Latin America. The restricted TV market in the Latin American region is characterized by an upward trend in its hiring, in terms of subscriptions, for the vast majority of member countries.
Among the main factors that explain this trajectory are the packaging of services, the (still incipient) competition with internet video on demand (OTT) platforms, the affordability of satellite service and the low level of adoption registered in some of the countries, such as Peru and Colombia.
The set of the main economies of the region (Argentina, Brazil, Chile, Colombia, Mexico and Peru) accounted for a total of subscriptions to the service of 59.5 million at the end of 2018, equivalent to an annual increase of 0.8%.
In 2018, the analyzed markets that registered the highest number of subscribers were Mexico and Brazil, with 21.0 and 17.6 million, respectively. However, these countries did not record the highest annual growth in terms of user base. The markets with the lowest level of contracting between households or low levels of pay TV adoption reach the highest growth coefficients in the comparison between 2018 and the previous year.
Restricted TV Subscriptions, Top Markets
Among the countries with the highest growth, the case of Peru stands out, registering an annual growth of 9.4%. This market boasts a pay-TV adoption rate per household far removed from its structural ceiling.
For its part, in all the countries of the region, the packaging of services has become a tool that allows the creation of attractive and affordable offers for the final consumer that has encouraged the contracting of the service. Such is the case of Argentina, where the provision of services packaged in triple or even quadruple play has detonated economies in prices to the final consumer that counteract the effect of inflation in terms of attraction and capture of users.
In contrast, Brazil is the only one of the countries analyzed that registers a decrease in the subscription base, with a fall of 2.9% per year. This is partly explained by the upward variation in prices and the incessant growth of OTT platforms, the main competition for pay-TV providers. Additionally, the recession cycles facing the country have suppressed demand for the service in recent years.
In general terms, in the main markets of the region there is a dynamic of sustained growth in Pay TELEVISION subscriptions, driven mainly by convergent service offerings that allow the generation of baskets with diverse services at a lower price and greater added value for end consumers. However, the increasing competition the service faces with OTT platforms could reverse this trend in the future.
Text written by Santiago Yunes of The Competitive Intelligence Unit.
