Some regions of the global video streaming market are possibly nearing saturation point. However, this is certainly not the case in Latin America, where the industry is currently booming. With its huge potential audience, LATAM is understandably attracting a lot of attention and as the region’s video market continues to evolve, international and local streaming services are working to ensure that they are well positioned to grab their slice of the cake. To maximize their chance of success, video providers need local knowledge, and expertise on the ground.
The potential audience is growing
There have been significant improvements in digital infrastructure in the region in recent years, and this has resulted in an increase in the number of households with fixed broadband. According to analysis carried out by BB Media, fixed broadband in Latin America has increased from 39% of homes in 2017 to 53% in 2022, which is equivalent to approximately 92 million residences. Of those digitally connected households, 86% now have access to at least one streaming service, and around 70% have a Smart TV.
In the past, Pay TV has been commonly used in Latin America but that is showing signs of waning as OTT streaming increases in popularity. Of the total homes in the region, fewer now consume only Pay TV services (15%) than those who opt to only use OTT platforms (21%). Almost a quarter have both Pay TV and OTT services (24%), while 40% still do not subscribe to either. With more and more consumers taking up fixed broadband, the potential audience for streaming services is continuing to grow.
Changing dynamics in the region
Historically, there have been a number of factors that have prevented global streaming services from competing effectively in the LATAM market. Global players struggled to cover locally produced content, and this gave native media sellers an advantage. This has now changed, and we’re seeing global streaming services deliver more and more locally produced content, leaving local players with fewer cards up their sleeves to compete.
Another key factor that has made it more difficult for global platforms to penetrate the market is the need for flexible monetization options. The SVOD model that has worked so well for streaming services in other parts of the world is more challenging in Latin America, in part because subscription costs are a concern amongst large parts of the population.
At the same time, competition between streaming services is fierce and in a bid to stay relevant while increasing affordability, market leaders have launched a war of promotional offers and bonuses. This battle to appeal to price-concerned viewers has enabled most notably AVOD but also FAST to get a foothold in the market. A recent analysis by Statista states that AVOD is now the second most popular platform type after SVOD and that revenue generated from these services is set to nearly double in a five-year period from 2022.
Services such as Pluto TV, Plex, and Roku have significantly contributed to the popularity of ad-supported video in Latin America. This is perhaps most notable with Roku, for which Accedo is a preferred partner in the region, as it has grown to become the number one streaming device in countries such as Chile, Colombia, and Mexico. As the region’s streaming market continues to evolve, AVOD and FAST are both interesting models for video services to leverage in their bid to expand audience reach.
Supporting LATAM customers
As mentioned above, launching and maintaining a video service in a complex market such as Latin America requires understanding of the global video industry, coupled with local knowledge and expertise on the ground. At Accedo, we have had a strong presence in the region for numerous years and we are now expanding this further to help our customers manage the challenges of launching and delivering video services in LATAM. Most recently, we have opened a new office in Sao Paulo, Brazil, where our local team is based. We are also investing in Engineering, Delivery, Design and QA resources to enable local players to maximize development and expansion opportunities in the region.
Accedo has vast OTT expertise and in depth knowledge of the distinctive features that make or break the viewing experience in this market. This, paired with our successful track record locally, puts us in a strong position to empower Latin American video providers to deliver next generation video services.
If you would like to find out how we can support you to grow and evolve your video service, and carve out your share of the LATAM market, please get in touch.
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