Satellite leads the Latin American pay TV charge

After a slow start, digital TV penetration is about to rocket in Latin America – from less than a third of homes at end-2012 to nearly 45% by end-2013 and onto 84% by 2018, according to a new report from Digital TV Research. To put it another way, 100 million digital TV households (in the 19 countries covered in the Digital TV Latin America report) will be added between 2011 and 2018 to take the total to 134 million.

Latin America TV households by platform (million)

                   2008   2012   2013   2018
                  -----  -----  -----  -----
ATT               99.83  78.69  61.69  14.87
FTA DTT            0.95   9.53  21.58  58.89
FTA digital DTH    1.44   1.83   1.91   2.10
Pay DTH            6.77  25.15  30.24  44.06
Pay IPTV           0.01   0.67   1.26   5.73
Digital cable TV   3.18   8.91  11.23  23.27
Analog cable TV   21.21  20.16  19.51  11.52

Source: Digital TV Research

Simon Murray, Principal Analyst at Digital TV Research, said: “Much of this growth is being driven by satellite TV, especially lower-cost and prepaid packages. Nearly 19 million pay DTH households will be added between 2012 and 2018, with 5 million more in 2013 alone.”

Murray continued: “Cable operators have been slow to react to the benefits of digital TV and bundles – and the immediate threat posed after a DTH platform launches. However, this attitude is changing, with 14 million digital cable subscribers to be added between 2012 and 2018. Conversely, the number of analog cable subscribers will fall by 9 million. Analog cable subscribers will not automatically convert to digital cable. IPTV will climb from fewer than 1 million subscribers in 2012 to nearly 6 million by 2018.”

Satellite TV has also benefitted from the slow roll-out of DTT. The number of primary DTT homes will climb from 10 million at end-2012 to 22 million this year and onto 59 million by 2018. The analog terrestrial total will fall from 79 million at end-2012 to 15 million by 2018.

Brazil, Mexico and Argentina dominate the region. Brazil alone will add 43 million digital TV households between 2012 and 2018, with Mexico contributing an extra 15 million. However, digital TV households will also increase rapidly in the other 16 countries covered in this report – collectively adding 24 million digital homes between 2012 and 2018.

Despite the rapid conversion, digital TV will still have plenty of room for growth for some time to come. There will still be 26 million analog TV homes (16.5% of the total) by end-2018, although this is down by 95 million on the 2008 figure.

Analog penetration of TV households will still exceed 50% in Dominican Republic, Guatemala, Paraguay and Peru by 2018. Puerto Rico will be the first to reach complete conversion to digital – in 2015. No other country will have reached complete digital conversion by 2018.

Pay TV penetration will rise, but not as dramatically as digital TV penetration. Penetration will reach 53% by 2018, up from 38% at end-2012. However, this does mean 30 million more pay TV homes, with 14 million of this increase coming from Brazil and 6 million from Mexico.

Pay TV revenues in Latin America will be US$8.5 billion higher in 2018 (US$26.7 billion) than in 2012. Pay TV revenues will grow by US$3 billion in 2013 alone to reach US$21.2 billion. DTH will continue to be the largest pay TV platform, with revenues reaching US$20.1 billion in 2018, up from US$13.4 billion in 2012. Cable TV revenues will be US$5.8 billion in 2018, up from US$4.8 billion in 2012. No prizes for guessing that Brazil (US$10.8 billion) will be the top country in 2018, followed by Mexico (US$5.8 billion) and Argentina (US$2.9 billion).