Gustavo Fonseca, president of Directv Go, wrote a guest column for ttvnews to share his thoughts about the OTT industry in Latin America.
By Gustavo Fonseca, president, DIRECTV GO
As the digital infrastructure becomes more prevalent, faster and reliable across Latin America, consumer habits are evolving – and will continue to change at a more rapid rate. Latin American households are migrating to over-the-top (OTT) streaming options to satisfy their appetite for entertainment. People across the landscape are embracing the convenience of accessing content across their connected devices when and where they want it. In order to get their attention – and keep it, providers must be willing to try new things and offer differentiating products that stand out in a crowded field of competitors. Those who disrupt – and are best prepared to withstand disruption – will take our industry to the next level.
When it comes to OTT content, consumers have a variety of options and a number of avenues to access what they want. Interestingly, we’ve seen the number of OTT services in Latin America hold steady at around 170 since 2017, following a bevy of new offerings that arrived between 2013 and 2016. Now that internet infrastructure across the region is catching up, another period of significant transformation is brewing across the OTT landscape. This is evidenced by recent moves such as the expansion of Disney+ and Apple TV’s offerings in Latin America, along with advertising-based digital video competitors like Pluto TV and Tubi TV entering the region. Others – like América Móvil and the Brazilian content creation, production and distribution conglomerate Grupo Globo – have also launched their own streaming platforms. At the same time, we’re preparing to introduce HBO Max as yet another streaming option in the region. It’s clear that both consumer interest and access to OTT are growing simultaneously. Just look at
Netflix, for example. It launched its streaming service in Latin America in 2011, saw some modest growth at first, but has really taken off in recent years. In the fourth quarter of 2020, the company reported 37.58 million subscribers across the region.
With 10 million Pay TV subscribers in 10 Latin American countries, Vrio has an interesting perspective on these developments as one of the region’s leading providers of digital entertainment services. Across our markets, we’re experiencing firsthand the growth of OTT options. And it’s something we’ve been preparing for over the last few years. Gradually, we’ve been transforming our strategy to incorporate a greater emphasis on OTT.
Since 2018, in fact, we’ve upped our game with the introduction in the region of DIRECTV GO, the only panregional streaming platform delivering local and international content live and on demand to local customers in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Uruguay. The service is part of Vrio’s regional strategy to respond to consumer demand and further expands its offerings in prepaid and postpaid satellite television to provide access and deliver entertainment and information to audiences in the region.
The rise of streaming options, including ours, has effectively ceded more control to the consumer. With OTT, consumers essentially get to choose from a seemingly endless buffet of menu items and pay for what they want, when they want it. And in our customer-centered industry, here are five ways OTT contenders will separate themselves from OTT pretenders in Latin America in the minds of Latin American consumers:
1. Premium content. Content is king, and that’s not going to change. Whether it’s sports, movies or other original programming, providers who deliver the goods will continuously come out on top.
2. Experience. Customers crave seamless experiences. Providers who deliver smooth interactions and reliable, consistent service will rise above the competition, engendering brand love and loyalty.
3. Distribution. Providers with deep and diverse reach will be positioned to offer the most attractive distribution models to content sources. In turn, these providers will negotiate the most valuable agreements, making them more attractive to consumers.
4. Value. Companies that can bring the content, experience and distribution elements together at competitive costs will get the consumer’s attention and drive scale, which will create opportunities to improve value.
5. Brand. Providers with proven track records of delivering quality service over time will develop brand affinity. Consumers will continue to gravitate to brands they not only recognize, but trust and love. You can never underestimate the value of a strong brand.
Let there be no doubt, the OTT revolution is working its way across Latin America. As broadband connections continue to grow and speeds increase across the landscape, consumers are discovering they have more options than ever to enjoy the entertainment they crave. They’re also learning that streaming opens the door for increased personalization, where providers curate content suggestions based on their personal preferences. It’s both a privilege and a challenge to be a part of this transformational moment for our industry in which all competitors are working hard to define what their added value will be.