Pay TV in Latin America - Economic Miracle or another False Dawn

Latin America is in for a pay TV boom lasting least another four years, with total subscriptions growing by 74% from around 35 million in 2010 to 67 million in 2014. This is even more impressive than it sounds when ARPU is factored in, for the actual revenue gain across the region as a whole will be around the same as all of Asia Pacific, including China and India. The Asia Pacific has often been cited as the world’s pay TV hot house. Whereas Latin America is a more coherent market than Asia Pacific, as a whole, with its highly diverse cultures.

ARPU figures are so much higher in Latin America than in either India or China, so we are looking at around $1 billion gain in monthly pay TV revenues sustained between 2010 and 2014 – almost the same as India and China combined. Asia Pacific has been the world’s pay TV hot house in terms of growing subscriber numbers, but in revenue terms Latin America represents a superior, coherent market with common cultural themes.

As Europe and the US crawled out of recession, in 2010, Latin American emerged more rapidly, with Brazil achieving 7.1% growth last year. As a result, suddenly well-off consumers in Latin America are upgrading pay TV options faster than almost any other entertainment service.

Unit Growth will be at a Compound Annual Growth Rate of 15% to 2012, tapering off to 10% by the end of the forecast period late in 2014.

Latin America has certainly been here before. Pay TV arrived in the region during the mid 1990s just as early as in Europe or North America, pioneered by a multitude of local cable operators, and also in some of the countries by MMDS, a forerunner of WiMAX wireless terrestrial broadcasting, delivering services in and around urban areas, extending to moderately remote locations. Such services grew quickly among the relatively small middle class groups during the late 1990s, but suffered from a slump around 2003, and in many cases stalled until 2006 or 2007, picking up then only to be dashed again in 2008 – 2009. A notable exception is Argentina, which sailed through these early storms to become the region’s most mature pay TV market, with as a result much lower growth prospects than the other major countries over the next four years.

Even in Argentina there is scope for increasing ARPU as cable services become predominantly digital, and High Definition ripples through the existing subscriber base. The most exciting countries though for the pay TV industry are the region’s two most populous, Brazil and Mexico, which are on the way to doubling their number of pay TV households from 2010 to 2014, in both cases approaching 20 million by then.

Latin America will continue to exhibit common platform trends across the region despite some clear national differences. Cable TV dominated early pay TV history, with MMDS emerging almost as quickly as an important player in some of the countries, including Brazil, Mexico and Ecuador. This led to a somewhat fragmented and localised pay TV market across the continent, with the exception of Brazil where Net Servicos emerged as a dominant cable TV force. Satellite then came along and with its ability to target huge geographical footprints and deliver some common programming on a pan Latin American basis, with economies of scale, and so cable TV’s progress has been checked, while MMDS as a more direct satellite competitor in more remote areas is in terminal decline. MMDS accounted for 10% of all subscriptions in its heyday early in the 2000s, but had fallen to 2% by 2010 and will dwindle almost to nothing over the next four years. SHOW LESS READ MORE >

Summary

Latin American Technology Trends

The Position of IPTV in Latin America

The ARPU story in Latin America

The Churn story in Latin America

Argentina; Operators chase the high ground

Brazil; breaks away from stop start in Pay TV

Chile; consolidates as IPTV gains ground

Colombia; sees highest IPTV growth

Ecuador; Solid progress from low base

Mexico; Pay TV soars on rebounding economy

Other Countries; IPTV in Central America

Peru; Pay TV subs doubling by 2014

Uruguay; Growth despite high penetration

Venzuela; Recovering from a difficult past

Latin American Operators—The Big Three

Conditional Access Market share

Rewards for Set Top Players in Latin America

Methodology

Diagrams and tables

Pay TV Total Latin America
Leading Latin American ARPU numbers
Operators with Churn over 2.5% a month
Operators with Churn under 1.5% a month
Argentina Total Pay TV subscribers
Argentina Pay TV projections by operator
Argentina Pay TV subs by technology 2010
Argentina Pay TV subs by technology 2014
Brazil Total Pay TV subscribers
Brazil Pay TV projections by operator
Brazil Pay TV subs by technology 2010
Brazil Pay TV subs by technology 2014
Chile Total Pay TV subscribers
Chile Pay TV projections by operator
Chile Pay TV subs by technology 2010
Chile Pay TV subs by technology 2014
Colombia Pay TV subs by technology 2014
Colombia Pay TV subs by technology 2010
Colombia TV projections by operator
Colombia Total Pay TV subscribers
Ecuador Total Pay TV subscribers
Ecuador Pay TV projections by operator
Ecuador Pay TV subs by technology 2010
Ecuador Pay TV subs by technology 2014
Mexico Total Pay TV subscribers
Mexico Pay TV projections by operator
Mexico Pay TV subs by technology 2010
Mexico Pay TV subs by technology 2014
“Other” Total Pay TV subscribers
Peru Total Pay TV subscribers
Peru Pay TV projections by operator
Peru Pay TV subs by technology 2010
Peru Pay TV subs by technology 2014
Uruguay Total Pay TV subscribers
Uruguay Pay TV subs by technology 2010
Uruguay Pay TV subs by technology 2014
Uruguay Pay TV projections by operator
Venezuela Total Pay TV subscribers
Venezuela Pay TV subs by technology 2010
Venezuela Pay TV subs by technology 2014
Venezuela Pay TV projections by operator
Operators with over 250,000 homes growth
Operators with over 50% growth
Conditional Access market share by units 2010
Conditional Access market share by units 2014