Latin America is an attractive market for pay-TV services due to its sheer size and the rising wealth of its population. The region is expected to have 77 million subscribers by 2024, according to Digital TV Research. With the 2017 recession behind the region, operators are looking for new growth areas and maintaining their competitive edge.

Of course, OTT video and streaming services have been disruptors across Latin America. Since launching in the region in 2011, Netflix accounts for 36% of SVOD subscribers today. And when combined with Amazon Prime Video, the two main OTT stakeholders will account for 91% of Latin American paying SVOD subscribers by the end of 2023, according the 2019 IABM Regional Report on Latin America.

OTT video also presents opportunities to deliver programming to viewers that might not otherwise be available, particularly sports, such as the Copa America tournament, which included live streaming from DirecTV sports and Telemundo Deportes En Vivo.  Telemundo also was one of the official Spanish-language broadcasters for the Women’s World Cup and live streamed the matches on TelemundoDeportes.com and on Telemundo Deportes – where seven matches were aired exclusively on the app.

Interdependence between traditional and OTT providers

While the leading OTT video providers are changing the dynamics in the industry, they also understand the value of working with local players. For instance, Netflix announced a multi-year partnership with Telefónica to integrate the Netflix app into Telefónica’s set-top boxes, and make it accessible from the Movistar Play Video OTT service. IPTV provider TotalPlay was the first operator in Mexico to integrate Netflix into its pay-TV platform and Uruguay’s Antel promoted an introductory offer for a six-month subscription of Netflix on its platform. 

In some countries, Netflix, and its U.S.-produced content, has become somewhat of a status symbol for the mid- to upper-class. And in some instances, this also includes U.S. cable programming, like CNN and ESPN. As in other regional markets, it behooves traditional and OTT service providers to seek partnerships to increase overall competitiveness.

The interdependence between traditional and emerging operator runs deeper in Latin America, mainly due to content creation. Many of the major pay-TV provider groups also produce or own original content, like Claro, Televisa and Globo. With the increasing demand for more TV fiction original programming, the costs – and risks – have also increased. 

Therefore, we are seeing collaboration, or co-opetition, with different players to help share the costs and risks. In Argentina, TNT and Cablevisión co-produced “The Cockfighter” and equitably shared the distribution rights. It has been reported that Televisa has rented out its studio space to Netflix, as well as co-produced programs with Amazon Prime Video. According to The Hollywood Reporter, Netflix plans to produce 50 new TV series and movies in Mexico over the next two years, the most for any one territory. This underscores how service providers of all types are adapting to market conditions to be successful.

Infrastructure realities

More aspects of market conditions are the infrastructure realities and regulatory issues across the region. While there are strides in different countries to improve broadband and wireless networks, many challenges stand in the way. 

Smaller regional internet service providers (ISPs) have been leading the expansion of fixed broadband in Brazil, where they have been responsible for nearly half of the newly laid fiber in the country as reported by telecom regulator Anatel. Yet they face “critical operational hurdles” which include high prices to use utility poles from power companies, high taxes, and restricted access to credit to help finance broadband expansion.

At the same time, mobile broadband subscriptions already outnumber fixed broadband subscriptions by a ratio of more than five to one, according to the International Telecommunication Union (ITU) from 2017. The potential of 5G services is making headlines, and some pilot projects have been announced, but most countries are delaying launches and taking a “wait-and-see” approach. Regulators and government bodies have not taken on subsidizing this infrastructure build out, like we’ve seen in other developing countries like China and less developed countries in Europe, such as Albania and Bulgaria.

The question becomes, what can operators do now to maintain their competitive edge and gain new subscribers? The answer comes from embracing the opportunities and technologies as they exist today. And that means operators need find ways to deliver OTT services with less-than-ideal network conditions. 

Facebook is an interesting example. The company recently announced a partnership with local players, including Telefónica, to create the Internet para Todos (IpT) Peru, a project to form an open access wholesale rural mobile infrastructure operator. The goal is to enable any mobile operator in Peru to use IpT’s 3G and 4G infrastructure to deliver retail mobile services. 

At VisualOn, we are finding that operators – large and small – don’t necessarily have the experience in-house to navigate through all the infrastructure challenges. They look to partners like us to help them develop a super-efficient video streaming platform – with added functionality that makes the experience “as good as linear.” 

We help operators address low latency issues through our video player solutions and figure out how to serve subscriber segments with features like image-based subtitles. We also provide our User Experience Monitor (UEM) to allow for real-time monitoring and troubleshooting to ensure the most reliable video delivery and best viewer experience.

Telefónica is one example of us having solved many OTT video streaming issues to ensure a high-quality experience for their subscribers in Latin America. Our OnStream MediaPlayer+ Video Framework deployed on Android and iOS supports enables Telefónica to smoothly add more services in the apps, such as Download Manager, which enables consumers to download and watch content offline as well as use MPEG-DASH for expanded cross-platform interoperability.

We are also working on an initiative to reduce the demand on network infrastructure for streaming video, allowing smooth playback without rebuffering or frame drops in challenging network conditions.

We’d love to see how we can help you achieve success with your OTT video streaming service in Latin America.