Is TelevisaUnivision CEO discussing the Disney-Charter deal and changing views on streaming and linear TV?

Spanish-language media giant TelevisaUnivision has unique advantages in maximizing the returns of its content investments across its linear and streaming businesses, and the recent new-look carriage deal between the Walt Disney Co. and cable giant Charter Communications is good news for the company, CEO Wade Davis said on his team’s third-quarter earnings conference call on Wednesday.

“We totally agree with Charter,” Davis said about the cable company taking a strong stand against Disney and other content giants to seal a new kind of deal for the streaming age. “To strip down their linear programming proposition to create DDC services that are cannibalistic and ended up fragmenting the audience and competing with the linear bundle, while at the same time raising prices for consumers has totally undermined the value of the video bundle and driven cord-cutting which has hurt all of us.”

Importantly, “our strategy has been different from day one,” he argued. “We build streaming as a totally non-overlapping (offering), complementing linear, and we are investing in both.” This has led to growth in TelevisaUnivision’s share of TV viewership and growth in streaming “where 60 percent of that audience is unique,” he said.

Concluded the CEO: “Where we sit today with those two platforms, it is really, really positive for us if the rest of the industry moves in the direction that Charter set with Disney.”

Advantages of TelevisaUnivision’s Strategy

Why? For example, “we have no long-tail network drop risk,” Davis said, noting the company has four broadcast networks and “seven niche networks that distributors can take or not, which has no economic impact to us.” Plus, the firm has two cable networks, one of which is top sports network TUDN, and the other is top cable entertainment channel Galavision that together represent “54 percent of all of the viewership out of the top 10 Spanish-language cable networks.”

Second, because “our streaming services are completely additive to linear from a programming and content perspective, we think distributors are much, much more likely to ascribe value and pay incremental fees should they seek to expand the bundle and include ViX.”

Plus, ViX being still in its early stages of growth means “relatively low levels of penetration, (so) we would get a lot more benefit from penetration that would come from bringing ViX into into a broader video bundle.”

Efficient Management of Linear and Streaming Platforms

Davis also addressed how TelevisaUnivision efficiently manages its linear and streaming businesses. “Our massive, fully integrated infrastructure has been constantly producing at full capacity, guided by sophisticated analytics and insight, optimizing the power of all our platforms through innovative windowing and production strategies and allowing us to maximize the value of our rights and intellectual property,” he said. “This system allows us to program our linear and streaming platforms. We are continuing to delight our networks’ audience on linear TV, while expanding our reach to new audiences that have not been historically well served by linear TV and Spanish on streaming.”

Importantly, he highlighted that “our strategy and assets allow us to leverage each platform for what it does best,” explaining: “Linear is designed around cultural and habituated viewing with live soccer, tentpole, high-volume novelas and appointment viewing, like morning and evening news. Streaming is designed to deliver high-intent viewing around our original movies and series.”

The third quarter had “some fantastic examples of the two platforms working together in concert,” Davis said, mentioning Mexican reality show La Casa de los Famosos, “where we produce different and complementary content for streaming and for linear. The linear show is a traditional twice-weekly live reality show that aired on Channel Five. And for streaming, we produced separate content that was pitched from linear and included multiple live 24-hour feeds that drove always-on engagement for the superfan. We are able to produce a huge volume of content at incredibly low price points per hour, and we are able to cross-promote the two platforms and experiences to create enormous regional engagement on linear where the show propelled Channel Five to the number 2 position in Mexico.”

The Importance of Sports in TelevisaUnivision’s Business

Davis on the call also called sports, specifically soccer, “critical” to the company’s linear and streaming businesses. He also touted the company’s unmatched volume of soccer programming on the streaming side.

Profitability in Streaming Business

Earlier, TelevisaUnivision reiterated that it plans to be profitable in its streaming business as of mid-year 2024. “When we deliver this, this will have had the shortest ramp to profitability of any major streaming service,” Davis said, arguing that “the unique content costs and the powerful marketing advantages we have created with the combined TelevisaUnivision business” are among the key drivers making this possible. “We believe our margins will also be best in class,” the TelevisaUnivision CEO added.