Telefónica studies the entry of an industrial partner in Movistar+

Telefónica is seriously analyzing the search for an industrial partner for Movistar+ without, for now, having transpired conversations with the possible candidates. As the Economist of sources familiar with the situation, the telecom company has been thinking about the future of its television business for several years and everything points to a change of course being planned: the possible incorporation into the capital of the company Telefónica Audiovisual Digital (Movistar+) of a company with a solid presence and recognized prestige in audiovisual matters and communication. Telefónica sources declined to make any statements in this regard.

With the eventual arrival of a new travel companion at Movistar+, Telefónica will explore new operational efficiencies, with higher value of your assets. The decision, pending the approval of the teleco council and with no deadlines in sight, would come to replicate other actions already undertaken by the group in other subsidiaries, including the recent divestments in fiber networks in Latin America or telephony infrastructure with Telxius.

Movistar+’s valuation will be one of the keys to finding a partner, as well as the percentage of capital that Telefónica could be willing to sell. Excluding the contracting of external channels, Movistar has two of its own channels (the general channel Cero and the sports channel Vamos), in addition to the thematic channels resulting from the purchase of rights, such as Movistar Liga, Movistar Sport, Movistar Cinema or Bulls, among others. The rights to the League and the Champions League form part of the assets, as well as those related to the in-house production of television series. As other convergent telecommunications operators also do, Telefónica acquires channels already produced from third parties that do not require transformation. But, unlike its rivals, Movistar+ acquires audiovisual rights that it later produces and uses to create its own channels. Among the former are dozens of providers, among them those of the DAZN platforms (football, basketball and motor), as well as Netflix and Disney + (series and cinema). Telefónica shares a 50/50 partnership with Atresmedia in Buendía Estudios, announced two years ago with the aim of promoting creation, talent and content in Spanish.

Movistar+ will celebrate its seventh anniversary next summer, a birth that occurred after the National Commission for Markets and Competition (CNMC) authorized the sale of Canal+ to Telefónica. Since July 2015, the entire capital of Movistar+ belongs to Telefónica. According to data from 2020, the company has 753 workers and expenses in salaries and wages of 43.4 million, which gives an average per capita of 57,600 euros per year per employee. Results for 2002 amounted to a profit of 74.157 million euros, with operating expenses of 93.5 million euros and supplies of 1,925 million euros. Among other magnitudes, operating income in 2020 amounted to 2,184 million euros and payments to the treasury in corporate taxes amounted to 20.8 million in 2020

Telefónica’s pay television platform is the cornerstone of the Spanish subsidiary in Fusión’s commercial offer, as it is the main attraction for attracting and retaining customers, due to its differential offer compared to other competitors. Movistar+’s contribution is reflected in the number of convergent customers of the operator in Spain, with more than 4.6 million Fusión subscribers. The average revenue per client and month (arpu) of Telefónica Spain stands at 89.6 euros, according to data from the end of September 2021. This figure reflects an increase of 2.5% compared to the second quarter of 2021, largely part due to the push of the new football season.

In September 2016, Telefónica announced investments of 70 million annually in production of series with the Movistar label, with the development then of twenty fiction projects. With this cinematographic offensive, Telefónica intended to become the “main hub for the production of fiction series in Spanish worldwide”, in addition to differentiating itself from the rest of its rivals.

Televisa and Univision Alliance

The recent alliance between Grupo Televisa and Univision Holdings may be a source of inspiration for Telefónica in its possible future plans for Movistar+. The Mexican media group, a leader in Spanish, plans to accelerate synergies with an audiovisual platform and also a content provider. In fact, the complementarity of Televisa and Univisión is presumed to be frictionless, with entertainment content, own production and distribution of open, pay, digital and streaming TV. The content catalog of the two companies exceeds 300,000 hours, volume that places the consortium as the most relevant in Spanish in the world.