Guess who has a new rival in Latin America?
Juan Pablo Conti ©RapidTVNews | 02-11-2011 Not a very hard question to answer these days for anyone who has been paying a minimum of attention to recent developments in the Latin American pay-TV sector...
Well done. It wasn't that difficult, was it? Of course it was Netflix. Ever since the OTT player arrived in Latin America a couple of months ago, a raft of local and international competitors have been introducing rival offerings that seem to have somewhat diluted that aura of novelty, uniqueness and feel-good factor that surrounded Netflix.
Joining that growing list of competitors is now a true industry heavyweight: Mexican tycoon Carlos Slim's América Móvil. Claro, the brand name under which the world's fourth-largest mobile phone company operates in several regional markets, will be launching an OTT service in Argentina called Ideas Entretenimiento.
The service won't differ much from what Telecom Argentina (through ArnetPlay), Telefónica (through OnVideo) or even Netflix currently offer there. Like all of these services, Ideas Entretenimiento will use a website as its interface (which users will be able to access from a host of Internet-enabled devices), a video catalogue and a subscription-based payment method.
But there are two peculiarities surrounding this latest OTT announcement that stand out. The first one is that the now confirmed new status of Claro as another player in Argentina's pay-TV market – something that Rapid TV News had predicted as being highly likely – will be met with resistance from the established operators.
Argentine regulation is very explicit in the prohibition it imposes on fixed and mobile telephony companies when it comes to offering subscription-based pay-TV services.
While it was apparent that Claro was working on some sort of video offering (the company itself had acknowledged this), few could have predicted the operator would dare go as far as it did following yesterday's announcement. If Ideas Entretenimiento's two OTT bundles, named Biblioteca Básica (530 video titles for 19 Argentine Pesos a month) and Biblioteca Premium (1,000 titles; 39 Pesos a month) do not qualify as a pay-TV service, then it's difficult to say what does.
Then again, it is true that if Claro were found to be breaking existing legislation so should Telecom Argentina and Telefónica with their respective OTT services.
The second element that is sure to raise eyebrows is the choice of content supplier that Claro made. It selected DLA, a company that, through its substantial ownership of distribution rights, provides premium video channels and video on demand (VOD) services to practically all large and medium-sized pay-TV operators in Latin America.
The problem resides in the fact that DLA is about to become an América Móvil subsidiary. Should that acquisition be given the go-ahead by regulators currently evaluating the agreement, the possibility would exist that DLA might deny reselling its content to América Móvil's competitors. Or that it offers to continue to sell to them, but at inflated prices – which would clearly be interpreted as anticompetitive behaviour.