These global media companies come armed with knowledge and strategies developed from previous media wars in the United States and Europe. They’re aware that early market footholds translate into user adoption and difficult-to-dislodge market share. They also understand that the future of television will be streamed.
Legacy media companies in Latin America need to begin transitioning to over-the-top (OTT) distribution to maintain their market share. Do nothing, and legacy companies face complete market abdication.
Battle Lines in the Latin American Streaming Wars
Streaming services are pushing pay-for-television services, such as cable and satellite, to the brink in many countries worldwide. Latin America will be no exception.
Latin American Streaming Market Today
The Latin American market had at least 54 million SVOD subscribers in 2020, according to Statista. This was a 36% increase in streaming subscribers over 2019. However, those numbers merely represent the opening salvos of the streaming wars. The region is projected to have 110 million OTT television subscribers by 2024. In the same Statista report, Latin American SVOD revenues are projected to reach $3.7 billion in 2020 and $6.4 billion by 2025 – primarily driven by Brazil and Mexico.
Platform inundation and competition are already heating up. Argentina, Brazil, and Mexico already have over 40 different streaming services for customers to choose from.
Brazil and Mexico are particularly ripe for securing market share. The SVOD market reached $1.4 billion in Brazil in 2020. Mexico SVOD snagged $868 million. By 2025, Brazil is projected to see an 85% growth rate of $2.6 billion, and Mexico with a 230% growth rate of $2 billion. Both streaming markets are large enough for media incumbents to make worthwhile investments. It’s also early enough in the Latin American streaming wars – given these numbers are a drop in the bucket compared to the overall $52 billion global streaming market – to carve out and secure market space.
Latin American Streaming Market Trends
Digital TV Research predicts that – left unchecked by national and regional television and media companies – Netflix, Apple TV+, Disney+, Amazon Prime Video, and HBO Max will corner over 90% of Latin American SVOD subscriptions by 2026. Netflix is already dominant, with 75% of Latin American OTT market share in 2019. Interestingly, only approximately one-third of Latin American broadband subscribers are currently Netflix customers. The time to strike for Latin American media companies is now – while broadband expands.
According to Dataxis, SVOD in Mexico is expected to grow by over 230% in the next four years up to $2 billion annually. Brazil will see a more modest 85% growth ratio. This represents an equivalent market growth of $1.2 billion given Brazil’s larger market size in 2020.
How LatAm Media Incumbents Can Carve Out OTT Market Share
The United States’ streaming wars have demonstrated that media incumbents and television companies can fight back against third-party streaming services. If they move into the OTT market late, however, they face a hard road. Latin companies can succeed by learning from the mistakes of OTT companies in the U.S. who stumbled out of the gates.
There are three things incumbent media companies can do to secure their market position in the Latin American streaming landscape.
Invest in OTT Infrastructure
Latin America is still largely in play for OTT services because broadband is not yet as widely available as it is in the U.S. and European markets. Due to various regulations, infrastructure capabilities, and payment systems, different countries and regions of Latin America will continue to see different rates of OTT adoption. This offers regional media companies a potential head start over international conglomerates because they may already be embedded in regions with low rates of OTT adoption.
OTT is inevitable once broadband infrastructure is in place. Regional media and television companies can develop and invest in delivery services now – even if broadband is not yet ubiquitous in particular countries.
Content is Still King in Streaming
WarnerMedia (HBO Max), NBCU (Peacock), and ViacomCBS (Paramount+) have pounced on the opportunity to bring their legacy TV brands to Latin America to chip away at Netflix’s and Amazon Prime’s hegemonic positions. However, global brands are not the only ones capable of achieving this.
Research shows that local programming remains popular in Latin America OTT markets compared to original content that’s distributed globally. This presents a unique opportunity for homegrown media companies. It’s also the perfect time to secure digital licensing to Latin-based entertainment archives – shoring up a large, homegrown library of content. Deep catalogs of popular Latin-based content offer Latin-based companies a way to secure and grow their SVOD services. Regional and culturally focused Latin entertainment is an asset.
Incumbent media services can open their programming vaults and migrate legacy assets to SVOD or AVOD before investing heavily in new programming. Using existing media will help build market share quickly and earn revenue that can then be reinvested in new programming or media ventures.
Additional Streaming Success Factors
Content is always key to streaming success, but user experience (UX) is not far behind.
Designing culturally distinct, Latino-influenced interfaces, such as these great mobile app examples, may help create a more convenient experience for customers than the one-size-fits-all, universal designs global conglomerates often promote.
Moreover, designing apps that work on a popular, universal, and affordable streaming device such as Roku, is a must. Roku, for example, is investing heavily in bolstering uptake in the Latin American market. You could provide Roku-branded streaming devices to customers as an affordable subscription incentive for your Latin-focused SVOD service.
Perhaps the greatest asset for Latin American media companies is their knowledge of local banking and regulation systems. Almost all international SVOD companies require credit cards to sign up for their services. This prerequisite stymies SVOD market penetration in countries lacking adequate credit card adoption rates. Creating apps and services that accept MercadoLibre, cryptocurrency, or other local and regionally accessible payment methods could help LatAm incumbents fuel their market share.
Latin American Streaming Wars Leave Room for Market Share
Some LatAm media companies may be uniquely positioned to carve out their own distinct OTT markets due to regional differences in broadband adoption, culturally distinct programming, and payment systems.
Latin American-based OTT consultants can be hired to help develop user-friendly, universal streaming apps for your Latin-focused content.
Launching or expanding your direct-to-consumer video service? Contact us today to learn more about securing your Latin American OTT market share.
