TelevisaUnivision boasted a strong streaming strategy for the third quarter, in which its free ad-supported service ViX and premium subscription tier ViX+ were fully launched.
Though ViX’s free and paid tiers are separate, they fall under a single product offering, which TelevisaUnivision CEO Wade Davis said is a unique streaming approach that’s already paying off.
“A fully free tier allows us to access the maximum market share,” he said on Thursday’s earnings call, as a large portion of TelevisaUnivision’s audience base “will never be SVOD subscribers.”
Launching a free and a paid tier together allows people to easily sample the service, said Davis. This in turn enables TelevisaUnivision to build a relationship with consumers and understand their viewership preferences.
TelevisaUnivision’s consolidated revenue increased by 5% year-over-year to $1.2 billion. ViX+’s launch in July contributed to subscription revenues for the quarter, which totaled nearly $400 million – up 8% from $369 million in Q3 2021. These metrics encompass TelevisaUnivision’s operations in both the U.S. and Mexico.
Davis pointed out the benefits of creating a platform that supports both ad-supported and SVOD content from the get-go.
“We started with a strategy to have a free ad-supported service alongside a premium subscription tier before we wrote our first line of code,” Davis went on to say. “In our markets, the audiences are lower ARPU and higher churn. In order to drive higher levels of profitability in this reality – the strategy to manage churn and reactivations – is critical.”
Davis added TelevisaUnivision designed the ViX platform to better accomplish those goals, compared to other streamers who “scrambled to retrofit their offerings” for ad-supported functionality.
Both Netflix and Disney are set to introduce lower-cost, ad-supported tiers later this year. But Davis doesn’t think those launches will significantly impact ViX and ViX+’s business.
“[Netflix and Disney] didn’t go through the upfronts, so it’s purely going to impact the scatter market,” he said. “We think it’s largely going to be a share shift within English-language.”
Davis added Netflix and Disney’s entrance to the ad-supported market will primarily focus on premium ad-supported streaming.
“For us, as the market leader in Spanish-language, more focus on that segment of the market is good for us,” he said.
During the call, Davis also talked up ViX and ViX+’s slew of original programming.
“The increased volume of premium original content we’re producing for our streaming platform will drive licensing growth going forward, given the significant opportunity to sell this content outside of our core Spanish-language markets,” he noted.
ViX+, costing around $7 per month, touts more than 10,000 hours of Spanish-language original content. Davis pointed out ViX, which debuted on March 31, is the only free streaming service in the world that has more than 50% of exclusive and original content volume.
“We’re now producing over 12 hours a day of original news and sports to drive daily viewing and habituation,” he said, adding ViX’s library contains “some of the world’s most powerful and relevant Spanish language content” that can’t be found on any other platforms.
Though ViX+ is still in its early days, Davis believes subscribers are resonating with its original content slate. When ViX+ launched in July, its volume of originals was greater than that of “any other streamer at the time of launch.”
Sweetening the deal, TelevisaUnivision said ViX+ customers would be able to watch one new blockbuster series or first-run original movie per week. Additionally, ViX+ has aired about 3,000 hours of live soccer in the past three months post-launch.
“No one in any language has this volume of original entertainment and premium sports in one app,” Davis said.