Televisa’s Emilio Azcárraga Jean


PREMIUM: Emilio Azcárraga Jean, Televisa’s chairman of the board, president and CEO, tells World Screen about the company’s plans for the lucrative U.S. Hispanic market, the group’s production and distribution businesses, and its continued investment in cable, Sky, broadband and OTT.

WS: What is your strategy for Univision and Televisa in the U.S. Hispanic market? The FCC allowed Televisa to increase its equity stake in Univision to up to 49 percent.
AZCÁRRAGA: For Televisa, the U.S. is a growth market with serious potential. The U.S. Hispanic market has a combined purchasing power of $1.3 trillion per year and growing. With the help of our content, Univision has positioned itself as the top broadcast network for the 57 million Hispanics living in the U.S. And in the last quarter the joint work between Televisa and Univision has paid off with great content and soaring ratings. So, as we have done this year, we will explore new ways to ensure both companies keep working together with a very focused strategy.

Regarding the FCC authorization that we received in January of this year, we have not made a decision yet, but without a doubt, it was very well received.

WS: Tell us about the appointment of Isaac Lee as chief of content for Televisa and Univision. How are development and production of content being aligned between the two companies?
AZCÁRRAGA: Televisa is a major shareholder in Univision, so it makes sense for us to combine executive functions where possible and tap into the best talent from both companies. Also, tailoring programming for Univision and Televisa has helped us tremendously ratings-wise. For instance, we did a joint production and airing of Premios Juventud (Youth Awards) with very high marks audience-wise for this simulcast in both Mexico and in the U.S. Actually, in the U.S. it was the best-rated Spanish-language program during the first week of July.

These are exciting times for content creators and consumers alike. Together, Televisa and Univision are pursuing the best content possible for our audiences.

WS: What elements were considered when you chose to focus on series with modern stories, fewer episodes and faster narratives?
AZCÁRRAGA: Data was very important. We conducted extensive audience research in four major U.S. cities—Chicago, Los Angeles, Miami and New York—to learn which themes might resonate both with U.S. Hispanics and [viewers] in Mexico. We researched what our audiences wanted.

We discovered that even though sometimes there is common ground, younger audiences want faster-paced and more dynamic storylines. But many viewers still want the classic telenovela. So while data is important, we also have to study trends and audiences to program our content at the right time and on the correct platform: broadcast, pay TV or OTT.

WS: What results have these series garnered on Televisa and Univision?
AZCÁRRAGA: We are very happy with the information Nielsen has reported for our content in Mexico and the U.S. In Mexico, we increased our ratings during the first half of 2017 by 37 percent. And we are leading across the board: news, novelas, series and sports. Furthermore, in the Copa Confederaciones—where soccer matches aired on many channels—we also led the ratings.

In the U.S., Univision is doing a superb job. In some cases, Univision is even beating out ratings on the major English-language broadcast networks. And we are happy to be part of such success. Our production Vino el Amor, a series about wine country that was shot both in Mexico and Napa Valley, was the most-watched program on Spanish-language TV in the U.S. Another one of our shows, La Doble Vida de Estela Carrillo, which revolves around identity theft, has done very well. La Piloto, a series that tells the story of a flight attendant who gets involved with the drug underworld, but later repents and helps the police, has also been at the top of ratings.

WS: Will you continue to develop and produce the classic novela?
AZCÁRRAGA: The novela continues to be one of the most successful and profitable formats in the entertainment world. It’s a [genre] that forges a strong emotional connection with the audience. The demand for novelas remains huge. But the novelas needed a facelift, a modern twist. We have inserted storylines that resonate across borders, such as the struggles of migrants, and empowered our female characters with careers and ambitions that are as dynamic as their love lives. So far these changes are working.

WS: What plans do you have for Televisa Internacional and expanding Televisa’s presence beyond Mexico and Latin America?
AZCÁRRAGA: We export our content to more than 50 countries. Our series and novelas do very well overseas—consumers in countries as diverse as South Korea, Turkey, Greece and Portugal all enjoy them. We plan to increase this presence and have named Jose Bastón, the former head of content in Mexico, to oversee this new and revamped area. We will also continue to forge alliances with major media partners globally—this results in cost savings as well as more diverse content and wider distribution. For instance, just to mention one, we have a joint venture with Lionsgate called Pantelion. Through this JV we have had great success at the box office, both in the U.S. and in Latin America. One of our latest releases, How to Be a Latin Lover, was the top box-office draw in its U.S. weekend debut in April.

Televisa is also presiding over the Ibero-American Telecommunications Organization (OTI). This organization brings together 31 companies, ranging from AT&T and Telemundo in the U.S. to Argentina’s Clarín and Spain’s Telefónica and Prisa. Executives from these companies meet twice a year to discuss new business and technology advances, as well as the ever-changing media and digital news landscape. In OTI, we also work very closely with the Inter-American Human Rights Commission to foster freedom of speech in the 22 countries where OTI members operate.

WS: Given the devaluation of the Mexican peso, how has Televisa had to contain its costs? In what areas will Televisa continue to invest?
AZCÁRRAGA: We were certainly cautious going into the year as the peso plummeted against the U.S. dollar due to global economic uncertainty. We held off on buying some equipment at the start of the year that’s priced in U.S. dollars, for example. But we opted to maintain our $1 billion capital expenditure plan for 2017, in spite of the peso’s depreciation during the first half of the year. The bulk of our annual capital expenditure—$550 million—is destined for our cable business, which has been a growth driver for the company.

In terms of containing costs, we are consolidating leadership functions, reviewing “exclusivity” payments to acting talent and being more cautious on the scripts that we acquire. We will also have a leaner and more efficient production structure.

WS: How are viewers consuming television and content in Mexico? Which are the most popular platforms: linear channels, on demand, online, OTT services and mobile? Where do you see the most growth potential?
AZCÁRRAGA: Government surveys and Nielsen reports show that linear TV channels are still the most popular in Mexico, in particular, Televisa’s over-the-air channels, Las Estrellas (Channel 2) and Channel 5. Even households with pay-TV systems largely watch, by far, our free-to-air channels. However, we are preparing to face the challenges that the digital world will bring to Mexico. Therefore, we are investing heavily in all our other platforms: cable, DTH, broadband and OTT. For instance, 60 percent of Mexicans with a smartphone have a Televisa app to view television, sports or news. For more context, Televisa’s telecommunications unit accounted for 54 percent of all our revenue last year, versus just 4 percent in 2000.

WS: How has blim been received beyond Mexico and how is it competing with Netflix, Clarovideo, Crackle and the arrival of Amazon Prime Video?
AZCÁRRAGA: Our OTT service, blim, launched in early 2016, and quickly rose to become the second-most-watched OTT platform in Mexico after Netflix, according to the Competitive Intelligence Unit, a Mexico-based telecom research firm. Outside of Mexico, blim has been well-received in major Latin American markets such as Argentina and Colombia.

WS: I understand blim has been producing original productions. Are any of these shows having a second window on any Televisa channels?
AZCÁRRAGA: blim has several original productions, such as Nosotros los Guapos, 40y20, Sincronía, 13 esposas de Wilson Fernández and Blue Demon, among others. Nosotros los Guapos and 40y20 have also aired on Televisa’s free-TV channels. Other series such as Blue Demon have only aired a short preview on our broadcast channels, to promote subscriptions on our OTT platform.

We are still exploring what and where is the best way to program our content: sometimes we will start on the OTT, other times on pay TV and sometimes on broadcast channels where we have the biggest audience. Many factors come into play, so we are evaluating where to air shows on a case-by-case basis.

WS: What future developments do you foresee following the Instituto Federal de Telecomunicaciones’ (IFT) ruling that Televisa holds a dominant position in Mexico’s pay-TV market?
AZCÁRRAGA: Regulatory matters are always complicated but the ruling that the IFT made stated that in 2014 we had a dominant position. I believe the IFT is evaluating whether this stands as of now (2017) and in any case, there is a judicial review underway so I would rather not speculate about it.

WS: You will be receiving the International Emmy Directorate Award. What does this recognition mean to you personally, but also to Televisa and the position it has earned in the international media industry?
AZCÁRRAGA: I am honored to receive this award, which I also view as a recognition of the importance of Spanish-speaking content and the consumers that we serve.

Television dissolved the borders between the U.S. and Mexico a long time ago. Technology has allowed us to connect, to share our values and to get to know each other better as friends, partners and neighbors. Our countries are more than public policies that come and go—history brings us together, and geography unites us. This recognition is proof that if we continue working to grow together, we can develop a promising shared future.

I thank the Academy for this award and I look forward to greeting my industry peers at the awards ceremony.