The merger between Televisa and Univision is an attempt to create the largest Spanish-language content company in the world in an increasingly competitive streaming market, 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 partner, with a 45% stake, of the new company Televisa-Univision, whose main attraction will be a content platform.
Both companies announced that seeks to serve the 600 million Spanish speakers in 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 reach the Hispanic market in the United States, which is very profitable, with a smaller population than Mexico, but with a much higher purchasing power,” he explained. the founder for Ephesus. of consulting company Telconomía, Jesús Romo.
Even President Andrés Manuel López Obrador highlighted the operation as a sample of Mexico’s cultural power in the United States, stressing that “Mexican investment prevails.”
“We celebrate it because it will allow communication and a commitment that there is no discrimination, no abuse, no xenophobia, that Mexicans are respected and that migrants are respected in the media,” he said in his daily speech on Thursday.
A COMPETITIVE MARKET
The companies boasted that they will have the largest content library in Spanish in the world, with over 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% of the market, compared to almost 75% of Netflix and 8.5% of Amazon Prime, according to the Competitive Information Unit (CIU).
In the United States, 73% of Hispanic households subscribe to Netflix, over other ethnic groups, according to the Statista website.
“This is the most complex question. So far, it seems that there is room for several platforms, despite those that already exist, the user still seems willing to pay more than one or two, “said Efrén Páez, senior analyst at Digital Policy & Law, a consultancy telecommunications.
In calls with investors, according to Páez, Televisa executives expressed confidence in following in the footsteps of Disney +, a traditional content company that has transferred its loyal followers base to the digital platform.
However, the analyst noted that Televisa must also present a content strategy, as did Disney, which justifies the payment of the service and shows how it will generate loyalty to its users.
“The diversity of content will make a difference, I don’t think Televisa should abandon the soap opera format, it can still work, but that format needs to be nurtured to fit the type of stories being consumed today,” Indian said.
BACK TO THE ROOTS
Televisa will retain ownership of pay-TV and Internet providers in Mexico, such as Izzi Telecom and Sky, as well as other companies.
Even so, the merger reveals that Televisa will bet on the content again after engaging in other businesses after the 2014 telecommunications reform in Mexico.
“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 has been very well defined. It means going back to the roots of a content company, “said Romo of Telconomía.
In Mexico, the operation will be analyzed in the Federal Institute of Telecommunications (IFT), which in the past declared Televisa a major player in the market.
“Although they do not buy stations or stations, the power of their content increases anyway. This will have to be taken by IFT, because one of the questions to be asked now is how does this change the issue of preponderance?