An Insider Look at Pay Television in Latin America

The pay television industry in Latin America is nuanced and growing — a landscape ripe with opportunity for media companies with the savvy to navigate it.

Interestingly, however, the big broadcast media companies who traditionally hold large market shares in the United States are a step behind local industry players in Latin America. Those local companies have a boots-on-the-ground perspective of customer demand and cultural variations across Latin American countries — one that their North American counterparts lack.

As pay television grows increasingly geo-targeted in Latin America, U.S. media companies persevere in their attempts to gain market share, and streaming technologies continue to alter viewing behavior worldwide, how will the Latin American market evolve and change? How can media companies best position themselves to win in the area?

We took a look at Stream’s expert call transcript library to find out what a former NBCU International executive had to say.

Quick Takeaways

• Latin America is not a homogenous market — it’s an umbrella for a diverse set of cultures and paid television consumer preferences.
• Streaming has been slower to take hold across Latin America mainly due to simpler preferences (news and soccer) and income barriers to streaming subscriptions.
• Future trends to watch in paid television include the continued bleeding of cultural preferences across borders as well as the arrival of alternative media (like Facebook and YouTube) to the mainstream broadcast market.

The “dynamic, diverse” broadcasting landscape of Latin America

Latin America is like a . . . fruit salad? That’s the metaphor this NBCU executive used to explain how diverse the region is and how savvy media companies need to be in order to deliver on the wide range of preferences across national borders.

“That’s what Latin America is, not a fruit shake or a milkshake. Not taking the fruits and mixing them all together, which is often one of the biggest challenges that we have to overcome when you work in the region, is that people seem to think that Latin America’s all the same . . . When you look at a fruit salad that each country has its flavors, its intricacies, its challenges. We all speak Spanish, but every country has its idiosyncrasies.”

Fruit references aside, the takeaway here is clear: Latin America is not one big customer segment. It’s an umbrella under which many countries and unique cultures and consumer preferences exist.

It’s also fast changing.

“Anyone in Latin America that plans more than a year ahead has got to be ready to go back and redo whatever they did because it will not hold true.”

This is due in large part to a roller coaster of political and economic issues, as well as continued changes in the market as companies merge and sell. Industry giants Televisa and Univision are set to merge in the near future. U.S. media conglomerates like Viacom and Discovery are buying local channels as a safer, faster way to break into the nuanced market.

For the most part, we learned, service delivery has largely improved amidst all of the market action over the past several years.

“The media industry has evolved significantly in Latin America over the last 10 years . . . I think that they [broadcast media companies] all have done a very good job in positioning themselves in geo-targeting as much as, obviously, the technology of pay television allows you to geo-target if you want to compare it to social media. . . . Today, you know that the feed that any one of these media companies is feeding into Argentina is a different feed than the one they’re feeding into Mexico. It’s definitely a different feed than the one they’re feeding into Brazil and a different feed than the one they’re sending to Colombia. From a marketing perspective,

Streaming slower to take hold in Latin American markets

Streaming is making much slower inways into the TV viewing market in Latin America than it has in U.S. and European markets so far. We learned that this is likely due to two main factors: simpler viewing preferences and an income barrier to purchasing streaming subscriptions.

“In Latin America, what [people] are really most interested in is news and their sports. In Latin America, we’re going to talk about soccer. As long as they’re getting that for free, that’s what really that community, that segment of population, they feel like they’re being served.”

Movies and TV series are considered more of a luxury than a priority viewing choice. This former NBCU exec doesn’t expect streamers to see much ARPU growth in the near future.

That said, streaming certainly isn’t absent from the Latin American market. In fact, it saw a 36% increase in streaming subscribers between 2019 and 2020. The main industry players like Netflix, Hulu, Apple TV+, and Disney+ are all making headway in the marker. This growth has so far been driven by demand concentrated in specific countries like Mexico and Brazil.

The key here seems to lie in the ability to partner with local media companies to democratize streaming access at a price point that’s realistic for larger Latin American populations.

Future trends to watch

We also uncovered a few interesting trends in the industry that will be important to watch in Latin America (and also in any media market around the world).

One impact streaming platforms are having on viewing behavior is a bleeding over of culture preferences. On Netflix, for example, Spanish TV series Money Heist took off in the United States. We found in the expert call transcript that the trend is likely to continue.

“The world is getting smaller . . . today, what technology has done is that it doesn’t matter what language you produce the content. It’s about the quality of the content. It’s about the script . . . Kudos to Netflix from that standpoint because I think they were definitely the one that stepped out of that comfort zone and started to acquire content from other parts of the world and bringing it into other regions and testing the waters. I think it’s been fantastic. I think that trend will definitely continue.”

And what about alternative types of viewing content — Twitch, YouTube, Facebook and the like?

While so far they haven’t replaced TV content — even in younger generations — there is interesting activity on the market to watch.

“[It’s interesting how] the Facebooks of the world or the YouTubes of the world [are] going out there and buying out sports rights. Who would have thought that 10 years ago that the Facebooks and the YouTubes of the world are now going head-to-head with the broadcasters for getting the sports rights to major leagues? I think that’s also something that we have to keep an eye on.”

In Latin America, where soccer is a cornerstone of viewing behavior and shared culture, that’s certainly no small rising trend.

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