Regional focus

DTH in Latin America

believes the fact that Latin

America has a more
youthful demographic
profile than many other
more established TV
The World Cup and Olympic Games will drive much TV
markets will drive more
growth in Latin America, but the region has much more
demand for more
going for it than those two events. Dave Adams reports
interactive TV services
on how the main satellite operators are responding to
over the next decade.
these developments
This is a reasonable,
broad summary of what
ts probably fair to say that for many years
Regional trends, local dynamics
is happening across LatAm, but of course the
Latin America was not a top priority for
Satellite will be important not just because it can
picture is complicated. Brazil, Mexico, Colombia
many in the international TV industry,
be the best way to get TV signals to households in
and almost certainly Argentina, despite adverse
distracted instead by the bright lights of the
some regions, but also because of the growth in
economic and political factors in play at present,
long established TV markets in Europe,
demand for video and other media distribution
will all be important, complex and quite different
North America and Asia; and by other
services, driven by greater smartphone
markets in their own right within this picture.
emerging markets elsewhere.
penetration. Dolores Martos, vice-president sales
This is a region which is very much in our
But in recent years that has changed. TV
for Latin America and the Caribbean at SES,
focus, says Steven Soenens, vice-president,
services are evolving and gathering new viewers
quickly across the region. The DTH market there
will grow from 22 million in 2012 to 40 million in
2017; and then 46 million in 2022, according to a
study published by Northern Sky Research (NSR)
in late 2013.
Over the next five years LatAm will be the
fastest growing region in the world for DTH
subscriptions and revenue. NSR predicts the most
significant growth will be in basic packages, from
18 million today to 34 million, while premium
subscriptions increase from around two million to
almost eight million by 2022. A majority of those
subscriptions will come in the latter part of this
period, as basic subscribers upgrade to HD-led,
higher ARPU generating services. Overall
subscription revenue is expected to rise from just
under $4 billion in 2012 to about $12 billion in
2022. Premium package will then account for 27%
of that figure ($3.25 billion), up from 16% and
$626 million today.
These predictions complement the findings
of a 2013 Digital TV Research study which
predicted a rapid rise in digital TV penetration in
Latin America, from 32% in 2012 to 45% today,
with DTH satellite subscribers again accounting
for much of this growth. It predicted DTH
household numbers would rise by almost 19
million between 2012 and 2018.
In the shorter term, it is clear that the 2014
football World Cup and the 2016 Olympics, both
of which will be held in Brazil, will also stimulate
some development.

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Regional focus
product management, at Newtec. Three years
ago there were 3,500 channels in Latin America
and three years from now there will be 5,000
channels. A lot of that content will be HD.
While in some cases incumbent providers have
a tight grip, many new entrants, particularly from
the telco sector, are starting to enjoy some
success in attracting triple play subscriptions. The
growth of services has been particularly
impressive in Brazil, where Sky, Vivo, Claro, GVT
and Oi are all active in the DTH sector. In
January 2014, Star One, a subsidiary of Embratel,
announced it will launch another new satellite,
C-4, which will have 48 Ku band transponders, to
increase Claros capacity for Brazil and compete
for DTH services across LatAm.
SES has responded to growing demand for
capacity by deploying its AMC-3 satellite to 67
degrees West, where it and AMC-4 now serve
Mexico, Central America and the Caribbean, with
28 Ku-band transponders. In June 2013 it
launched SES-6, in part to help Brazilian operator
Oi increase its DTH HD subscriber base.
Eutelsat has announced that it will launch a
new satellite to serve DTH markets in LatinAm in
2016, with ten 54MHz transponders to cover
western Brazil, 24 36MHz KU band transponders
to cover the Manaus region of Brazil and other
Spanish-speaking areas of the Caribbean and
LatAm; and 24 Ka band spot beams for the
largest urban and suburban populations in Brazil
and in major cities on the Pacific coast.
Intelsat has also announced forthcoming
launches, of Intelsat 30/DLA-1 and Intelsat 31/
DLA-2, in 2015. Each will carry a dedicated
payload for DirecTV Latin America, providing

Three years ago

there were 3,500
channels in Latin
America and three
years from now there
will be 5,000
channels. A lot of that
content will be HD.

new capacity and in-orbit redundancy, says

Carmen Gonzlez-Sanfeliu, regional vicepresident for Latin America and the Caribbean.
We are also providing significant expansion to
the Sky Brasil DTH platform with the Intelsat 32e
satellite, scheduled for launch in 2016. This will
carry the Sky B-1 payload, giving Sky Brasil the
opportunity for additional growth and redundancy
from 43 degrees West.
She also highlights growth in demand from the
companys other media customers for video
distribution services. Many of our media
customers are emphasising the development of
local content as well as providing individual
content feeds, such as feeds for each country
instead of a single feed for an entire region. This
is driving a change in distribution requirements.
Satellite remains a piece of this distribution
network, but fibre will play a role in delivering
single-country feeds that may be distributed by a
single DTH operator or large content aggregator.
Media companies will need to partner with

satellite operators who can provide capacity for

their current programming demands and also
grow capacity as channel bouquets expand.
Brazil is the most complex market in the
region. The shape of the TV landscape is still
dictated to some degree by the actions of Globo,
but cable operator NET is also making major
investments in its networks and OTT players
such as Netflix are starting to have an impact.
Adriana Whiteley, an associate at Farncombe,
says that although cable is still very strong in
Brazil, satellite is growing quickly, by targeting the
emerging middle classes who have not been well
served by pay TV providers in the past. She notes
that these customers are often also open to the
idea of becoming triple play subscribers. Satellite
is also making inroads in parts of the country
where free to air TV is available, but reception is
poor and digital TV switchover is still some way
off (a deadline to make the switchover before the
2016 Olympics has been extended to 2018).
Gonzlez-Sanfeliu quotes Dataxis figures
suggesting that there were over 12 million HD
subscriptions in Latin America in October 2013,
60.2% of which were in Brazil. There is a solid
HD market in the region, especially in Argentina,
Brazil, Chile, Colombia, Mexico, Peru and
Venezuela, she says. Most HD channels in the
region belong to pay TV platforms and HD
content continues to be a strong differentiator in

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March-April 2014

23

Regional focus

Paolo Bona / Shutterstock.com

the battle for subscribers.

But there are other factors to bear in mind.
Whiteley notes in particular the impact of
government stipulations that a certain amount of
each TV package must contain local free to air
channels, suggesting that complying with this
demand has affected some operators strategies in
recent years.
Mexico is seen as an exciting market by many
in the TV industry, as its market is being
deregulated to open up competition. Dolores
Martos highlights healthy growth in DTH there,
despite the strength of the incumbent cable TV
providers. DTH has been making inroads, she
says. We think that by 2017 DTH penetration in
Mexico will reach about 80 per cent.
Argentina may be the most dysfunctional of
the Latin American markets at present, largely
due to the government removing some content
from some operators. Whiteley wonders if one
consequence of the current situation may be a
weakening of the previously dominant cable
operators that works to the advantage of DTH
satellite operators. Because of the crisis at the
moment its unlikely that there will be heavy
investment in the cable infrastructure, so satellite
may get stronger and get more of an advantage,

We expect
[UHD/4K] to begin
making an impact in
LatAm in 2016.
she says, adding that its easier to cover a country
with satellite than it is to take fibre everywhere.
Elsewhere, Colombia is another healthy,
growing market, for both cable and DTH satellite,
with telcos again among its leading lights.
The sports effect
The World Cup and the Olympics have
undoubtedly helped to stimulate many of these
developments and may also see some
experimentation with more cutting edge
technologies such as 4k.
All of this success, in my view, is not a
consequence of the World Cup and the Olympics
it was already happening, notes Bart Van
Utterbeeck, general manager Newtec America do
Sul. But broadcasters use these large sporting

LatAm DTH at a glance

2012

2022

Overall DTH subs

Basic packages
Premium subscriptions
Subscription revenue
Premium package %

22 million
18 million
2 million
$4 billion
$626m (16%)

46 million
34 million
8 million
$12 billion
3.25bn (27%)

LatAm TV at a glance
Digital TV penetration
HD subscriptions

45%
12 million (60.2% of these in Brazil)

Source: Various; CSI

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events to invest in new technologies. On the

consumer side these big events are often drivers
for people to invest in new TV sets and packages.
This time round we may see people buying new
HD and 4k TV sets.
He believes there will be a bright future for the
higher quality image services in this region.
Service providers have to compete on the quality
of their offering, the quality of their image, he
says. I do believe we will see some 4k
experiments and HD services. While he thinks
some of the most well established operators are at
least as likely to lead in this space as are the
newer entrants, he notes that an operator like Oi,
for example, does possess the valuable advantage
of being able to launch HD services without
having to worry about legacy equipment.
Intelsats Gonzlez-Sanfeliu also highlights
Intelsats joint demonstration, with Intelsat, BT,
Ericsson, Sony and Newtec of a 4k end-to-end
video transmission over satellite during IBC2013.
That marked the first time a full multi-camera
production of a sporting event was captured in
UHD and transmitted live internationally via
satellite and fibre, says Gonzlez-Sanfeliu. We
expect [UHD/4K] to begin making an impact in
LatAm in 2016.
Itzik Wulcan, CEO at NovelSat, reports work
underway with its customers to ensure 4k
equipment is ready for the World Cup this
summer. Dolores Martos also says a number of
SES customers are planning 4k transmissions
during the World Cup. And Newtecs Steven
Soenens is also optimistic about the future of 4K,
although he thinks the rate at which operators
make the necessary infrastructure and set top box
investments will be slowed by existing equipment.
Room for growth
Some problems remain. Piracy is an issue in
many of these markets, particularly Brazil, so
there will always be a requirement for solutions
resilient to withstand the threats it may pose.
And there is no sign yet of the kinds of hybrid
OTT/operator offerings seen in other markets,
which could have a significant influence on this
market in future, as could further demands for
other internet-based services.
But what does seem to be the case at present,
says Martos, is that even if all trends for pay
TV subscriptions are upwards in this region at
present, there is still much more room for further
growth. There is still a lot more to be done,
she says.