Premium OTT primed for LATAM success


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Joseph O'Halloran

| 10 February 2016




Research from Vindica and Ooyala is predicting strong growth ahead for premium over-the-top (OTT) services in Argentina, Brazil and Mexico.



The enterprise-class subscription billing firm, online video, analytics and advertising technology provider found that in these key Latin American markets, major pay-TV providers and regional media groups are investing in services tailored to local tastes, increasing consumer awareness and paving the way for significant market growth through to 2018.

The Prospects for Premium OTT in Latin America report found that Industry participants across the region expect key markets to roughly double in size between 2015 and 2018, from $45 million to $115 million in Argentina, $180 million to $460 million in Brazil, and from $240 million to $450 million in Mexico.

“Premium OTT in Latin America has developed relatively slowly, despite Netflix’s strong presence in the region, but strong local players are now gearing up to grow the OTT market. There is considerable headroom for growth, especially at lower price points,” said Jon Watts, managing partner at MTM, which conducted the survey.

Yet despite these reasons for optimism, the survey also found that there were a number of substantial potential gating factors. Lack of local content was one key factor, but it was observed that throughout Latin America, strong local FTA and pay-TV providers continued to invest heavily in local content production, premium rights and new services and have substantial market power and strong consumer relationships. Linear TV viewing was still growing and many consumers appear satisfied with existing TV offerings.

The report also said that even though Netflix and other international players could plug the gap in local content there was a bigger issue in terms of poor widespread broadband infrastructure which could seriously affect quality of streaming video. MTM noted that there are only ten to 15 fixed-line broadband subscriptions per 100 inhabitants in the major Latin American countries, compared to 30-35 in Canada and the US.

High levels of piracy within the region were also cited as a potential issue. The survey showed that industry participants in Latin America were open about the spread and acceptance of online pirated content, with recent studies suggesting that roughly half of Latin American Internet users access pirated content. Complexities around payment is perceived as a major barrier to premium OTT take-up in Latin America.

“There’s no question Latin American viewers will take to streaming content like the rest of the world,” commented Caitlin Spaan, senior vice president of marketing for Ooyala. “For example, local industry participants expect niche services to proliferate across the region, suggesting that by 2018, there could be up to 40 providers of specialist services with more than 50,000 subscribers in Mexico, up to 20 in Brazil and up to 15 in Argentina. The most attractive and lucrative niches are expected to be in children’s programming and sports – especially soccer – with specialty film, music, religion and lifestyle closely following.”