Televisa and TV Azteca have reduced their advertising sales versus pay television and internet. For the only two television networks in Mexico, it represents a business of about 11.256 million pesos (mp), its main source of income in the area of content. However, their profits for this item are down and analysts do not expect a recovery, compared to other platforms pay ranging in growth.
The advertising market tele open and is on the way I walked in spraying, mainly due to the migration of advertisers to the alternatives offered by pay-TV, says a study by the Latin American Association of Advertising Multicanal, known as LAMAC, which accounts for the decline for nine years.
in its annual report of 2014, Televisa reported that due to the entry into force of the reform of the Regulations of the General Health Law on advertising (May 2014), results in the advertising business were “adversely affected”. In that document, the company said it “can not predict the impact or effect that such reform could continue to have in the operating results in the future.”
However, a more important factor in explaining the decline in sales of advertising open tele factor is that “viewers or market share are going away to pay television or other skills,” he said Expansión telecommunications consultant who requested anonymity.
Since then, the content company in the world’s largest Spanish reported sales declines in this category. In its results for the fourth quarter of 2015, advertising sales fell 11% to 7,687 million, against 8,633 million pesos in the same period of 2014.
Although Televisa acknowledged the impact of the decline in sales, telecommunications specialist, who also asked not to be quoted by name, financial analyst shared with Expand that the company can overcome these effects in the medium or long term, thanks to its other businesses. “As grows IZZI, Televisa will have a source of income that could replace what is lost in advertising sales network television. However, the picture is more complicated for TV Azteca, because you do not have that possibility, “
To TV Azteca, the picture has not been different. During 2015 recorded declines in advertising sales. In the fourth quarter, fell 4.73%, although its most dramatic fall in that year introduced in the second quarter, 16.99% less, which he attributed to the comparison with the income earned during the World Cup Brazil 2014, an event that attracted greater flow of income.
in its annual report of 2014, the network of Ajusco admitted that in the year ended contracts relevant advertising, and by strong competition from Televisa and other media such as radio , spectacular, newspapers, magazines and the Internet, “can not ensure that maintain or improve their participation in the Mexican market for TV advertising in the future.”
So, TV Azteca and Televisa are unable to increase their advertising revenues. Advertisers are migrating to other platforms, including highlights and private television and, of course, internet.
LAMAC reported that during the first ten days of this year -Last available- measurement, open TV rating fell 23%, while pay TV grew 17% in rating and 30% in participation audience.
the agency revealed that Mexicans spend 38 minutes watching television pay the time they spend in front of the open channels. According to LAMAC, “in the last nine years, Mexicans with access to pay TV have increased 192%.”
The pay TV grows
Televisa said in its annual report 2014 sales of advertising on its TV channels pay accounted for 6% of the total in that year. For the first quarter of 2015, the tele restricted meant 6.3% of advertising revenue, an increase of 10% against the same period of 2014.
“The profile of broadcast television goes to low commented telecommunications consultant. One advantage it gives you is that television networks is focused on higher segments. Now, the young, the millennials , no longer watch television. That worries the entire television industry worldwide. Surf when they turn on Youtube and television put Netflix directly. Open TV is losing weight. “
In its Third Statistical Quarterly Report 2015, the sector regulator, the Federal Telecommunications Institute (IFT), noted that the average program rating on TV channels pay rose from 2013 to 2015 and said that “consumption of programs broadcast television channels fell by 15.25% during the same period, which may be related to a substitution effect on consumption of content by type of channel. This is confirmed by increases in penetration levels nationwide pay TV “.
The audience of television networks reached a market share of over 29% in the same period of 2015. Despite consumption joint services open and pay television, TV pay is progressing.
Internet, the other competition
for Gonzalo Rojón, director Analysis of the Competitive Intelligence Unit, advertising is migrating to the Internet. Largely attributes this phenomenon to social networks.
“That participation is declining in traditional media, because not only open television, but radio and print media are seeing a decline in advertising, it is going to the Internet and all platforms that are on the internet “.
advertisers who prefer internet to disseminate their products or services are technology or software companies that” have a focus on youth. For example, Netflix and Spotify “Rojón explains. Although advertising is showing declines in open TV, especially “that does not mean it will disappear from the open and pay television,” said the expert. “We are seeing a slower transformation in Mexico against other countries like the US” .
Rojón distinguishes that in the high socioeconomic levels, content consumption is done immediately. “In Mexico there is still much penetration of broadband and mobile devices. That affects how content is consumed in all ages and in all socioeconomic levels. “
According to LAMAC, penetration of TV pay in Mexican households is 50% in its latest data for 2016. Both pay television services such as internet advertising will continue to grow because “there are going did segments in which they are interested (companies)”.
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