Driven by value-added services such as HD and video-on-demand (VOD), the Latin American pay-TV market is expected to continue its pattern of growth following the rise in direct-to-home (DTH) subscriptions.
renatoFrost & Sullivan's Latin America Pay-TV Services Market report predicts subscriptions will near 90 million by 2019, a growth of over 60%. The report says that the market earned revenues of $20.43 billion in 2013 and estimates this will reach $30.91 billion in 2019. By that time, the number of subscribers in the region will touch 86.1 million from 55.9 million in 2013, hitting a household penetration rate of 57.9%.
"As customers increasingly expect higher video quality and content diversity, Latin American operators are expanding the line-up of HD channels at affordable prices," said Frost & Sullivan's information and communication technologies industry manager, Renato Pasquini. "While some companies have already packed their portfolios with HD channels, others are speeding up the transition from standard-definition to HD to boost incremental revenues per user."
Operators are looking to combine voice, data, video and mobile services in bundles to lower service costs for their customers. However, the heavy taxes levied on pay-TV services, especially in Brazil, and the low returns on network deployments in remote areas and small cities challenge operators' ability to offer convergent services.
Following the analysis, VOD is likely to become one of the main ways to consume video. The over-the-top (OTT) segment, though not currently a threat for traditional operators, may eat into the market share of pay-TV services depending on the quality of broadband offerings.
"In a bid to combat this, IPTV and a considerable number of cable TV providers will include VOD services on their set-top box by 2019," noted Pasquini. "The ensuing competition among cable TV, DTH and IPTV operators, especially in Brazil, Chile, Colombia and Mexico, will improve the availability and quality of services, add value to service offerings, and enhance price points."
