Latin Americans have really plunged into the realm of streaming video. In recent times, this does not mean that audiences in the region are merely subscribing to one of the available platforms, but that they are piling them up. In Brazil and Mexico, each streaming consumer already adopts an average of 2.5 services, according to a survey by Ampere Analysis, a British media consultancy.
No one knows for sure if the stacking of streaming platforms is sustainable, after all consumers who subscribe to three different services may already be spending the same, or even more, than they used to cough up for traditional pay-TV packages. But new market entrants must see the trend as a way to win over customers from leader Netflix. Upcoming Disney+ and HBO Max are vying to be “second choices” initially, and then entice viewers to keep subscribing if they need to choose among platforms.
“The LatAm stacking rate will get closer to the higher levels of Western Europe. So, obviously there’s a lot of growth opportunity for new players entering the market, as consumers are taking more and more services”, says Lottie Towler, senior analyst at Ampere.
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Big international players have been splitting Latin America into Spanish and Portuguese-speaking markets, with platforms operating on both sides of the divide, but adopting different rollout schedules and strategies. Disney+ and HBO Max will launch in the region in late 2020 and 2021, respectively. Although neither firm has disclosed in which Latin American countries they will start operating, they are likely to follow the pattern.
Disney is set to become the second largest platform
According to forecasts made by Digital TV Research, a firm that provides business intelligence for the television industry, Disney+ will be the second-biggest streaming platform in the region in a few years. The consultancy predicts that, by 2025, it will have 31 million subscriptions across Latin American markets – roughly the figure Netflix reached at the end of 2019.
Disney has been very successful in the countries where it has started so far. Partly because it is a brand with global appeal and partly because it has been very good at pre-selling, getting subscriptions up before the launch of services. We think that Disney+ will have a very fast take-up in Latin America and that Brazil will be its third-largest market
Simon Murray, principal analyst at Digital TV Research .
HBO’s current subscription base is an advantage in Latin America
HBO Max, the new platform by AT&T’s WarnerMedia, has made the region a priority in its plans for international expansion, as LABS anticipated. It will land only in 2021, but Latin America will present its first pools of foreign subscribers outside the US.
Digital TV Research predicts that in the next five years it will add 2.2 million users on top of its base of current subscriptions – viewers of both pay-TV and on-demand service HBO Go that may end up migrating to the new platform at a discount or at no additional cost. Last November, John Stankey, COO at AT&T, revealed that HBO reported 10 million clients in the region. In that case, HBO Max may be in a fight for third place with Amazon Prime Video.
The battle for new users will increasingly be fought outside the U.S. But expanding in international markets, where 80% of Netflix’s recent growth is coming from, is comparatively more expensive because content needs to be tailored for different cultural tastes.
HBO has an advantage in Latin America, in terms of an addressable user base at the start. A good part of current HBO subscribers may transition to HBO Max. They’re aiming for a large portion of the international subscribers, so LatAm is definitely an important market for them
Lottie Towler, senior analyst at Ampere Analysis
In the U.S. launch, HBO’s price has called attention. Available at $15 a month, it is charging viewers more than Disney+ ($7), Netflix’s basic plan ($9) and Amazon Prime ($13). That may be a risky business strategy, particularly in more price-sensitive emerging markets. But, in terms of libraries of content, Max’s only rival capable of enticing subscribers at the same level, is indeed Disney.
Disney and HBO are offering vast content libraries
With 500 films and 7,500 episodes of television from Walt Disney Studios, Pixar, Marvel, Star Wars, National Geographic, and more, Disney+ is the exclusive home for some of the world’s most famous stories as well as a robust slate of original content. HBO Max also offers new originals and 10,000 hours of content including its branded service, together with titles past and present from Warner Bros.’ 100-year collection, as well as from DC, CNN, TNT, TBS, Cartoon Network, Crunchyroll, among others.
As for the stacking of streaming services, users may start looking for specialized platforms – such as DAZN‘s sports-focused offering – or free, ad-based ones – like YouTube TV and ViacomCBS’ Pluto – or even those which are handed as an extra benefit of a premium telecom or linear-TV subscription.
How many subscriptions can homes or people watch? I think that’s quite an interesting point. I would say three or four for most people. Some services offer exclusivity, as far as sports are concerned
SIMON MURRAY, PRINCIPAL ANALYST AT DIGITAL TV RESEARCH .
Anyway, this argument points to one conclusion: all big services will compete hard and cross swords to be the “standard”, non-disposable platform for as many subscribers as possible.
Streaming wars, indeed.
