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Televisa: The lynchpin to a $1BN Univision IPO

Univision Holdings is now formally prepared to go public — a move that promises to be the largest media IPO in more than a decade. One of the reasons for that is its enviably loyal Hispanic viewership and smart content choices.

Hulu adds first premium channel with Showtime

CBS last week said that it would launch a Showtime streaming service through Hulu in early July, making it the first time a premium channel is available on Hulu.

YouTube’s Newswire: making a Twitter tie-up attractive?

Google’s YouTube is launching a real-time video news service called YouTube Newswire. It’s meant to be a direct competitor to the power of other crowd-sourced social news sources, like Twitter, Periscope, Meerkat, Facebook and Instagram. But the real value may lie in pursuing an acquisition strategy to align synergies between YouTube and an existing market-maker.

Media Analysis

OTT to drive last-mile, home network transformation

The day is approaching when over-the-top (OTT) consumption becomes the majority of TV viewing. But the evolution to a new TV marketplace won’t happen without transformations in both service provider and home networking — a transformation that will change the way broadcasters, media companies and brands operate.

Mobile video growth continues, helped by content discovery

As opposed to traditional TV, online video originally was seen as a lean forward experience, one that required users to be more knowledgeable about where they could find the content they wanted to watch.

Content discovery is a key to pay-TV revenue, loyalty

In an effort to stem churn, many North American pay-TV providers are making conscious efforts to improve the overall subscriber experience with new user interfaces being rolled out on set-top boxes, tablets and other mobile devices. According to Digitalsmiths, by making content easier to access, operators can spark greater viewer loyalty.

Media Investment

EU’s Net neutrality move eases path for OTT video

The EU has decided to implement strong Net neutrality rules, as part of an ambitious overhaul of EU telecoms rules in 2016. The move, which will come into effect on 30 April 2016, will have significant impact on the growing over-the-top (OTT) video space.

Icahn exits Netflix, taking almost $1Bn in profits

While Netflix continues to grow both its subscriber base and its footprint, activist investor Carl Icahn has decided to sell his shares in the company — all 1.41 million of them, which were valued at $956.88 million.

Verizon shows how to do pricing wrong

Much has been made of the threat that over-the-top (OTT) services pose to traditional TV service provider models. And that threat has sent incumbents like Verizon and DirecTV scrambling to launch counter-offers in the form of their own streaming offerings, while digging up new revenue streams from home automation and the like. But are they doing that at the cost of grooming their existing customer bases?

Televisa: The lynchpin to a $1BN Univision IPO

Gabriel Miramar-Garcia

Univision Holdings is now formally prepared to go public — a move that promises to be the largest media IPO in more than a decade. One of the reasons for that is its enviably loyal Hispanic viewership and smart content choices.

The broadcaster hired its bankers for the offering in March, but now has filed its S1 registration statement with the Securities and Exchange Commission in the US. The statement didn’t specify how many shares Univision planned to sell, or the price, but analysts say the No. 1 US Spanish-language media company could raise a whopping $1 billion.

If the analysts are right, the company would be valued at $20 billion.

Univision is a fairly diversified media company; it has various 24-hour cable networks, 60 local TV stations, digital and radio offers, and jointly owns Fusion, a millennial-targeting cable channel and digital outlet, with Walt Disney Co.

Univision has one obvious secret to its success in ratings: a close relationship with Mexico’s Grupo Televisa SAB, the world’s largest Spanish-language TV producer. As a result, Univision has snagged exclusive US carriage rights to some of the hottest content around for Hispanic audiences, including telenovelas and futbol rights. This week Univision extended its programme licensing agreement with Television to at least 2030 from its current expiration date of 2020 — which investors should like.

In 2010, Televisa paid $1.2 billion for a 5% equity stake in Univision. So, if an IPO goes through, Televisa would wind up with 22% of the voting rights of Univision’s common stock.  

Investors should also like the fact that the deal also specifies that the royalty rate will be reduced from 11.91% to 11.84% effective January 2015-December 2017; Televisa received $313 million in royalties from the US broadcaster in 2014. Then, it will grow from 16.22% to 16.13% on 1 January 2018 — with other increases to occur thereafter.

“These amendments and the terms of our [memorandum of understanding] underscore the strength of Univision’s relationship with Televisa and the significant and unique benefits of our mutually beneficial partnership,” Univision CEO Randy Falco said in a statement. “By taking these steps and our pursuit of other related initiatives, Univision is in a stronger competitive position going forward. Televisa is the best Spanish-language content producer in the world, and we are pleased to continue to have its support as we enter the next exciting chapter of Univision’s history.”
 
Last year, Univision had takeover talks with Time Warner and CBS, but they came to nothing.