Conference: Latino Market a Big Growth Area11 Mar, 2004 By: Jessica Wolf
The Latino consumer base, especially for home entertainment goods is a deep, diverse, rapidly expanding market with a large youth population, agreed presenters and attendees at Video Store Magazine's DVD En Español conference held last week in Hollywood.
But video suppliers and retailers are still just scratching the surface of the market, they said.
The Latino segment is the fastest-growing demographic in the country. According to U.S. Census estimates, there are 39 million Latinos in America with $652 billion of disposable income in their pocket and more than 60 percent of the population is under the age of 35.
There's plenty of room to penetrate this market for video, noted a variety of speakers during the conference panel discussions, if suppliers and retailers take into account the diversity of cultures that often get lumped under one “Latino” umbrella and realize that there are two different segments to the market; recent immigrants who speak primarily Spanish and second-, third- and fourth-generation bilingual Latinos who retain strong ties to their culture and language.
During one of the day's panels, Chris Lynch, SVP at Ventura Distribution's Studio Latino, summed it up: “This culture is acculturating as opposed to assimilating and there is a phenomenal opportunity for Latin-themed product as well as films that reinforce [the demographic's cultural values.”
Video Store Magazine's director of market research Judith McCourt released data from a market research study that found Latino DVD households rent DVD more often than the U.S. DVD household population as a whole, and buy DVD at about the same level as the general market.
But the Latino consumer also has a tendency to overindex on purchases, studio execs like Peter Staddon, SVP from 20th Century Fox Home Entertainment, and Ken Graffeo, EVP at Universal Studios Home Video, pointed out during the course of the conference.
“When product appeals to the Latino market, these titles will overperform at retail,” Graffeo said.
Graffeo also noted that the Latino consumer has a higher incidence of buying multiple DVDs at one time.
“The biggest single problem we have had in bringing them to market is not identifying the market but getting [the product] into the retailers,” Staddon said.
The fact that different retailers have varied buying infrastructures, limited shelf space and few structured plans to merchandise and stock Latino product can stall the segment at the front lines.
Suppliers speaking on the panels did say that retailers like Blockbuster, Movie Gallery, Best Buy and Tower are making inroads into the Latino market.
Bo Lloyd, SVP of video purchasing for Movie Gallery said his chain has identified 300 locations that have a Latino customer base of 20 percent or more and the chain uses special new release sections, bilingual in-store signage, and is looking at developing more targeted trailer reels to be played in Latino-heavy markets.
“I think it's really about making the customer feel comfortable.” Lloyd said.That's a big factor in capturing the attention of a Latino consumer, especially a recent immigrant, said Concepcion Lara, president of marketing firm Target Latinos.
These shoppers are looking for service that is “amable” — “super-nice,” she said.
Another way to tap into the market, especially with it's strong youth factor, is exploiting any musical angle the product may offer, such as Universal's recent event in Puerto Rico. The studio promoted its DVD release of Scarface and 2 Fast 2 Furious with a promotional bash alongside an urban radio conference featuring 350 hip-hop DJs from around the world, noted Universal publicist Vivian Mayer.
Rita Boyadjian, co-president of Alternative Marketing Solutions said she advises her studio clients to tap into the music factor when promoting product to Latinos, whether it is genre-specific titles, or the huge overall blockbusters.
“One of the best ways to reach the Latin consumer is Spanish-language ads on the radio,” she said. “This group spends 21 hours per week listening to radio compared to the national average of 15 hours.”Once you touch the heart of the Latin consumer you will have their loyalty and their children's too, said Latino film and television star Edward James Olmos during his keynote address and acceptance of a Lifetime Achievement Award at the event.
Olmos also advised the group of video suppliers, marketers, distributors and retailers in attendance to look at the Latino market as the future of this country.
“When all is said and done, you're going to have to learn more, whether you are a studio producing content, a distributor or a magazine writing about it, you're going to have to learn more about all the cultures but especially about Latinos. And why? “ Olmos said. “Because 50 percent of the children [being born] in this country right now are Latino. That's when you start to really realize that this is not a niche, this is the future.”
“To me what you are doing here today is celebrating the cultural dynamic of the market and I love you for that, “ he said. “You're gearing yourselves up to accept the changes that are coming.”