For LatAm Operators, OTT is an Opportunity… and a Threat

November 17, 2014 | By More

Latin American pay-TV operators have a growing opportunity to offer video-on-demand or subscription video-on-demand services to compete with – or be complementary to – Netflix in their local markets.

And, with more players coming in, local operators maintain a competitive advantage… if they act to protect it with new services – like TV Everywhere and other over-the-top offerings — that appeal to an evolving market, according to a panel at the NexTV CEO’s Summit, Latin America.

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“It’s ours to lose,” said Mauricio Ramos, president of Liberty Global Latin America, during the panel discussion. “It’s completely ours to lose.”

While Netflix remains a threat to operators, there’s an increasing opportunity for operators willing to go over-the-top with content and take advantage of the ability to go out of their current footprint.

“Cable operators no longer have walls around their technology,” said Tom Wirth, SVP Americas for Nagra. “Now, operators can go out of market… there are no longer boundaries.”

Ramos pointed to new-generation technologies like real-time video, search and aggregation of video and video on demand iterations as examples of where operators could expand services.

By 2018, some 18 million consumers in Latin America will take some sort of subscription video-on-demand service, according to research from Dataxis, with the bulk of the market continuing to belong to Netflix.

Nearly three-quarters (72%) of SVOD subscribers currently use the U.S.-based video aggregator, with about 16% of the market using Claro and 12% using other SVOD services.

Netflix has said that while it expects its business to eventually be 85% international, it also anticipates 85% of the content to be from Hollywood, with just 15% being locally developed.

That, said panelists at the conference, gives local operators an opportunity to take a bigger share of the market, either by offering a complementary service with locally generated content, including sports, or to offer a competing service with international content as well.

The advantage that local pay-TV operators have is an established network and customer base that can support a rapid deployment of either an SVOD or VOD service.

Some of those services may be a la carte services, similar to those being rolled out in the United States by CBS and HBO, giving operators additional opportunities to act as aggregators with more specialized “skinny bundles” that would appeal specifically to local markets and subscribers, as well as outside traditional service footprints.

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Category: COLUMNS

Jim ONeill

About the Author ()

Jim O’Neill has been a business journalist since 1992, and has been writing about the digital media industry since 2007. He formerly was the editor of industry journals FierceIPTV and FierceOnlineVideo, and has worked as an industry analyst for international research firm Parks Associates. He currently is CEO and Editor of theConvergence.tv, a newsletter that takes a deeper look at the trends and happenings in the digital media industry, and continues writing research and white papers on a variety of topics in the sector. He can be reached at jim@theconvergence.tv

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