For TelevisaUnivision, the fourth quarter marked the first full quarter that both the paid and free tiers of the ViX Spanish-language streaming service were fully live. On the free tier alone, ViX now boasts more than 25 million monthly active users.
CEO Wade Davis spoke to the operational benefits from offering the two tiers inside a single app, with ViX’s free ad-supported version a particularly critical component.
“Having a free tier makes this a mass market product for an audience that has limitations around subscription penetration,” he said on Thursday’s earnings call, echoing comments he made in October. Not only is the free tier accessible, it’s also a “massive” customer acquisition funnel for ViX’s paid tier, with Davis noting “we’ve already seen it deliver more than half of the growth subscriber adds.”
The paid version of ViX – ViX+ – launched in July, whereas the free tier rolled out slightly earlier in March. The paywalled tier is ad-free except for certain sports content.
Moreover, Vix’s AVOD engagement and time spent is “higher than other free services,” said Davis, who pointed out month-to-month engagement is “growing rapidly.” ViX also has the recognition of being named Apple TV’s App of The Year for 2022 – the first Spanish-language app to obtain the award.
“Since we’ve launched ViX in March, on a global basis when you look at it across the U.S., Mexico and ROLAC [Latin America and the Caribbean], we’re seeing total streamed hours grow 20-30% month to month,” he said.
Full year subscription and licensing revenue increased 20% to $1.7 billion, reflecting the launch of ViX’s subscription tier and nearly $150 million from sublicensing World Cup rights in Latin America. For the quarter, subscription and licensing revenue rose 47% year-over-year to $567.9 million.
Direct operating expenses for fiscal year 2022 amounted to $1.75 billion ($523.1 million for Q4 alone). The company’s expenses underscore “the significant investments we made to launch ViX,” said TelevisaUnivision CFO Carlos Ferriero, along with renewals for “premium regional content” and sports rights.
In terms of ViX’s audience distribution, Davis noted the U.S. has about 60 million U.S. Hispanics, and “slightly less than that are Spanish speakers.” Mexico meanwhile has a total population of around 130 million people.
“When you think about our audience distribution across our two core markets, it’s probably reflective of those proportions,” he added.
As for further ViX expansion in ROLAC, Davis said TelevisaUnivision is looking to hard launch ViX in countries like Colombia, Peru as well as the larger Spanish-speaking countries in Latin America.
“We actually haven’t hard launched anything in the ROLAC countries,” he explained. “Essentially, it’s soft launched because when you launch an app on any of the major platforms and it’s accepted in Mexico, it’s also available in the rest of Spanish-speaking Latin America. But we have yet to do anything from a consumer standpoint to drive that.”
Davis also talked up the benefits ViX brings to Spanish-language advertising. Notably, ViX enables TelevisaUnivision to track new advertisers “that otherwise haven’t been on the television platform.”
“Spanish-language advertising is just so massively underpenetrated relative to the size and economic power of our audience,” he said when talking about the U.S. ad sales market. “The upside we get from continuing to engage ‘the other half’ of the U.S. advertisers not currently advertising in Spanish is a big part of that momentum.”
Consolidated revenue for fiscal year 2022 increased 13% to $4.7 billion. In Q4 alone, revenue rose 22% year-over-year to $1.5 billion, driven by strong World Cup performance and a full quarter of ViX subscription revenue.
Overall advertising revenue went up 10% in Q4 to $849.7 million, comprised of 14% year-over-year growth in the U.S. to reach $494.1 million, and 4% in Mexico to hit $355.6 million. In the U.S., TelevisaUnivision touted record midterm political revenue, while Mexico benefited from World Cup ad sales.