Televisa-Univision merger seeks to cash in on Latino growth
Source：The Financial Times
From：Taiwan Trade Center, Mexico City
In mid-April — just before Netflix unveiled disappointing quarterly subscription figures in Latin America, a region that has long been an engine of growth — Mexico’s top broadcaster Televisa and New York-based Univision unveiled a US $4.8-billion content merger.
Bolstered by $1 billion in funding from Japan’s SoftBank, they aim to launch a streaming service next year targeting the global Spanish-language market.
The still-to-be-named venture will face stiff competition: Netflix entered Latin America a decade ago, while the past two years have seen the arrival of Amazon Prime’s video on-demand service and Disney Plus. WarnerMedia is launching its HBO Max platform in the region this month.
But Emilio Azcárraga, executive chair of Televisa, is confident they can pull it off. “Either Univision or Televisa alone would find it impossible to have the scale to generate the cash to be able to be relevant in content production and distribution,” he said. “Together, we have the reach, the size and we have the money.”
Still, it is a tall order for Televisa that has a library of hundreds of thousands of hours of melodramatic soaps known as telenovelas, films and sports, but little experience in producing edgier shows or in tailoring content to what audiences want to watch in the way the streamers do.
But encouragingly for the new venture, Spanish-language and particularly Mexican-made content is booming in the important U.S. market, according to data provider Parrot Analytics.
The Televisa-Univision venture will use Televisa’s production capabilities and seek to leverage its vast back catalogue. But Televisa spends just $1 billion a year on content compared with Netflix’s $17 billion and Azcárraga did not say how much it would invest in content in future.
Televisa’s first-quarter ad sales rose 28% versus the same period last year while content revenues rose 10% and 200,000 subscribers were added. Univision’s own pay-TV venture, PrendeTV, launched in March with some 900,000 subscribers in its first month and core advertising revenues rose 7% in the first quarter.