Most Latin American territories are experiencing a surge in digital television penetration, according to a new report from Digital TV Research. According to the report, less than a quarter of TV households received digital signals at the end of 2010, though this was up from only 16.5% a year earlier.
By 2016, the report forecasts that 71%. or 93 million, of the region’s TV households will have digital TV. This will be three times the number at the end of 2010.
Report author Simon Murray says: “Many Latin American economies (notably Brazil) are booming, which results in a growing middle class. Between 2010 and 2016, 11 million more TV households will be added in the region. One notable exception is Venezuela, where the government has introduced restrictions on foreign currency transfers, which has led to overseas investment stagnation in the TV sector.”
“After years of over-regulation, governments are liberalizing the pay-TV sector. This has led to lower prices and greater consumer choice, not only for TV channels but also with bundles. It has also paved the way for greater foreign investment. Three multinational groups (Claro/America Movil/Telmex, DirecTV/Sky, and Telefonica) have established operations in many territories.”
Despite the rapid conversion, digital TV will still have plenty of room for growth for some time to come. There will still be 38 million analogue TV homes (29% of the total) by the end of 2016, though this will be 64 million down on the 102 million in 2006. More than half the TV households in Peru and Venezuela will still be analogue by 2016. Brazil will grow from 13.4 million digital homes at end-2010 to 45.3 million by end-2016, though 17.7 million will still be analogue.
Of the 64 million digital homes to be added between 2010 and 2016, 33 million will come from DTT. Cable and pay DTH will add 13 million each, with pay IPTV supplying a further 5 million.
So pay TV penetration will rise, but not as dramatically as digital TV penetration. Pay-TV penetration will reach 46% by 2016, up from 30% at end- 2010. However, this does mean 23 million more pay-TV homes. Argentina will record 77% pay-TV penetration by 2016, but Brazil will be at the other end of the scale at 33%.
Pay-TV revenues in Latin America will be $7 billion higher in 2016 ($17.3 billion) than in 2010. No prizes for guessing that Brazil ($6.9 billion) will be the top contributor, followed by Mexico ($4.0 billion) and Argentina (S$2.6 billion).
DTH will remain the main source of pay-TV revenues; more than doubling to $11 billion by 2016. The number of pay DTH homes will climb by a similar proportion to 26 million. Brazil will be the largest country by DTH subscribers, but penetration will be highest in Mexico (32%) followed by Chile (26%).
The number of homes paying for IPTV will take off from a very low based to reach 5.5 million by 2016 – or 4.2% of TV households. IPTV penetration will be highest in Chile and Colombia by 2016, at 6% each. IPTV revenues will reach $752 million by 2016, up from only $45 million in 2010.
Murray said: “Cable TV is not going to add much traction. This is mainly because analogue subs will not necessarily upgrade to digital cable, but may defect to other digital platforms – including DTT.”
There will be 28 million cable homes by 2016, up from 23 million at end-2010. However, cable penetration will be 21% by 2016, from 19% at end-2010.
The good news for cable operators is that the number of digital subs will triple over the same period, although the analogue total will halve. Digital cable penetration will be highest in Argentina by 2016, when a third of homes will subscribe. Another 23% of Argentine TV households will still receive analogue cable signals by 2016.
Cable TV revenues will increase by only 13% between 2010 and 2016 to $5.7 billion. Digital cable TV revenues will climb by $2.3 billion during this period to $3.8 billion, with analogue cable TV falling from $3.5 billion to $1.9 billion.
Most Latin American countries are slowly rolling out the ISDB-T standard for DTT, usually with the support of the Japanese government. However, the speed of conversion is about to accelerate, from 8.4 million homes (7.0%) at end-2010 to 41.1 million (31.3%) by 2016. Brazil will provide 26.8 million of the 2016 total.
Analogue terrestrial signals will still be received in 22% of TV households (29 million) by 2016, though this is well down on the 62% (74 million) recorded at end-2010. Peru will still have more than half its TV households taking ATT signals by 2016.