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Viewing report
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Latin American Pay TV Services Markets
Frost & Sullivan, June 2009, Pages: 61
This research provides an analysis of the pay TV services markets in Latin America, covering six main countries: Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. An analysis of the market size, drivers and restraints, a market forecast and a competitive analysis can be found. The study examines the current structure of the industry, analyses competitive factors and reviews major strategic opportunities for success in the market.
The technologies represented are:
- Cable
- DTH
- Multichannel Multipoint Distribution Service (MMDS)
- IPTV
Current Market Status
- Being still at a rising stage, the Latin American pay TV services market presented great growth in 2008.
- Despite the significant growth, pay TV penetration in Latin America is still low and therefore, there is a lot of place to grow.
- The country assessment shows that the main markets are Argentina, Brazil and Mexico. However, a household penetration analysis illustrates a different scenario. Brazil presents the lowest penetration in the region
- Latin American pay TV services markets’ revenues presented significant growth in 2008
- Operators have taken advantage of the triple-play offer in order to boost the telecom services penetration as well as increase the average revenues per unit. Pay TV, being a premium service, has specially benefited from this business model.
- Price and offer flexibility, in terms of content and contract policies, have allowed operators to maintain loyalty and therefore, increase customer wallet share.
Current Market Status - Technologies
- Considering technologies, the Latin American market has typically been dominated by the cable connections.
- However, DTH connections are gaining more market share compared to the other technologies.
- One of the reasons for this behavior is the limitations of the cable network deployments in the Latin American countries due to their particular topology. DTH then offers the possibility of reaching almost every potential end user, especially in the non-urban areas.
- IPTV technology is also expected to gain particular importance as it offers traditional telcos the possibility to offer TV services through their already-deployed broadband network
Current Market Status –DTVPay
- The penetration of DTV services among the current client base in Latin America is already important. The average penetration is 31 percent.
- The country assessment shows that the main markets are Chile, Mexico, and Venezuela. Chile has always been the leading country in the adoption of new technologies in the region, while Venezuela and Mexico show important penetrations of DTH, an already digital service.
- DTV services have gained special value as a key part of the operator’s offers owing not only to its higher quality but to its interactivity possibilities and as a part of innovative business models.
Industry Challenges and Main Trends
- Digitalization is changing the market conditions. Traditional telecom operators have to adjust to the trend of convergence and the emergence of a new digital lifestyle. The focus in the future is not likely to be on the TV service per se, but on the offering of a convergent proposal.
- This new proposal is entirely related to the concept of the connected home, which implies that anything that can be, is eventually likely to be connected through the Internet, based on a total TV/PC convergence.
- This concept is developing quickly worldwide as consumers increasingly wish to access advanced content from anywhere at their homes and distribute this content around the household with complete mobility. The rising demand for IPTV and video-on-demand services is correlated to this growing necessity of advanced entertainment.
- In this scenario end users do not need a network and/or transmission provider anymore. Currently, they need a single provider that can offer them converged services of voice, data, and video.
- The trend of convergence and bundling has expanded remarkably in Latin America. With not only triple-play offers but also quadruple-play offers available in the market, the concept of a unique provider is being addressed. However, pay TV service providers have to acknowledge that DTV is a new media category. This means they have to think of vertical integrations in order to cover the whole value chain of pay TV, enabling themselves to take advantage of the possibilities arising with the digitalization and the connected home, in terms of interactivity, audience segmentation, new applications, and others.
Pay TV Services Market: Market Drivers Ranked in Order of Impact (Latin America), 2009-2014
1) Price promotions and innovative payment options, such as prepaid offers, boosting penetration among medium and low-income strata segments
2) The high level of competition between DTH, cable and IPTV improving the offers available in the market, adding value to the customers
3) Operator’s investments in both DTH licenses and cable networks increasing the geographic coverage, promoting penetration in the non-urban areas
4) DTV services adding value to the regular pay TV services making offers more appealing to the end users
5) The proliferation of triple-play services reducing the regular price of the telecom services
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