market

The Hispanic community consists of an estimated 31 million people in the United States, or about 11 percent of the total population. By 2010, Hispanics are expected to become the largest minority group in the nation.

According to the Selig Center for Economic Growth, the buying power of this demographic has increased 84 percent in the 1990s, as compared to a 55 percent increase for non-Hispanic consumers.

“The strategic alliance with Espanol.com to our growing portfolio of Internet investments enables us to deliver the most desirable products and services to our audience in an authentic Latino environment,” Telemundo Network Chief Operating Officer Alan Sokol said.

“The fact that a major media company is ready to enter into a strategic partnership with us only validates our business premise — Espanol.com is here to fill a void left by mainstream e-commerce sites unprepared to meet the cultural and language expectations of Latinos today,” Espanol.com CEO Kyle McNamara said.

Powerful Parent Companies

Telemundo, which is owned equally by Sony Pictures Entertainment and Liberty Media, is the second media company to take stake in Espanol.com. Grupo Ferr Rangel, the publishers of Puerto Rico’s largest daily newspaper, already owns a percentage.

Espanol.com has also raised money through a variety of venture capitalists, including Advent International, Masthead Venture Partners, LLC, and Cornerstone Equities, LLC. The Web company put the proceeds of it first round of financing, $12 million, into a $10 million international advertising campaign in the United States, Puerto Rico and Mexico.