Spanish-language media giant TelevisaUnivision has a unique advantage in maximizing returns on its content investments across its linear and streaming businesses, according to CEO Wade Davis. He expressed his agreement with Charter Communications, a cable giant that recently struck a new-look carriage deal with the Walt Disney Co., which takes a strong stand against content giants in the streaming age.
Davis praised Charter’s decision to strip down its linear programming in order to create Direct-to-Consumer (DDC) services that complement linear television. This strategy avoids cannibalizing the audience and fragmenting the linear bundle, which has driven cord-cutting. TelevisaUnivision, on the other hand, has taken a different approach from the beginning by building streaming as a non-overlapping offering that complements linear television. This strategy has led to growth in the company’s share of TV viewership and significant growth in its streaming audience.
The CEO emphasized the positive impact of the recent deal between Charter and Disney on TelevisaUnivision. He highlighted the company’s lack of long-tail network drop risk, as it has four broadcast networks and seven niche networks with no economic impact if distributors choose not to take them. Additionally, the company boasts two cable networks, including the top sports network TUDN and top cable entertainment channel Galavision, which represent 54% of viewership among the top 10 Spanish-language cable networks.
Moreover, TelevisaUnivision’s streaming services are seen as additive to its linear offerings. This means that distributors are more likely to ascribe value and pay incremental fees to expand their bundle and include ViX, TelevisaUnivision’s streaming service. Since ViX is still in its early stages of growth, it has relatively low levels of penetration. Davis believes that bringing ViX into a broader video bundle will yield significant benefits.
Davis also discussed how TelevisaUnivision efficiently manages its linear and streaming businesses. The company’s massive, fully integrated infrastructure operates at full capacity, guided by sophisticated analytics and insights. This allows them to optimize the power of all their platforms through innovative windowing and production strategies. By leveraging their rights and intellectual property, TelevisaUnivision is able to maximize the value of their content. The company’s strategy and assets enable them to utilize each platform for its strengths. Linear TV is designed for cultural and habituated viewing, while streaming is designed to deliver high-intent viewing around their original movies and series.
Davis provided an example of the two platforms working together in concert during the third quarter. The Mexican reality show “La Casa de los Famosos” produced different and complementary content for both linear TV and streaming. The linear show aired twice-weekly on Channel Five, while the streaming content included multiple live 24-hour feeds to engage super fans. The cross-promotion between the two platforms led to enormous regional engagement and propelled Channel Five to the number two position in Mexico.
Sports, particularly soccer, are crucial to TelevisaUnivision’s linear and streaming businesses. The company boasts an unmatched volume of soccer programming on the streaming side.
In terms of profitability, TelevisaUnivision aims to achieve profitability in its streaming business by mid-year 2024. Davis believes this will be the shortest ramp to profitability for any major streaming service. He attributes this achievement to the unique content costs and powerful marketing advantages created through the combined TelevisaUnivision business. The company expects its margins to be best in class.
In conclusion, TelevisaUnivision’s unique advantages in maximizing returns on content investments across its linear and streaming businesses position it well for success, especially if the industry follows in the footsteps of Charter’s deal with Disney. The company’s non-overlapping streaming offering, efficient management of its platforms, and focus on sports and original content contribute to its strong position in the market.