Viacom Takes Paramount+ Streaming Service to Latin America; Inks CNN Content Deal with Pluto TV

Viacom International Media Networks is set to expand the Paramount+ streaming video platform to Latin America.

The SVOD service, which first launched in Scandinavia (in response to HBO Nordics in 2017 and later in Central and Eastern Europe – known as Paramount Play), will become available May 1 in Brazil in a partnership with telecom NET, followed by wider distribution through a mobile deal with America Movil.

Paramount+ affords Viacom and Paramount Pictures international streaming distribution of more than 150 movies and original TV shows, including “Yellowstone,” starring Kevin Costner, “The Handmaids’ Tale” (available exclusively on Hulu in the U.S.), in addition to branded content from MTV, Comedy Central, Nickelodeon and Nick Jr.

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“By forging partnerships with the world’s leading operators and distributors, we are able to bring Viacom’s premium content to new global audiences,” David Lynn, president and CEO of Viacom International Media Networks, said in a media statement. “As the media landscape continues to evolve, we will aggressively innovate to expand our partner offerings, including Paramount+, across our massive global footprint.”

Indeed, while Paramount+ represents Viacom’s aggressive strategy to close the digital divide with rival studios, following the recent purchase of Pluto TV, Viacom is fortifying the ad-supported VOD platform with proprietary and third-party content.

Pluto TV just announced a new channel launch featuring content from WarnerMedia’s CNN – which itself is planning an OTT video product in 2020.

“At a time when news cycles are never-ending, in a world that is constantly evolving, CNN’s coveted daily reporting and in-depth features are perfect for our audience to be informed, with immediacy, accuracy and ease,” Amy Kuessner, SVP of content partnerships at Pluto TV, said in a statement. “Pluto TV’s mission to ‘entertain the planet’ also means informing the planet of what is going on in the world, and there is no better partner than the most trusted name in news.”

Report: Netflix Driving Latin America SVOD Growth

On July 11, 2011 Netflix announced plans to expand service into South America spearheaded by Brazil. The SVOD pioneer at the time had 23 million subscribers in the United States and Canada – the latter Netflix’s first foreign expansion.

Leapfrog to the present and Latin America is forecast to reach more than 51 million SVOD subs by 2024 – about double the 27.1 million recorded at the end of 2018, according to new data from Digital TV Research.

The top six regional platforms – driven by Netflix – will account for 85% of the region’s paying SVOD subscribers by end-2024.

Netflix is projected to reach 26.3 million paying subscribers in 2024 – or about 50% of the region’s total – but down from 66% market share at the end of last year.

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Simon Murray, principal Analyst at Digital TV Research, said Netflix’s declining market share in Latin America is due to the rise in ad-supported VOD and subsidized SVOD platforms in the region.

“Several mobile and pay TV operators provide free and limited SVOD platforms to their top paying subscribers. This stifles pay SVOD take-up,” Murray said in a statement.

SVOD subscription revenue will drive overall over-the-top video revenue across 19 countries with $6 billion of the projected $8.25 billion in revenue through 2024. The latter up 147% from revenue of $3.33 billion in 2018.

Brazil will remain the SVOD revenue leader by 2024 – supplying 40% of the regional total. Mexico will provide another 24%. Combined, Brazil and Mexico will account for 66% of the region’s SVOD revenue by 2024.

 

Netflix Overcomes Brazil Hurdle

In 2011 Netflix launched service in 43 Latin America countries, beginning with Brazil. Expansion into Brazil — the fifth-largest media market in the world, after China, India, the U.S. and Indonesia, was fraught with challenges.

Consumers were less familiar with using credit cards to pay for recurring charges such as over-the-top video. In addition to spotty broadband penetration, the lack of localized content (at the time) on Netflix alienated potential subscribers.

“Brazilians enjoy different things, like UFC and stand-up comedies, while hating telenovelas that are made in other Latin American countries,” former chief communications officer Jonathan Friedland told the Brazilian press.

Long-time Netflix bear Michael Pachter, digital media analyst with Wedbush Securities in Los Angeles, went so far as to predict Netflix wouldn’t make it in Latin America.

“This just won’t work in Ecuador or Costa Rica or even Mexico as it has in the U.S.,” Pachter told the Associated Press. “It’s going to depend on how many households have broadband access and what the quality of the content will be like.”

Fast-forward to the present and Netflix is a shining star in Brazil.

Along with Google’s YouTube, Netflix is the first OTT video choice across all devices, according to new data from IHS Markit. About 28% of respondents claim they turn to Netflix first when looking for something to watch, followed by YouTube at 24%. More than 63% of Internet users in Brazil, between the ages of 18 and 64, had access to Netflix, of which 86% claimed to use the service at least once a week.

IHS says that along with growth in OTT video, the installed base of Internet-connected devices grew by 10%, rising to more than 310 million devices in 2018.

More than 40% of survey respondents said they have a personal computer connected to their primary TV screens, while 35% claim to mostly use their smart TV apps to access video content on their primary TVs.

IHS contends that with on-demand video becoming ubiquitous around the world, and Brazil is no exception.

“The country has been experiencing a significant economic slump in recent years and, like other Latin American markets, Brazil’s legitimate pay TV and OTT subscription video-on-demand (SVOD) service providers have seen subscriptions fall or suffer reduced growth,” Erik Brannon, associate director of research and analysis, wrote in a note.“Laptops, tablets, streaming sticks and other devices increasingly pose a threat to cable TV and other traditional TV services.”

In terms of perceived quality, Netflix and YouTube were significantly ahead of pay-TV providers in the following categories: ease of use, flexibility (i.e., “ability to watch what I want when I want”), largest catalog of content, quality of content, and value for the money.

Although this finding is a victory for OTT providers, Netflix and other OTT video services must focus on local language content to remain relevant in the long term, according to Brannon.

Despite the vast library of foreign content Netflix has to draw upon, the amount of Brazilian and Portuguese content remains minimal, which is why the company is now partnering with local producers to boost local content in its library.

As the Brazilian economy continues to improve, growth in pay-TV households is expected to resume. At the same time, a surge in growth is expected in the OTT market as well.

IHS found that pay-TV monthly average revenue per user (ARPU) can cost five times or more than the monthly ARPU of Netflix. Subscription sharing also seems to be a profound problem in Brazil, since nearly 63% of survey respondents reported having access to Netflix, while Netflix subscriptions penetrated less than 25% of all broadband households.

“Connected consumers in Brazil are interested in viewing content in non-traditional ways, which will put added pressure on traditional content and distribution systems when the economy recovers,” wrote Brannon.

 

 

Acorn TV Expanding to Latin America

Acorn TV, the British-centric SVOD service owned by RLJ Entertainment, is expanding its footprint via Roku to Latin America.

The $4.99 monthly service is now available inArgentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, and Peru through Roku or Acorn.TV.

“One of our top 2018 priorities is accelerating our expansion of our distribution footprint, and Acorn TV’s launch in Latin America with our partner Roku is another step in this progression,” Miguel Penella, CEO of RLJ Entertainment, said in a statement.

Penella said the expansion would help Acorn TV achieve its goal of generating 1 million subscribers by 2019.

Acorn TV is as old as Netflix, relaunching as a standalone over-the-top video service in 2013. It ended 2017 with more than 500,000 subscribers.

Original programs include BBC comedy “Detectorists,” new ITV drama “Girlfriends,” and the return of Irish drama, “Striking Out.” Other programs feature new seasons of Aussie period drama, “A Place to Call Home,” British drama “Delicious,” Aussie medical dramedy, “The Heart Guy,” dramedy “800 Words,” as well as long-running mysteries, “Midsomer Murders,” “Jack Irish,” starring Guy Pearce, “Murdoch Mysteries,” and “The Brokenwood Mysteries.”

RLJ Entertainment is majority owned (on paper) by AMC Networks.

Netflix Enters Pact with Spain’s Largest Telecom

As expected, Netflix and Telefónica, Spain’s largest telecom, have inked an agreement enabling the SVOD pioneer to be embedded in the latter’s Movistar over-the-top video service in Europe and Latin America.

The first launches in several countries will be announced in the next few weeks and further launches will happen throughout the region in 2018.

The agreement is part of Telefónica’s plan to collaborate with top media and distribution companies around the world, according to the telecom’s president Álvarez-Pallete.

“We want to offer our customers the most compelling video offering possible, whether it’s our own content or third party providers,” he said. “The partnership with Netflix will significantly enhance our existing multichannel video platforms.”

Similar to other direct-access deals between pay-TV operators and Netflix, Telefónica embeds the SVOD app on its platform affording members with a Netflix account easier access to programming.

“Over the next several years, our partnership with Telefónica will benefit millions of consumers who will be able to easily access their favorite Netflix shows, documentaries, stand-ups, kids content and movies across a range of Telefónica platforms,” said Reed Hastings, co-founder and CEO of Netflix. “Making Netflix available on Telefónica’s familiar, easy-to-use TV and video platforms enables consumers to watch all the content they love in one place.”