Source: Ponsulak/Getty Images/iStockphoto

Mexico's Steamy Soap Operas Lose out to Netflix, Snapchat

  • Televisa ratings down 24% this year; Azteca’s drop 8%
  • Even edgy new shows don’t guarantee viewers will come back

Mexicans are switching off their TV sets at an unprecedented rate, bruising shares of Grupo Televisa SAB and TV Azteca SAB, as more viewers opt for digital entertainment following the government’s moves to make internet access more accessible.

Year-to-date, Televisa’s broadcast ratings are down 24 percent and Azteca’s have slid 8 percent, according to Itau BBA analyst Gregorio Tomassi, citing data from HR Ratings Media. That follows declines of 16 percent and 14 percent for the two networks last year. The steepest drops are in telenovelas -- the pulpy serial dramas for which both networks are famous -- and nightly news.

Both companies are producing edgier new shows they predict will bring audiences back, but the advent of Netflix and online streaming services like HBO are proving to be a serious challenge. TV Azteca’s new show, “The Iron Prosecutor” debuted in January to replace its hit crime drama “Rosario Tijeras.” The critically acclaimed new series, based on a true story, follows a female prosecutor as she looks for justice after the murder of her father -- hardly the stuff of classic telenovelas. But the program only cracked HR Ratings Media’s list of top five prime-time shows for a single week.

Mexico’s 2013 telecommunications reform bill may be part of the problem for the broadcasters, said Geetha Ranganathan, an analyst at Bloomberg Intelligence. The regulatory overhaul forced phone giant America Movil SAB to open its network to more competition, helping drive down prices for broadband data and mobile internet access. Wireless data lines have more than doubled since the end of 2013, to almost 75 million, giving many more Mexicans regular access to Snapchat, Facebook and other alternatives to TV.

“The reform is forcing broadcasters to look over their shoulders,” Ranganathan said.

While Mexico’s benchmark IPC index hit a record earlier this year, Televisa has come nowhere close to its peak in 2015, and Azteca’s glory years were in 2011 and 2012. Televisa shares are up 4.5 percent this year, compared with a 7 percent gain with the IPC, while Azteca is down 9.2 percent.

Televisa and TV Azteca declined to comment.

Television ratings in Mexico can be difficult to track because there isn’t much public information available, and viewership can vary from year to year because most telenovelas only air for a single season, not over multiple years as programs do in the U.S.

The drop in viewership has hindered Televisa’s comeback from a disastrous attempt two years ago to change its advertising pricing policies. The world’s largest Spanish-language broadcaster fell back into a sales slump in the first quarter, failing to build on momentum from the end of last year and dashing hopes for a sustained recovery.

Univision Holdings Inc., the U.S. Spanish-language broadcaster in which Televisa holds a stake and supplies programming, has also been struggling in the ratings.

Late last year, Televisa hired Millie Carrasquillo, a veteran of U.S. Hispanic television at Univision and Telemundo, to revamp its prime-time offerings, shedding some cliche soap operas favored by older generations and developing new, fresher content. Isaac Lee, who was overseeing content at Univision, became chief content officer at Televisa and Univision in January. Jose Baston, who had overseen Televisa’s content, was moved to international distribution. Televisa also overhauled its news division last year, replacing longtime evening host Joaquin Lopez Doriga with journalist Denise Maerker, the first woman to anchor the nightly news.

The company is telling investors to hang in there, Ranganathan said. “They’re saying to not really expect anything to happen until 2018. It’s going to take some time” for the changes in programming to show results, she said.

Drama, Drama, Drama

Televisa appears to have been recovering some ground against Azteca this year, especially with telenovelas and movies, Tomassi said in his note.

“This is encouraging for Televisa, but it is still too early to arrive at a statistically confident view on how this trend might relate to relative revenue performance,” he said. “We prefer to err on the conservative side and keep assuming that Televisa will continue losing revenue share this year and over the next few years.”

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE