Netflix, YouTube lead video services in Brazil
Details
Joseph O'Halloran
| 22 January 2019

Research from IHS Markit examining the state of the video industry in Brazil, the world’s fifth-largest media market, has found that Netflix and YouTube are consistently the first choice of video services, across all devices.

The analyst believes that understanding what’s driving video subscription and consumption behaviours is a crucial step in successfully mapping the future of the country’s content and distribution businesses. IHS Markit says that connected consumers in Brazil are interested in viewing content in non-traditional ways, which will put added pressure on traditional content and distribution systems when the economy recovers.

Collectively, 28% of respondents in the survey say that they turn to the subscription video-on-demand first when looking for something to watch, followed by YouTube at 24%. Almost two-thirds of internet users in Brazil, between the ages of 18 and 64, had access to Netflix, of which 86% claimed to use the service at least once a week.

Netflix and YouTube were consistently the first choice of video services, across all devices even in pay-TV households. When IHS Markit reviewed such homes, fewer than half of Sky Brasil households selected the service as their first choice, and they were less likely to have a first choice, while two-fifths of Net Servicos households responded similarly.

In terms of perceived quality, Netflix and YouTube were significantly ahead of their rival pay TV providers in the following categories: ease of use, flexibility in programme choice, catalogue of content, quality of content and value for the money. Yet despite the vast library of foreign content Netflix has to draw upon, the amount of Brazilian and Portuguese content remains minimal, which is why the company is now partnering with local producers to boost local content in its library.

Along with growth in over-the-top (OTT) content consumption, the installed base of internet-connected devices in Brazil was found to have grown by 10%, rising to more than 310 million devices in 2018. A quarter of respondents have a personal computer connected to their primary TV screens, while 35% claim to mostly use their smart TV apps to access video content on their primary TVs.
Yet on a note of extreme caution, IHS Markit warned that Brazil has been experiencing a significant economic slump in recent years and, like other Latin American markets, Brazil’s legitimate pay-TV and OTT SVOD service providers have seen subscriptions fall or suffer reduced growth. Laptops, tablets, streaming sticks and other devices increasingly pose a threat to cable TV and other traditional TV services.

Another real danger to Brazil’s pay-TV industry says IHS Markit is that people might cut the cord entirely and migrate lower-cost OTT providers. The analyst believes that the results of its survey indicate that this is a distinct possibility, especially given that pay-TV monthly average revenue per user (ARPU) can cost five times or more than the monthly ARPU of Netflix. Subscription sharing also seems to be a profound problem in Brazil.