The merger of Televisa and Univision is a commitment to create the largest Spanish-language content company in the world in an increasingly competitive “streaming” market and with the enormous challenge of attracting young audiences.
The Televisa Group will receive 4.8 billion dollars, of which 3 billion will be in cash and the rest in shares, to become the majority shareholder, with 45% stake, of the new company Televisa-Univision, the main attraction will be a content platform.
Both companies announced that they seek to serve the 600 million Spanish speakers of the world, but analysts agree that its main target is the 60 million people of Hispanic descent in the United States.
“The goal of these companies, rather than growing in Latin America, is to have an arrival in the Hispanic market in the United States, which is very lucrative, with less population than Mexico, but with much greater purchasing power,” he said. explain to Efe the founder of the consulting firm Telconomía, Jesús Romo.
Even President Andrés Manuel López Obrador highlighted the operation as a sign of Mexico’s cultural power in the United States by noting that “Mexican investment prevails.”
“We celebrated it because it will also allow for communication and with the commitment that there is no discrimination, no abuse, no xenophobia, that Mexicans are respected and that migrants are respected in the media,” he said. Thursday in his daily lecture.
A COMPETITIVE MARKET
The companies have boasted that they will have the largest content library in Spanish in the world with more than 300,000 hours of programming.
But analysts warn that this is insufficient in an increasingly competitive market, as evidenced by the fact that Televisa already has a platform in Mexico, Blim, with less than 2% market share, compared to almost 75% of Netflix and 8, 5% of Amazon Prime, according to The Competitive Intelligence Unit (CiU).
In the United States, 73% of Hispanic households are subscribed to Netflix, above other ethnic groups, according to the site Statista.
“This is the most complex question. So far it seems that there is room for more platforms even though they already exist, the user still seems willing to pay more than one or two,” said Efrén Páez, senior analyst at Digital Policy & Law, a telecommunications consultant.
In calls with investors, according to Páez, Televisa executives have expressed confidence in following in the footsteps of Disney +, a traditional content company that moved its loyal fan base to the digital platform.
But the analyst noted that Televisa still needs to present a content strategy, as did Disney, that justifies the payment for the service and show how it will generate loyalty in its users.
“The diversity of content will make a difference, I don’t think Televisa has to abandon the format of the soap opera, it can still work, but it is necessary to feed this format so that it adapts to the type of stories that are consumed currently, “he said.
BACK TO THE ROOTS
Televisa will retain ownership of pay-TV and Internet TV companies in Mexico, such as Izzi Telecom and Sky, as well as other businesses.
However, the merger reveals that Televisa will return to betting on content after engaging in other businesses after the telecommunications reform in Mexico in 2014.
“Now the content part will be the protagonist again and probably the one that dictates the actions and strategies of the group in general, and the perimeter in Mexico was very well defined. It is to return to the roots of a content company.” , pointed out Romo, of Telconomía.
In Mexico, the operation will be analyzed at the Federal Telecommunications Institute (IFT), which in the past has declared Televisa a major market player.
“Although they are not buying stations or stations, in order to grow the power of their contents. This is going to have to be taken by the IFT because one of the questions that is going to be asked now is: how does this change the subject of preponderance? ”Romo reflected.