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Frost & Sullivan: Latin American Pay TV Services Market - Key Trends and Forecasts until 2017


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The increasing demand for value-added services, for high-definition line-ups and for interactive services using a ultra broadband connection are changing the competitive landscape in the pay TV services market in Latin America. This briefing will investigate key technology and subscription type trends, as well as show how service providers are developing strategies to seize the opportunities in the market, defend from over-the-top competitors and generate new revenues sources.

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Frost & Sullivan: Latin American Pay TV Services Market - Key Trends and Forecasts until 2017

  1. 1. Latin American Pay TV Services Market: Key Trends and Forecasts until 2017 Guilherme Faggion, Research Associate Telecom Services August 30, 2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenter Guilherme Faggion Research Associate Frost & Sullivan São Paulo, Brazil Specialties: Pay TV Broadband Fixed VoIP Multiple play Over-the-top 2
  3. 3. Focus Points 1 Market Overview 2 Forecasts 3 The Last Word 3
  4. 4. Market Overview
  5. 5. The battle between Cable TV providers and DIRECTV continues,while Telcos have adopted a hybrid Cable TV/DTH approach. Venezuela Company Technology Subscribers Mexico DIRECTV DTH 1.2 M Company Technology Subscribers Inter Cable/DTH** 0.7 M DIRECTV* DTH 3.8 M NetUNO Cable 0.2 M Megacable Cable 2.0 M Share Top-3 68.0% Dish DTH 1.9 M Share Top-3 65.5% Brazil Colombia Company Technology Subscribers Company Technology Subscribers AMX DTH/Cable 7.0 M AMX Cable 1.8 M DIRECTV DTH 3.8 M UNE Cable/IPTV 1.2 M Telefónica DTH/IPTV 0.4 M DIRECTV DTH 0.4 M Share Top-3 88.0% Share Top-3 85.8% Argentina Chile Company Technology Subscribers Company Technology Subscribers Cablevisión Cable 3.3 M VTR Cable 0.9 M DIRECTV DTH 1.5 M AMX DTH/IPTV 0.4 M Supercanal Cable 0.5 M Telefónica DTH 0.4 M Share Top-3 66.8% Share Top-3 82.5% Note: The base year is 2011. All figures are rounded.*Joint Venture with Televisa **Partnership with Tú Ves in 2012 Source: Frost & Sullivan analysis 5
  6. 6. The main drivers for growth are competition, which is likely to reduce market concentration, and bundles. Pay TV Services Market: Key Market Drivers and Restraints, Latin America, 2012-2017 Competition among Cable TV, DTH, and Increase in service Value-added IPTV operators DTV and HDTV services adoption due to bundles Increased geographicDrivers Drivers coverageRestraints Restraints Expensive content Long period of Forbiddance for Over-the-top payback for DTH incumbent Telcos Lower competition in remote areas Denotes current impact Denotes long-term impact Source: Frost & Sullivan analysis 6
  7. 7. New trends will also drive the market bursting mobilityand personalization to Pay TV services.New services are key to new revenues... However, they demand new commercialization methods MOBILITY BROADBAND Broadband 3G/4G IPTV mVoIP VoD MULTIMEDIA Bundles CDN Mobility Multimedia Mobile Content Mobile TV TV everywhere Source: Frost & Sullivan analysis 7
  8. 8. Video-on-Demand and TV Everywhere are examples ofmobility being used by Programmers and Pay TV providers. • Muu is an online platform where the subscribers can enjoy video content from Globosat at any moment and place using a VoD platform. • Launched by Globosat, Muu service is available just for pay TV subscribers from NET and CTBC (Brazilian service providers). • In Argentina, Red Intercable offers it service Dibox through a partnership with Moviecity Play. • This offering has the purpose of decreasing churn rates and can be a competitive service against other larger cable TV operator. • ESPN Play, Turner and HBO are expected to join the platform in the short-term. Source: Frost & Sullivan analysis 8
  9. 9. Over-the-top offerings are being launched by Telcos whenunable to offer pay TV or as an add-on by service providers. Over-the-top offerings by Telcos and Pay TV stakeholders, Latin America, June 2012 Competitor Argentina Argentina Argentina Brazil Brazil Mexico Countries Brand Launch date Oct/2011 Apr/2011 Nov/2011 Feb/2012 Aug/2011 Sep/2011 Subscribers 11,000* 30,000 n/a n/a n/a n/a in Dec/2011 > 2,500 > 3,000 530 to > 2,000 >3,000 Content n/a titles titles 1,000 titles hours titles Cost per $4.60 to $10.70 $9.30 $9.30 $8.00 Freemium month $8.40 • Only • Only • Only • Only • Only • Only clients clients clients clients NET’s clients Restrictions • Speed > • Speed > • Speed > • Speed > Cable TV • Speed > 3Mbps 1Mbps 1Mbps 2Mbps clients 500Kbps PCs and PCs and Screens Multiscreen PCs Multiscreen Multiscreen TV sets TV sets Source: Frost & Sullivan analysis 9
  10. 10. Forecasts
  11. 11. Prepaid and basic plans will help market growth, but willreduce the ARPS. Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 11
  12. 12. Although Brazil is the largest Pay TV market in Latin America,the penetration rate is the lowest in the 6 largest economies. Household penetration , Latin America, 2011 Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 12
  13. 13. This scenario is likely to change until 2017, when Brazilwill achieve a share of subscribers of 46.1%. Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 13
  14. 14. This growth will put Brazil in the same penetration rate levelof its peers, except for Argentina, the most developed market. Household penetration , Latin America, 2017 Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 14
  15. 15. IPTV, which has been a trend for a while, will now become areal alternative technology for high-value users. Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 15
  16. 16. With the growth of DTH, IPTV and the digitalization of cablenetworks, DTV and HDTV will represent 88.7% of subscriptions. Note: The base year is 2011. All figures are rounded. Source: Frost & Sullivan analysis 16
  17. 17. The Last Word
  18. 18. The Last Word – 3 Pay TV Major Predictions in Latin America DTH will continue to be the main technology driving growth in pay TV 1 services in Latin America, accounting for 54.5 percent of subscribers in 2017, or 44.1 million subscribers. IPTV is likely to reach 3.2 million subscribers in 2017, which will be fueled 2 by new entrants in all markets, by community operators offerings in Argentina, and by the elimination of Telco restrictions in Brazil and Mexico. With the growth of DTH and IPTV, which are 100.0 percent digital, and the 3 continued digitalization of cable networks, DTV+HDTV is expected to reach a 88.7 percent subscriber penetration at 31.3 percent HDTV. Source: Frost & Sullivan analysis 18
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  22. 22. For Additional InformationFrancesca ValenteCorporate CommunicationsLatin 22