Mexico. The regulatory authorities of Mexico and the US have approved the concentration of TelevisaUnivision. In the first instance, it was the Federal Institute of Telecommunications (IFT) in Mexico that approved the integration of these two players in September 2021, without noticing anti-competitive effects in the telecommunications and broadcasting sectors.
While the counterpart institution in the US, the Federal Communications Commission (FCC) gave its approval in recent days, from which it was announced the creation of the largest conglomerate of content for Spanish-speaking markets in the world, which derives from the vast collection and experience of two historical leaders.
This unprecedented operation seeks to strengthen the competitive positioning of Spanish-language productions globally, through a multiplicity of entertainment platforms and services, including free-to-air television channels, pay-TV channels, radio stations and digital audio and video platforms.
On the Televisa side, the integration includes four Televisa free-to-air television channels, the 27 channels it holds in pay TV, the Videocine film studio, the subscription video on demand (SVOD) service Blim TV. Univision's U.S. assets include Univision and UniMás channels, nine Spanish-language cable channels, 59 television stations and 57 radio stations in major U.S. Hispanic markets and its ad-supported on-demand streaming service (AVOD) PrendeTV.
This strategic integration adds to the chapter of mergers and combination of assets that has taken place in the audiovisual content creation and distribution market to strengthen the reach and market footprint of media companies globally, such as Disney-Fox and Warner Bros. Discovery.
Scope of the Conglomerate
The addition and multiplication of creative, capital, infrastructural resources, among others of TelevisaUnivision will enable the direct provision of audiovisual content to more than 600 million Spanish-speaking people around the world, a high proportion of them in North America alone. The total represents the fourth largest audience in the world for the spoken language, after English, Mandarin Chinese and Hindi.
TelevisaUnivision will combine the world's most extensive library of Spanish-language content with 300,000 hours of content, which is roughly 100 times netflix's total worldwide.
Synergies and Operational Efficiencies
It is estimated that TelevisaUnivision will be a company that will achieve joint revenues in the order of $ 4,000 million dollars, 12% higher than those registered by Netflix corresponding to the payment of subscriptions in Latin America in all of 2021 and earnings before interest, taxes, depreciation and amortization (EBITDA, for its acronym in English) for $ 1,600 million dollars.
This would allow investments in the generation of new original content close to those of other players in the global ecosystem of streaming platforms, for example, HBO Max and Apple TV + that allocated $ 2,000 and $ 3,500 million dollars respectively, during 2021.
In addition, following the merger of both companies, TelevisaUnivision's U.S. dollar-denominated assets and liabilities will be equalized. The transaction enhances the value of the conglomerate from the optimization of administrative and operational costs of production.
Compete in the Global Ecosystem of Streaming Platforms
TelevisaUnivision will be inserted in a global competitive ecosystem in which platforms of North American origin seek to compete with the realization of local productions in the Spanish language. The combination of content and libraries [GR1] of both companies would boost the positioning of their creative products, in front of those global players, which lack the robustness of titles in Spanish that TelevisaUnivision holds.
The strategic union of these media companies seeks to detonate the reach of spanish-language content that reflects the identity, diversity and culture of Spanish-speaking countries.
Therein lies one of the main competitive advantages and differentiating factor of TelevisaUnivision's global streaming platform that will be launched in 2022, compared to the available offer. Additionally, it will offer the possibility of free access to its catalog, but also with a premium version, under the subscription model, to detonate its reach to all audience segments of different payment capacities.
To this is added, the diverse amount of channels and live programming, as is the case of sports content, which would contribute to the generation of added value for audiences.
All in all, it is an operation that will drive leadership, innovation and dedication of capital resources for the generation of content in Spanish, an outstanding strategic move for this segment of the entertainment industry worldwide.
Analysis by The Competitive Intelligence Unit, CIU.
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