Spanish-language TV giant TelevisaUnivision swung to a loss in the first quarter, on higher overall revenues.
But the net loss of $3 million for the three months to March 31, against a year-earlier profit of $36 million, was far narrower than the most recent fourth quarter of $1.59 billion due to a steep $1.66 billion non-cash impairment loss, mainly on its goodwill.
Overall revenue grew 6 percent to $1.1 billion during the latest quarter, as TelevisaUnivision included a full first quarter of ViX subscription revenue that the company did not break out in sign-ups. ViX launched in July in the U.S., Mexico and Latin America as the largest Spanish-language streaming service worldwide.
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On Tuesday, TelevisaUnivision said it would end separate campaigns and separate brands for its ViX and ViX+ tiers inside of the same app to end confusion among audiences. “Based on everything we now know and significant incremental work around the brand, marketing and consumer engagement strategy, we are going to quickly pivot to one brand: ViX, with two tiers inside the service: gratis and premium,” CEO Wade Davis told analysts during a morning call.
TelevisaUnivision said engagement on ViX continued to rise from the most recent fourth quarter, with total advertising revenue rising 16 percent to $607.4 million, while it grew 2 percent in the U.S. market to $398.4 million. Subscription and licensing revenue was also up 16 percent to $436.1 million, driven largely by the launch of ViX’s premium subscription streaming tier.
The ViX streaming service is set for a stepped-up launch outside of the U.S. and Mexico, and mainly in Columbia, Peru and the rest of Latin America in the rest of 2023.
But during the analyst call, Davis pointed to a “challenging quarter” as the U.S. advertising market was softer due to the Wall Street banking crisis on its impact on marketing financial service brands. Davis also pointed to “challenging TV usage,” though he put that down to strong World Cup soccer game viewership during the fourth quarter of 2022 and a lighter live sports programming load during the latest quarter.
And he told Wall Street watchers TelevisaUnivision will continue to program its linear TV and expanding streaming offerings “as two distinct and complementary content propositions to allow us to maximize overall audience reach, cross promote, where appropriate, and of course leverage linear and streaming to enhance the overall experience for our audience.”
At the same time, Davis told analysts the company was moving to end “operational complexity” in its two-tier streaming offering. He argued ViX+ suggested it was a streaming version of a legacy TV brand. “You see that in the marketplace. It’s Paramount+, it’s Disney+,” he told analysts, where ViX+ was launched to differentiate the streaming platform from the company’s legacy channel brands.
“Even though there’s going to be essentially a relaunch and an increase in marketing expenses, as we move to this new messaging architecture, in the long run, that’s going to be more efficient to us from a marketing perspective,” he argued.
That’s a departure from major Hollywood studios that, in launching their own streaming platforms, have tended to add a Plus to legacy TV channel brands — as with Apple TV+, ESPN+, BET+ — as a marketing shorthand to signify a new streaming offering in the consumer’s mind.
The relaunch will create one ViX brand, with a free tier and a premium subscription offering, and no longer offer separate Vix and Vix+ streaming brands. “I’m very happy with how quickly the team learned, adjusted and moved forward,” he added of a retooling of the ViX offering in the works that could temporarily slow subscriber growth.
TelevisaUnivision initially launched ViX as an ad-driven video-on-demand service, with Vix+ getting off the ground as the premium subscription video-on-demand offer, and with both VOD tiers housed under the same app. The strategy was to attract customers to ViX and then potentially have them upgrade to the ViX+ SVOD product, which is underpinned by live sports and original content programming.
“We’re in the very early days of growing ViX as a subscription-based streaming tier. And over the course of the year, we’re optimistic about our initiatives in the core part of our business, which is growing ViX’s subscriber base,” Davis told analysts.
But with the changes in how ViX is offered to potential subscribers with a bump in marketing costs for a rebranding, Wade changed earlier guidance that had the company expecting its streaming platform to reach profitability by the end of 2023.
He added TelevisaUnivision had pushed “the break-even of our overall streaming business back a couple of quarters.”
