Although TelevisaUnivision’s U.S. advertising revenue for first quarter 2024 was flat, the company foresees major opportunities ahead during the upfront as well as in the election cycle. At the same time, its streaming platform, ViX, has grown its audience, with total streamed hours more than doubled in comparison with a year ago. That points to further growth ahead. Those were some of the topline messages delivered by the company’s top officials during a call with analysts this morning.
Softness in ad revenue from the U.S. linear networks was offset by growth in ads on the ViX platform. Combining them together, the ad growth was flat. When Mexican operations are factored in, the company’s ad revenue jumped 7%, to $647.9 million.
Subscription and licensing revenue was also flat in the U.S., but grew by a whopping 34% in Mexico. In both countries, subscriber losses on the linear platform front were partially offset by the growth of ViX’s premium tier. All told, subscription and licensing grew 9%, to more than $473 million.
Rolling it all together, total revenue increased 7%, to over $1.1 billion.
“Operationally, 2024 is shaping up to be a pivotal year for us,” said Wade Davis, TelevisaUnivision’s CEO. He pointed to three key areas of focus moving forward: “First, continued penetration of the U.S. advertising market; second, record U.S. ad sales in the 2024 political cycle; and third, the continued scaling of our DTC business and associated profitability.”
The company’s expanded sales team, which is under new leadership, is starting to see results, Davis said. The level of revenue in the first quarter scatter market was the highest in the company’s history, and the pricing gap between mainstream TV prices and Univision is narrowing.
“In Q1 we grew upfront pricing. We grew scatter premiums over upfront on both linear and on streaming, which is a great reflection of a cautiously improving ad market,” Davis said. The company is now primed to take a greater share of political spend during the current election cycle.
Davis noted that in the 2020 election cycle, about $9 billion was spent on advertising, and only 5% of that went to Spanish-language. The Hispanic audience segment’s share of the population is about 15%, so there’s lots of room to grow.
“The U.S. Hispanic electorate are potentially the largest, if not only, swing vote at play in the 2024 elections. 62% of U.S. Hispanics say they’ll vote based on their view of a candidate’s position on issues rather than political-party alignment,” Davis said. “The candidates recognize this, and they recognize that Univision is the most powerful platform to reach this electorate. Univision is the only U.S. broadcast network to host major news specials with both former President Trump and President Biden thus far in this presidential cycle.”
With that in mind, TelevisaUnivision has nearly doubled its investment in news programming.
As for DTC growth, Davis said: “In the second half of 2024, we will be positioned to achieve direct to consumer profitability. And this profitability will be a pure reflection of the P&L of our streaming service — with all corporate overhead fully allocated, and no revenue from traditional linear businesses allocated to DTC. The only other company that has achieved this in the industry is Netflix. Our Q1 momentum was incredibly strong, and we’re only a few months from achieving our profitability objective. All aspects of the business are delivering above our KPI expectations for the quarter.”
Key to the continued DTC momentum is a new ViX tier with limited adverting that will allow subscribers to access content previously only available via the no-advertising premium tier. Davis expects that will attract more ad revenue during the upfront.
Another key development that will impact advertising is TelevisaUnivisions’s switch from Nielsen’s panel-only currency to panel plus big data. “When this happened, we saw empirically for the first time in black and white what we’ve known intuitively for a long time: panel-only data systematically and structurally underrepresented minority audiences. And as a result, that creates unacceptable biases in programming and investment and advertising. This more modern methodology delivers about 20% uplift for our audience and significant uplift for other minority audiences and has no material change for general market white, English-speaking audiences.”
Rich Greenfield of LightShed Ventures asked Davis to comment on the company’s DTC distribution deal with Charter, which involves a narrowly focused Hispanic offering and which followed a similar (but broader) deal between Charter and Walt Disney Co. Greenfield noted that earlier in the day, Comcast officials didn’t mention any similar kinds of distribution deals for its own cable business. Is Charter at the forefront of a trend?
Davis believes that’s the case. “That’s going to significantly enhance consumer value, which is the No. 1 reason that you see cord cutting.”
The expected decline in linear viewing over the next few years, and how AVOD is impacting that trend, also came up in conversation with the analysts. Davis said that TelevisaUnivision’s approach is a little different than some of the other media companies, in that the programming on ViX is complementary to linear and vice versa.
He noted that Univision has rights to UEFA soccer tournament games, which occur during the daytime in the U.S. The preliminary games are carried on ViX, where super soccer fans can access the games on their mobile during the middle of the day. The bigger event games, during the finals, show up on Univision.
“That’s a good example of how we’re able to leverage rights that we have across both platforms but think strategically about how we do it in a way to enhance the viewership experience and rise both platforms,” he said.
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