Raúl Alarcón Jr., Chairman/CEO of Spanish Broadcasting System, on His Push Into Streaming and Why He Won't Go Back to Cuba
When Raúl Alarcón Jr. was a 9-year-old growing up in Queens, his dad would arrive home late to the two-family duplex and, carrying a stack of vinyl records, retreat to the basement and crank up the volume. Once Alarcón Sr. found a single he liked, he would play it again and again and shout: "It's a killer!"
"My father was a music man," recalls Alarcón of his namesake, who, after fleeing Cuba for New York in 1960 -- leaving behind six radio stations -- purchased his first U.S. frequency in 1983. "Music was his life." Today, the publicly traded Spanish Broadcasting System (SBS), run by Alarcón Jr., 60, since 1994 when he took over as CEO (and chairman in 1999), is a 500-employee media empire that encompasses TV (Mega TV), live entertainment (SBS Entertainment), the 100-station syndicated Aire Radio Network and 17 radio stations in major U.S. markets and Puerto Rico, including New York's WSKQ (Mega 97.9 FM), the top-rated station in the city, in any language, according to Nielsen.
Alarcón's latest move is to aggressively enter the digital realm with LaMusica, a music streaming app that relaunches this summer with a video-centric format featuring proprietary, "snackable," short-form original content.
An iconoclast who likes to hold business meetings at his palatial estate in Coral Gables in Miami -- sometimes in shorts and sandals -- Alarcón hosted Billboard poolside at his gazebo office where the conversation dove deep into the ever-changing U.S. Hispanic marketplace, but steered clear of politics. "The Hispanic niche is huge, and in most instances tends to vote as a single bloc," he says. "Disregard us at your own peril!"
You have a very profitable terrestrial radio and TV operation, so a simple streaming app makes sense. Why go beyond that?
Radio continues to be a very vibrant, up-to-date and current medium. However, it's not impervious to the competition, and there has been an enormous amount. We've tried to adapt ... with the creation of our concert and events division, aligned naturally with radio, and now we're using technology to not only create a new service, LaMusica, but also further our main business of terrestrial radio by adding video that becomes the central focus of the app. LaMusica will publish 60 to 80 pieces of video content every week, ranging from 30 seconds to 90 seconds.
How will you make money?
The business model now and for the foreseeable future is advertiser-based. We will now be able to include mobile video advertising on the app, which we haven't done to date. That's an exploding category.
You have plenty of competition, including iHeart and Univision, which has its Uforia App and is also creating original content. Does this worry you?
No. We have 35 years of market knowledge and of being able to very surgically program to the multiple variations of Latins in the U.S. It’s very different to program to a U.S. Hispanic than it is to a Colombian or a Mexican. We dedicate tremendous time and effort into investigating relevant music offerings to audiences via radio. We stay ahead of the trends. Sometimes we’re caught by surprise, but not often.
How important is the use of English versus Spanish?
We try to be reflective of the market because that's the audience. [In radio], some stations have a younger focus, and having some English is a natural extension to the public we're addressing. Digitally, we've put young, bilingual, bicultural millennials [including Alarcón's daughter Bianca] to work and [the mandate is], "Do things in a way that you feel addresses your needs." [LaMusica is helmed by former MTV Tr3s head Jesus Lara.] We're not putting restrictions. The overarching strategy is authenticity. We want to create video content that speaks authentically to the Hispanic audience.
It seems some ostensibly Latino-focused media companies downplay the "Latin" part, preferring to say they're targeting "millennials" or the general market, which happens to have a large Latin population. What are your thoughts?
That's absolutely a fair statement as far as the focus. But it can also sound a bit diminishing. In radio, for example, we're trying to reach a Latin audience, but in New York, Mega 97.9 FM is the No. 1 station in the market, in any language. But I don't have any problem in saying this is a Latino-focused initiative. That is our market. That isour target. But the expression of that target is up to them.
As someone who has been in business for more than three decades, would you say the U.S. Hispanic market is more relevant now?
Absolutely. It's an important segment of America. It's far more visible than in its past history and more vocal. It has bigger buying power. [According to Nielsen, Hispanics spent $1.5 trillion in 2015.] It's a market we've had tremendous belief, faith and confidence in for three decades, and we continue to believe that it needs to be served properly in terms of entertainment.
You wanted to be a doctor. Did your father steer you to music?
I went into Fordham University for pre-med and got my Bachelor in science. My dad always said, “Do whatever you want.” But he was a very creative guy, and before he had the radio station, he had an advertising agency and a very big recording studio in New York, Latin Sound. One day he had me produce and mix a commercial for him and that was my introduction to that world. I got my degree and went straight into the family business.
You have a reputation for being very hands-on. What happens if you hear a "killer" song?
I used to spend summers in Palma de Mallorca [in Spain] and would visit the clubs and record stores. After a while, the programming guys knew that in late August I'd return with a batch of songs for them to play. I think I can lay claim to bringing back "Mambo No. 5," "Mayonesa," "Macarena." I'd say, "I went to the club, they put on this song and everybody started dancing." It harks back to my father. "It's a killer!" And yes, if I hear something today that catches my attention, I absolutely will call my programming guy.
What is the secret to La Mega's continued success?
Mega is a contemporary tropical radio station for metropolitan New York. That's what it always has been. It could be reggaetón, bachata, Cubatón ... we see what the public is dancing to in the clubs and offer that to our listeners. We program to a marketplace that we know intimately, and we are constantly checking, adapting, measuring.
What do you think of the normalization of relationships with Cuba? Do you plan on going back?
I'm a bit schizophrenic about that. On one hand, I'm intensely fascinated by what I've heard about Cuba and Cuban youth and what they're up to. But I cannot bring myself to [go back], because I'm fundamentally in disagreement with the political situation in Cuba. The normalization of relationships has many positive ramifications, but my upbringing, my family's history, impedes me from [returning]. And I don't think I will.
It has been said SBS doesn't play Cuban music from the island. Any truth to that?
My personal position regarding the political situation of Cuba has no impact whatsoever on music worthy of airplay and exposure. Right now there's huge interest in Cubatón -- what Cubans have interpreted as their own reggaetón. [Cuba-based] Jacob Forever is a huge exponent. And we have a Cubatón-specific playlist. For 35 years, we've been giving audiences what they want. And if they want Cubatón, we're going to give it to them.
Is Latin media in general and your stations in particular having a bigger influence on politics and the elections?
Absolutely! The implications of catering to a constituency that can mean the difference between victory and defeat are obvious. Interestingly, I've noticed that the recent political "noise" about the undesirability of Latinos has only served to unite us even more - and that's a good thing! Hispanic consumers guarantee growth.
A version of this article was originally published in the Aug. 6 issue of Billboard.