Televisa allocates USD 1 billion for investments in 2019
Broken down, Televisa will allocate 650 million and 250 million respectively for the expansion and improvements of its Cable and Sky segments, and the remaining amount for its Content and Other Business segments.
Generally, in Mexico, cable television offers multiple channels of entertainment, news and information programs for subscribers who pay a monthly fee. These rates are based on the package of channels that subscribers receive.
According to the Federal Institute of Telecommunications, at the end of last year, there were approximately 884 pay television concessions in Mexico, including 402 integrated single concessions, which served approximately 19,483 million subscribers (including cable and DTH).
Grupo Televisa business
In terms of digital cable television services, the cable companies of Grupo Televisa offer an interactive on-screen programming guide with direct access to Blim and Netflix, through the Izzi TV platform, video on demand, high-quality channels, definition, and other services throughout Mexico.
Along with its digital pay television service, Grupo Televisa's cable companies offer high-speed Internet and competitive digital telephone service. Through their network, they can distribute high-quality video content, new services, interactivity with video on demand, 1080i high definition, impulse and payment by vision order, on-demand programming, among other products and services, with features of added value and premium solutions for consumers, telephony and internet.
The cable companies of Grupo Televisa offer mobile applications such as Izzi Go, which is a TV Everywhere application compatible with the iOS and Android platforms, which allows subscribers to access channels, films, and series on demand. Izzi Go also has a remote control compatible with its decoders and allows subscribers to rent additional content through the application, all for a fixed price.
Innova and its subsidiary
The company operates Sky, its DTH satellite company in Mexico, Central America and the Dominican Republic, through Innova. Grupo Televisa is the indirect owner of 58.7% of this company. The remaining 41.3% of Innova is owned by DIRECTV.
The Social Partnership Agreement of Innova establishes that neither Grupo Televisa, nor News Corp., nor DIRECTV can operate, directly or indirectly, or acquire a stake in any company that operates a DTH satellite system in Mexico, Central America and the Dominican Republic ( subject to limited exceptions).
Televisa profits down 20.1%
Grupo Televisa's profits fell 20.1 percent in the first quarter, hit by lower government spending on advertising, and it is expected to continue to fall.
Televisa, the world's largest producer of audiovisual content in Spanish, reported a net profit of 541.7 million pesos between January and March 2019.
The company's consolidated sales increased just 2.6 percent in the period, boosted by its Internet and cable television segment, which offset a weak performance in its content and satellite television businesses.
Its advertising revenue decreased 13.8 percent in the quarter, affected by a significant drop in government advertising derived from an austerity strategy by Mexican President Andrés Manuel López Obrador, which took office in December last year.
"The new government is implementing a series of public policy measures aimed at freeing up funds for other initiatives, one of which is the reduction of its total advertising investment," the company said in a statement.
Televisa had consolidated a large part of its profits thanks to the sale of advertising that it received from the federal government in the previous six years, especially that of Enrique Peña Nieto. The resources that for decades governments allocated to the media served to restrict, in many cases, freedom of expression, according to the organization Artículo 19 warned in several reports. However, with the entry of the new Government, the situation changed for large communication companies such as Televisa.
With the new austerity policy implemented by the Government of President López Obrador, the resources that the television station received for the concept of state advertising sales were reduced, this was recognized by the company of Emilio Azcárraga Jean in his quarterly report published this Monday at the closing of the Mexican Stock Exchange (BMV).
Televisa's advertising sales in the first quarter of 2019 decreased by 13.8 percent to 3,681.9 million, compared to 4,272.7 million in the first quarter of 2018. The decrease in sales is mainly explained by a significant drop in sales. government advertising, while advertising sales to the private sector decreased by approximately 2 percent.
"The new government is implementing a series of public policy measures aimed at freeing up funds for other initiatives. One of these measures is the reduction of its total investment in advertising, which publicly indicated that in 2019 it would decrease by approximately 50 percent compared to 2018. This measure will be applied to all media, including radio, print, digital and television. It should be remembered that government advertising accounted for 11 percent of our total advertising revenue last year or about 2 percent of consolidated net sales," Televisa explained in its report.
It was anticipated that government advertising will fall around 50 percent this year. However, during the first quarter, the reduction in advertising sales to the government was greater than 50 percent, probably because the campaigns of several government entities are still to begin, the company said.
Peña government advertising spending
Although it not yet published the official figure of spending on advertising during the government of the PRI Enrique Peña Nieto, national and international organizations, such as Article 19 and the Inter-American Commission on Human Rights (CIDH), estimated last August the amount would reach 60 billion invested in social communication, a historical figure in Mexico. The civil society organizations consider that the expenditure was basically made to buy the editorial line of printed newspapers, television and radio broadcasters, as well as digital media.
Only between July and November of 2018, the last four months of the six-year term, the Mexican politician's government spent at least 2 thousand 277 million 605 thousand pesos in the dissemination of their supposed achievements in social matters and the promotion of the 12 messages with the that the former President said goodbye to the Mexicans and in those who said that he delivered "a much better Mexico" than the one six years earlier.
In this last Peña government shopping spree, the most benefited companies were Televisa of Emilio Azcárraga Jean with 522 million 993 thousand 46 pesos and TV Azteca of Ricardo Salinas Pliego with 383 million 261 thousand 147 pesos. In the case of this last consortium, not only its television channels broadcast the "conquests" of the administration that in those months said goodbye; so did the screens that Banco Azteca has installed in its branches as ad showcases.
Advertising would be cut in half
President Andrés Manuel López Obrador announced since his arrival at the Presidency that spending on advertising would be cut in half, thanks to the fact that only the budget approved by Congress would be used, no more as it happened during each year of the administration by Enrique Peña Nieto.
In point 29 of the austerity plan of López Obrador, it was assured that the approved budget would be 2 billion pesos for this item for 2019, in contrast to the more than 4 billion pesos in the last year of the administration of Enrique Peña Nieto and the 9 billion pesos that on average were allocated in each year from 2012 to 2018. Finally, the money approved for official advertising was 4 thousand 711 million pesos.
According to the Medios Libres group, the reduction alone "does not solve the problem of the arbitrary and discretionary allocation of official advertising if clear, transparent and objective criteria of allocation are not considered, such as suitability, measurement of audience, costs, circulation, the profile of the public to which the campaign is destined and, above all, that promote diversity and media pluralism. Not like that about the multimillion-dollar exercises that are carried out without justification today. "
Recently, Jesús Ramírez in charge of Social Communication of the Government of Mexico assured that government advertising would make use of the official times that are those that by law have no cost and that work will be done to equalize the conditions between the media and not favoring any in specific, as it was before.
Among the new communication policies that the current government will handle, he listed these on April 17:
No media can have more than 25 percent of a campaign.
For the production of materials, the public media will be privileged, they will be done within the Government, agencies will not be hired. Creatives, directors, and actors will be hired directly.
Use of 100 percent of official times.
The renegotiation of advertising rates with the means to close the gap with commercial rates was also announced.
With information from SinEmbargo
Televisa bets on the creation of original content
Televisa gave Amazon Prime its series "Demon Guardian" and "A strange enemy", now it will produce new entertainment programs with Endemol Shine.
The first was an adaptation of Xavier Velasco's book of the same name, with the participation of Paulina Gaitán as protagonist, who had previously worked for Netflix when he gave life to 'La Tata', Pablo Escobar's wife in "Narcos"; and Pedro Alonso, Spanish actor known in Latin America for his role as 'Berlin' in "La Casa de Papel", another Netflix production.
"A strange enemy" for its part was a miniseries that recreated the student movement of 1968 that culminated in the massacre of Tlatelolco and Daniel Giménez Cacho as protagonist in the role of the commander of the secret police Fernando Barrientos.
Both productions were well received by the critics, "Devil Guardian" is waiting for a release date of a second season, while TAO prepares a second adaptation of a book for television with "The Last Dragon", by the novelist Arturo Pérez-Reverte, however, will be directed to open television.
This alliance with Amazon Prime came two years after the launch of Televisa's streaming platform, Blim, with which it tried to compete with Netflix by removing all its content from the US platform to take it to its own, however, within its financial statements Blim's income has never been broken down.
Although Televisa continues to be the leading company in the production of content in Spanish, in the last five years the recruitment of audiences in the new generations has been its 'Achilles heel', so much so that in October 2017 it brought Emilio Azcárraga Jean to leave the executive presidency of the company, although he kept his position as president of the Board of Directors.
On January 22, it was announced that Endemol Shine Boomdog, based in Mexico City, led by CEO Alejandro Rincon, and Televisa Studios will co-produce a series of original scripted and unscripted series for the Mexican markets. Hispanics from the United States and the rest of the world. Which predicts a greater increase in sales of programs and licenses for the following quarters.
Endemol Shine and Televisa have a long collaboration that goes back to 2002 with the appearance of "Big Brother", an original Endemol product that was adapted in dozens of countries, including Mexico; other programs that adapted to national television were "Star Academy", "Fear Factor" and the telenovela of Endemol-Telefe, "Los Exitosos Pérez".
Televisa is in a process of change and is betting that its production company can float its content business.