The merger of 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 a young audience.
The Televisa group will receive $ 4.8 billion, of which 3 billion in cash and the remainder in shares, to become the majority partner, with a 45% stake, of the new Televisa-Univision company, the main attraction of which will be a content platform. to be. .
Both companies announced this try to serve the 600 million Spanish speakers of the world, but analysts agree that the main target is the 60 million residents of Hispanic descent in the United States.
“The goal of these companies, rather than growing in Latin America, is to reach the Spanish market in the United States, which is very lucrative, with fewer residents than Mexico, but with much greater purchasing power,” explained the company. founder to Efe. of the Telconomía consultancy, Jesús Romo.
Even President Andrés Manuel López Obrador called the operation an example of Mexico’s cultural power in the United States by pointing out that “Mexican investment prevails”.
“We celebrate because it also enables communication and with a commitment that there is no discrimination, abuse, that there is no xenophobia, that Mexicans are respected and that migrants are respected in the media,” he said in his daily report on Thursday. reading.
A COMPETITIVE MARKET
The companies are proud to have the largest library of content in Spanish in the world with over 300,000 programming hours.
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 Netflix’s nearly 75% and 8.5%. Amazon Prime. , according to The Competitive Intelligence Unit (CIU).
In the United States, 73% of Spanish households subscribe to Netflix, above other ethnic groups, according to the Statista site.
“That’s the most complex question. So far it seems there is room for more platforms, despite the ones 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 telecommunications consultancy.
In phone calls with investors, Televisa executives have expressed confidence in following in the footsteps of Disney +, a traditional content company that has transferred its loyal base of followers to the digital platform, according to Páez.
But the analyst noted that Televisa still needs to present a content strategy, as Disney did, that justifies paying for the service and shows how it will generate loyalty among its users.
“The diversity of the content is going to make a difference, I don’t think Televisa should leave the telenovela format, it can still work, but that format should be nurtured so that it adapts to the kind of stories currently being consumed.”, Indian.
BACK TO THE ROOTS
Televisa retains ownership of pay TV and Internet providers in Mexico, such as Izzi Telecom and Sky, as well as other companies.
Still, the merger reveals that Televisa will bet on content again after dealing with other companies following Mexico’s telecommunications reform in 2014.
“Now the content part will again be the protagonist 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 means going back to the roots of a content company, ”says Romo from Telconomía.
In Mexico, its operation will be analyzed in the Federal Institute for Telecommunications (IFT), which has in the past declared Televisa to be a dominant player in the market.
“Although they don’t buy stations or stations, the power of their content is still growing. This will have to be taken by the IFT because one of the questions that will now be asked is how does this change the issue of preponderance?