Latin America is still a long way off from the cord-cutting phenomenon that has ripped across the US, but with the expansion of broadband connections in Brazil will come the rise of OTT players – and broadcaster Rede Globo is the latest to join the battle, ahead of the 2016 Olympic Games.
Globo’s VoD platform Globo Play will launch early next week and will initially be an ad-supported service, with the possibility of an SVoD service to come in the future; targeting more than 115 million Brazilians currently connected to the internet.
The multi-device service includes live TV and Globo’s popular titles on-demand – including those telenovelas that are so widely popular across Latin America. Globo Play will also feature a selection of 4K content, such as the drama ‘Merciless’ and mini-series ‘Dangerous Liaisons’.
Globo becomes the first broadcaster in Brazil to roll out a combined live and on-demand platform. In doing so, it will be competing with the likes of Claro TV’s Tele Viva and Net Servicos’ Now Clube – both owned by América Móvil, and available as TV Everywhere services to up to 10 million pay TV customers between them.
Further platforms from MNOs in Brazil feature Telefónica-owned Vivo Play, which could reach its 840,000 customers, DirecTV’s Sky Brazil which offers Sky Online and has around 5.65 million pay TV customers, and Oi also offers pay per view services Clube Oi TV and Oi Filmes to its 887,000 pay TV customers.
Netflix has over 2 million subscribers in Brazil, following its arrival in 2011. Costing around $7 per month, it is priced the same as Now Clube which includes Netmix, designed to be a direct competitor of Netflix, and includes content provided by DLA in Miami, which América Móvil acquired. Statista forecasts Netflix subscribers in Brazil to break 24 million by 2020. Pure-play OTT services include Crunchy Roll, Looke, Crackle, and NetMovies.
Brazil is the market with the highest number of pay TV subscribers in Latin America – our Pay TV in Latin America report shows Brazil’s continent share at 27.1%. This is also a country renowned for the most prolific growth in pay TV consumption, reaching 18 million subscribers at the end of 2013, compared with 16.2 million a year earlier and 12.8 million in December 2011. This is admittedly from a low base, with penetration of 32% still quite low and only half that of neighboring Argentina. But it has come with high ARPU almost 10 times greater than in the two most populous BRIC countries of China and India.
América Móvil is the group with the highest number of recorded pay TV subscribers representing 21.1% of the total, followed in volume by DirecTV, Televisa, Telefónica and Claro TV.
According to our own forecast, Claro TV and DirecTV in Brazil will increase subs from 3.79 million to 5.8 million and 3.8 million to 6.6 million respectively, over the years between the end of 2014 and 2018.
Last year, Globo partnered with Cloudio TV and GLWiZ to launch its international, Portugese-language OTT channel in Europe, on supported platforms such as Roku and various smart TVs. Cloudio TV and GLWiZ provide subscriber and bouquet management, billing systems, dedicated set tops, as well as a plethora of channels.
Carlos Henrique Schroder, Globo’s CEO, said, “We are amplifying our linear programming reach to new devices and viewing occasions, enriching the audience’s experience with our content. With routine changes and new consumption habits, it is a natural course to strengthen our presence across platforms.”
“We are continuously investing in technology, which makes us pioneers in new solutions. This platform has been developed by Globo’s team and the technological infrastructure of daGlobo.com,” explained Raymundo Barros, technology director at Globo.
Rumors around a potential merger of Brazilian telcos Oi and TIM have been circulating as Oi announced Russian group Letter One proposed a possible consolidation of the Brazilian telecom sector involving a combination with TIM Participações. Reportedly, the Russian company is prepared to invest up to $4 billion in Oi, TIM has denied any involvement.
Sao Paulo was host to Futurecom this week, an event covering OTT players, telecom carriers, and broadband access. Brazil’s communications minister, André Figueiredo, suggested the government might not impose taxes on OTT providers, which is a different position compared to former ministers who have indicated that OTTs should pay taxes, which will delight the pay TV industry after previous allegations of double standards.