Netflix a threat to cable, satellite operators, experts say

Last Updated on Tuesday, 4 November 2014, 23:40 by GxMedia

Miami, Nov 4 (EFE).- Netflix’s offer of pay-per-view video and movie streaming via Internet is a threat to the $27 billion-a-year cable and satellite television business in Latin America, according to industry executives and insiders gathered in Miami.

What is at stake, Dataxis Latin American Vice President Ariel Barlaro told Efe, is who will dominate a regional market that currently has 53.7 million cable or satellite subscribers.

“This industry, both in the United States and in Latin America, wonders what the future will be like,” he said during Dataxis’ NextTV Latin America conference.

Over-the-top services such as Netflix offer “a direct entertainment solution” with lower cost although “they depend on the quality of the Internet connection the user has,” said David Guerra, vice president of Emerging Markets Communication, a company providing global landline and satellite communications.

The OTT model, Guerra told Efe, worries cable operators.

The transformation of the industry “has linked Latin America completely with the United States since the region has adopted the U.S. business model, programming and formats,” Barlaro said.

The business might end up dominated by “traditional operators, new services such as Netflix and others that, for sure, will expand in Latin America, or directly by studios or media groups,” he added.

Subscription TV reached 90 percent market penetration in the United States last year, while in Latin America the level of penetration has surged from 20 percent in 2008 to 40 percent now, and it is projected to rise to 55 percent by 2018, Barlaro said.

Dataxis Latin American data shows that since its debut in Latin America in 2011, Netflix has grown to 3.3 million subscribers.

Mexico’s America Movil, with 14.3 million subscribers, and U.S-based DirectTV, with 12.3 million customers share half of the subscription TV market in the region, followed by Mexico’s Televisa, 8.4 million; Argentina’s Cablevision, 3.5 million; and Spain’s Telefonica, with 3 million clients. EFE