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Six weeks into the launch of subscription streaming service ViX+, TelevisaUnivision CEO Wade Davis already has a compelling case for why the company’s streaming service stands out from competitors.
“We believe we can deliver a profitable streaming service within the first year of operation,” Davis said.
Speaking at the Bank of America Securities 2022 Media, Communications & Entertainment Conference Wednesday, Davis outlined the factors that differentiate ViX+, which launched on July 21, as well as ViX, the company’s free ad-supported streaming service that launched in late March, from others.
To begin, TelevisaUnivision has the benefit of a vast library of content thanks to the Janaury 2022 merger with Televisa, which provided most of Univision’s content pre-merger. The content the company produces is vertically integrated and made in low-cost locations. Further, TelevisaUnivision is only focused on Spanish-language markets, so it does not need to own rights to the content in all territories.
“We’re not fighting a battle in 186 countries,” he said.
The company’s streaming business is “layering” on top of its linear business, which is notably “stable and growing” in the U.S. and Mexico, and which funds investments into the streaming business, Davis said.
Customer acquisition costs are also lower, Davis argued. The company’s two streaming services are intended to reduce churn, as formerly paying customers can drop down to the free tier, if needed. The customer base on the free tier also provides a potential customer acquisition pool for the paid service.
On the marketing front, the other area that Davis notes can drag down margins, the massive scale of the company means they’re already reaching 125 million Spanish speakers every day across markets, creating promotional opportunities in house.
TelevisaUnivision separates out its content by thinking of linear as “habituated and cultural viewing,” Davis said, which includes traditional novellas, “event-level” sports, reality shows and appointment news. Meanwhile, Vix+ will include 7,000 hours of soccer content, such as preliminary matches, with the hope of building interest in event-level sports on linear. Vix functions more like basic cable, he said.
Davis, the former Viacom chief financial officer, took over as CEO of Univision in late 2020, after his investment company and Searchlight Capital acquired the company. About a year after the acquisition, Univision launched PrendeTV as a first entrance into the ad-supported streaming space.
Davis said PrendeTV was a “good pilot program” for the company, as it pushed further into streaming, and also allowed the company to build out an advertising base at upfronts.
As part of PrendeTV, the company also completed all of its distribution deals, including firming up the soccer rights that now provide much of the content for the streaming services.
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