TelevisaUnivision Hails Growth In Tough Ad Market

TelevisaUnivision outperformed the general advertising market in the first quarter, CEO Wade Davis told Wall Street analysts in the company’s quarterly conference call Tuesday morning. “According to Magnum, the overall U.S. advertising market declined 6% in the quarter. Our 2% growth amounted to outperformance of 800 basis points, which is on par with the ratings we over-delivered relative to the market last quarter,” he said.

Davis noted that the company’s ad business in the U.S. grew 6%, while local declined by 5%. There has also been some volume decline in the scatter market from last year’s “historic” level, but Wade said his company is still seeing premiums of 30% in scatter.

Wade noted that the company’s challenges in the U.S. continue to be advertisers who ignore the Spanish-language audience and the pricing gap which undervalues Spanish media. “Fundamentally, we continue to outperform the market as we execute these two considerations: Bringing new advertisers to the platform and increasingly moving toward price parity with the general market. Closing the price gap and bringing U.S. advertisers and their spend closer to what our audience reflects in terms of population and purchasing power represents hundreds of millions of dollars of that revenue upside for us,” the CEO said.

CFO Carlos Ferreiro reported growth across all revenue streams. Consolidated pro forma growth of 6% to $1.07 billion included growth of 4% in the U.S. to $739.1 million and 12% in Mexico to $331.8 million. Total advertising revenue growth of 6% to $607.4 million included 2% growth in the U.S. to $398.4 million and 14% in Mexico to $209.0 million.

While the ViX streaming service that launched last year is continuing to grow revenues and viewing hours, TelevisaUnivision is doing a reset to eliminate some public confusion. Wade told analysts that people associate “plus” with a streaming service associated with a legacy brand — such as Paramount+ and Disney+. Rather than designating its subscription tier as ViX+, the Spanish-language streaming service will have a single brand identity going forward — ViX — with internal options for the gratis tier and the premium tier. And Wade noted it was expensive to promote two new brands differentiated by having ads and being ad-free.

“Even though there’s going to be essentially a re-launch, or an increase in marketing expenses as we move to the new messaging architecture, in the long-run that’s going to be much more efficient for us from a marketing perspective,” he told analysts.

“We’re super excited,” the CEO said when asked about the upcoming U.S. upfront. “We are continuing to outperform the market, particularly in soft macro-economic times where advertisers are really seeing the ROI from shifting dollars away from an overspent general market to an underspent Spanish-language opportunity. And so, I don’t see any reason why we won’t continue to outperform in the upfront at or about the rate at which we have been outperforming the market in the most recent quarters,” said Wade.