by Michael McCord
New Hampshire Business Review, January 4, 1999
Reprinted with permission of the New Hampshire Business Review
At the intersection where the global marketplace village meets high technology, where borders are overcome easily, the distance between what is produced and the markets they serve grows ever widen And in some instances they can't help but raise eyebrows.
Consider SRMusic Network in Hampton, which provides music and news to more than 30 Spanish language radio stations in 29 states across the country -- and with plans to connect with more than 400 stations, from Argentina to Spain.
While New Hampshire is undergoing a slight demographic change from its status as an Anglo enclave, one doesn't think of Hampton as a prime location for an emerging Spanish-speaking radio empire.
"Interesting, eh?" quips Jim Metcalfe, vice president and general manager of SRMusic, who's been in the radio business, often in the Seacoast area, since 1969. Well, yes, it is interesting and he explained why during a recent interview and tour of the network's modern and highly computerized facility.
The company's Lafayette Road offices and studios are hardly spacious for SRMusic's 15 employees, who include engineers, disc jockeys, affiliate and sales personnel and support staff. Metcalfe said SRMusic is going through a huge growth spurt and has already met investor and distribution expectations for 1999. Not bad for a business that went on the air May I and took an immediate hit when its satellite went haywire and forced the network off the air for more than a week.
"This is a very exciting time. While I had faith m our formula, even I've been taken a little by surprise by how well we're doing" Metcalfe says.
A burgeoning market
Metcalfe began putting the pieces of the formula together when he was working at a Lawrence, Mass., Spanish music station in the early '90s. The mature formula, he explains, is combining a unique SRMusic sound and the business decision of giving the network away free to stations who want to use part or all of their music and news programming. SRMusic also gives stations the equipment necessary to grab the network's digital stereo signal from the Galaxy VI satellite orbiting high above the earth. If this sounds like a page from the Netscape or Microsoft business plan of giving away its product to acquire market share, it is.
"Yes, we're after market share. As much as we can get, especially in secondary markets that aren't being served right now. There's no sense quibbling over pennies for licensing now when the real money to be made is in national advertising," Metcalfe said. "And to attract national advertisers, we need to establish a significant affiliate base." (Depending on market size, the giveaway policy will vary in the future when an affiliate number of 60 to 70 is reached.)
Though Metcalfe admits it's sometimes difficult to educate potential advertisers (and advertising agency media buyers) about the attributes of this largely untapped market, a few major national advertisers --General Mills, Butterball and America Online -- are now on board.
Metcalfe believes the Hispanic market is wide open. It is both growing in numbers in the United States (an estimated 31.1 million, 11 percent of the U.S. population) and buying power ($421.1 billion in 1999, according to radio industry figures). There are now 550 Spanish radio stations in the country, a number that has almost doubled since 1989, and ranks fifth in the country among music formats.
To attract affiliates, Metcalfe and Network Operations Manager David Martinez have put in place a 24-hour-a-day eclectic mix of adult contemporary music with a Spanish language twist. "Rather than focus on Mexican music which is the most popular in the country, we also mix in Cuban, Latin, Dominican, Caribbean and Spanish to create a unique programming rhythm," says Martinez. This includes salsa, cumbia, Tex-Mex, Merengue and Rock. There also are Spanish cover songs of popular artists such as Celene Dion, Bonnie Raitt, and even the Irish band U2. "I think Celene Dion sounds better, even more romantic, in Spanish," Metcalfe says.
This blend of musical communities is further augmented by syndicated specialty programs, including the Top 20 countdown and "El Paraiso de los Ninos" (Children's Paradise), a children's show that combines fun and education with music, stories and special guests.
A good location
News Director Rony Flores, a native of Guatemala, creates five-minute hourly newscasts for a national audience. "I use ABC, CNN, the typical news sources" he says. But to take it a professional step further, he does taped telephone interviews with contacts in Bogota, Colombia or Madrid, Spain. During a recent broadcast, Flores talked about the impeachment hear:rags in Washington, D.C., human rights allegations in Peru and the extradition struggle between Chile, Great Britain and Spain on how to resolve the fate of former Chilean dictator Augusto Pinochet.
Metcalfe believes he's negotiating with larger national radio networks who are "starving for a national news show for the Spanish stations." He's also looking forward to the New Hampshire presidential primary in 2000, especially if a certain Spanish-speaking governor from Texas by the name of George W. Bush decides to run. "Those politicians planning to court the national Hispanic vote are learning where we are located."
But listeners have no idea where SRMusic is located. "Listeners call from all over the country, but they don't know where we are. This makes it a challenge for deejays who need to unlearn a few old tricks, such as talking about local weather or other local happenings," Metcalfe says.
Which brings us to the burning question: Why Hampton? Metcalfe says the Hispanic investors who approached Metcalfe to start the network are based in Rochester, N.Y., and originally wanted to locate SRMusic there. Metcalfe didn't want to move and convinced them to locate in Hampton to tap in to a potential employee pool stretching south to New York City. Besides, for the network to have the necessary access to the specific satellite bandwidth it needed, it was important to locate away from a large urban area like Boston.
And while there are no Spanish-speaking stations in the state, he believes sooner or later a few New Hampshire companies will advertise on the network. Negotiations are currently underway with a small specialty food company based in the Seacoast that does a lot of national retailing.
"It's working out quite well," Metcaife says with a smile about his Hampton world headquarters. Next on tap are plans to add another satellite dish and create a separate network for the international market.