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Latin American OTT Market Dominated by the Young

June 18, 2015

The over-the-top (OTT) market has already been a cause for some alarm on several fronts, as more traditional service providers find it difficult to compete with the array of services often offering more and charging less than the traditional services. But this isn't a phenomenon that's limited wholly to the United States. The Latin American OTT market is poised for some huge gains, and the youthful nature of these gains suggests a trend that's here to stay.

A report from TDG, titled “El Futuro de TV – OTT Video in Latin America, 2015 – 2025” projects a decade that will be heavily influenced by OTT services throughout Latin America. By 2025, the TDG report envisions a market valued at over $8 billion, one that accounts for a full quarter of all video seen in Latin America. Once that trend gets in place, it likely won't be going away any time soon, as the largest part of the OTT market is set to be consumers aged 18 – 34. That market will make up 65 percent of all OTT viewing.

Naturally, OTT can't exist without the proper infrastructure, and that's a development well underway. Broadband availability—one of the biggest factors in setting up an OTT market—has been rapidly on the rise over the last few years such that even TDG calls it a “dramatic” improvement in availability. Meanwhile, this rise in OTT interest isn't lost on potential providers; Netflix made a push on the Latin American market back in 2011, and is now found in 43 different countries throughout the region, even bringing in original Spanish-language content specifically for the new market.

While it may sound like OTT is about to have a field day in the region, particularly since the young are so clearly invested in it, the rise of OTT in Latin America won't be without some problems. While broadband access has made some huge gains, it still has a long way to go. There are also issues of major poverty in the country, limiting access to the necessary broadband still further, and the sheer power of vested interests like free-to-air broadcasters who've been operating for decades in the region.

Image via Shutterstock

This is a great opportunity for OTT firms like Netflix; Netflix has to know that people can't watch its videos without broadband service that's sufficiently fast and stable to accommodate streaming video. So why wouldn't Netflix want to promote broadband activity in the region? Maybe it makes a division that offers it, or just invests in firms that do. We've already seen Google and even Facebook doing similar projects designed to bring Internet access to underserved or even unserved areas, so why wouldn't Netflix do likewise? The more bandwidth there is, the greater the likelihood people will watch Netflix.

Still, the OTT market is setting itself up to be a major force around the world. People want options in entertainment viewing, and OTT services are providing those options. While it won't be as fast as some want, or as varied, ground is still being gained, and that means OTT will be a part of the landscape for some time to come.

Edited by Dominick Sorrentino

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