LatAm Supp LatAm | Page 22

Research offering third party OTT, most of the players are Millicom branches but also TIM Brazil among others. Both groups have 591m connections, representing 86% of the total. With the rise of LTE and the extended base of smartphones, mobile actors LatAm were not associated to a traditional Pay-TV operation or an OTT offer. However, this target group handled only 46m of lines representing 6.7% of the total. are the ideal partner for OTT. Furthermore, mobile companies can solve billing and collection problems which hinder the adoption of OTT in LatAm. OTT remain an effective way to access the video business for mobile actors. Dataxis quarterly tracks 170 mobile actors and 79 are linked to traditional Pay-TV operation. This group owns 59% of the mobile market, much less than the group of mobile actors associated with OTT. For the third quarter of 2017, 78 mobile operators in Revenues from OTT TV episodes and movies for 19 Latin American countries will grow by $4 billion (€3.45bn) to $6.43 billion in 2023; up from the $2.47 billion recorded in 2017, according to analyst firm Digital TV Research. The firm’s Latin America OTT TV & Video Forecasts report suggests that the top five countries will generate $5.32 billion in revenues by 2023 – or 83% of the regional total. SVoD will remain the region’s largest OTT revenue source; contributing $4.42 billion by 2023. Analyst: LatAm OTT revenue up $4bn Source: Digital TV Research 22 LATAM Briefing “We forecast 48.24 million SVoD subscribers by 2023; more than double from the 21.14 million recorded at end-2017,” advised Simon Murray, principal analyst at Digital TV Research. By 2023, 28.4 per cent of the region’s TV households will pay for an SVoD package, up from 13.2 per cent by end-2017.” “Puerto Rico (53.5 per cent) and Mexico (51.8 per cent) will have the highest penetration by 2023. These two countries are the only ones in the region where Amazon Prime operates.” Benefiting from the availability of Amazon Prime, Mexico will become the SVoD subscriber leader in 2019 despite having 60% of the population of Brazil. Mexico will account for 36% of the region’s “Given its continuing economic and social problems, Brazil lost one million pay-TV subscribers between 2015 and 2017,” advised Simon Murray, principal analyst at Digital TV Research. “Its peak year of 2014 will not be bettered until 2023.” “Mexico recorded impressive growth in 2016, but its pay-TV subscriber count fell in 2017. It will continue to decline until a slow recovery starts in 2020. The 2023 total will be just under the 2016 peak. However, it’s not all bad news as Claro and Telefónica will enter Argentina and Mexico, although this is likely to involve OTT.” Mexico overtook Brazil in 2016 to become Latin SVoD subs by 2023, with Brazil bringing in a further 27%. Netflix, Amazon Prime Video, Blim, Movistar Play, Claro Video, Crackle and HBO will together account for 91% of the region’s paying SVoD subscribers by end-2023. Netflix will remain the largest pan-regional SVoD platform by some distance, with an expected 23.99m paying subscribers in 2023 – or half the region’s total (down from a two-thirds share in 2017). America’s largest pay-TV market, despite Brazil having twice as many TV households as Mexico. Brazil has been losing subscribers since November 2014. However, Brazil will regain top slot in 2023 – just. Pay-TV revenues in Latin America [subscriptions and PPV] will grow by only 1.0% between 2017 and 2023 to $19.74 billion.Revenues will fall in 2017, 2018 and 2019 before a slow recovery begins. Brazil ($7.01 billion in 2023) will remain the top country by pay-TV revenues by some distance, followed by Mexico ($2.49 billion) and Argentina ($2.49 billion). Brazilian subscription rates are much higher than Mexican ones. Brazil’s 2023 total will be lower than 2017 and the peak year of 2014. Two operators dominate pay-TV in Latin America. Claro/América Móvil had 13.91m pay-TV subscribers (down by 500,000 on the previous year) by end-2017 and DirecTV/Sky had 21.31m. These two companies accounted for nearly half of the region’s pay-TV subs by end-2017. Analyst: LatAm pay-TV decelerates Although the economic recession waned somewhat in 2017, the Latin American pay- TV sector was still affected. According to the eighth edition of the Latin America Pay-TV Forecasts report from Digital TV Research, the number of pay-TV subscribers was flat year-on-year. Fewer than 5m additional pay-TV subscribers are expected between 2017 and 2023 – bringing the total to almost 76m. Pay-TV penetration will not climb beyond the current 44% of TV households.