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According to research from TDG, Latin America is poised to become a significant market for OTT video, with use especially prominent among younger adults. By 2025, TDG forecasts that consumers between the ages of 18 and 34 will account for 65 per cent of all OTT viewing.
“Much is said about the rise of US Millennials and the impact they will have on video viewing,” says Joel Espelien, senior analyst and author of TDG’s new report, El Futuro de TV – OTT Video in Latin America, 2015-2025. “But few understand that these same demographic trends are creating tremendous opportunities for OTT vendors in international markets, Latin American in particular.”
Though Internet penetration in Latin America still trails that of the US by a wide margin, the total number of broadband users is relatively even. This is a dramatic improvement over the last decade, thus presenting a tremendous opportunity for OTT video services.
This opportunity is not lost on Netflix, which first entered the Latin American market in 2011 and is now available in 43 countries across the region. The company has recently invested heavily in original Spanish-language content specifically designed for this emerging market. “The fact that Netflix is expanding its efforts in the region should send a strong message to others that the potential of OTT in Latin America is real and the time for entry is now.”
But OTT video in Latin America also faces inhibiting forces, including poor penetration of fixed broadband, widespread poverty, and the dominance of legacy free-to-air broadcasters. Despite these challenges, TDG forecasts that OTT video will experience strong growth in Latin America over the next decade. By 2025, OTT will account for 25 per cent of all video viewed in Latin America, generating US$8 billion in annual revenue.