Grupo Televisa implements austerity plan
Grupo Televisa announced an "aggressive" cost reduction plan that includes a hiring freeze and salary increases, as well as a temporary reduction in compensation to its top executives after reporting a drop in revenues, mainly due to lower advertising sales in the first quarter.
According to its report to the Mexican Stock Exchange (BMV), the fall in advertising revenue and the depreciation of the peso against the dollar caused a net loss of $8,903 billion pesos in the first three months of the year.
In a conference call with investors, Alfonso de Angoitia, its executive co-chairman, explained the plan of adjustments in the company by providing that the government advertising pattern will be reduced 'even to zero.
He also mentioned that the strict confinements due to the pandemic in Central America and the Dominican Republic will affect the results of SKY Mexico, the Group's satellite television operator.
The media company reported a 0.7 percent annual drop in revenue in the first quarter, mainly due to a 28.4 percent annual drop in revenue from its open television advertising sales business, as customers delayed the start of their advertising campaigns.
"It is also explained," he said, "by a significant deterioration in growth expectations for Mexico triggered by the expansion of Covid-19. As a result of the new level of uncertainty, many customers decided to suspend advertising spending in the last two weeks of the quarter.
Its cable and satellite businesses had single-digit growth in the quarter. But those related to games, soccer, and publishing together registered a 16.5 percent contraction, only offset by an increase in feature film distribution.
The Group distributes its content through free-to-air television channels in Mexico and in 50 countries, through 26 pay-TV channel brands.
The company's pay television companies maintain competition from providers of Internet Protocol Television (IPTV) or free-to-air ("OTT") services such as Netflix, Claro Video and Prime Video (Amazon), as well as from other pay television operators such as Dish Mexico, TotalPlay, Megacable, and other cable television companies. Additionally, the company's cable TV companies face competition from Sky.
It also faces competition in the publishing business, where each of its publications competes for readers and advertising revenue with other general publications and other forms of print and non-print media.
Film production and distribution is a highly competitive and complex business in Mexico. The various producers compete for the services of recognized talent and for the rights to scripts and other literary property. The company competes with other global producers, Mexican and foreign, and global distributors such as Amazon, Disney, and Netflix in the distribution of films in Mexico, the United States, and Latin America.