The challenges and opportunities of OTT in Brazil

Jossi_FrescoBy Jossi Fresco, Regional Director, Latin America

August marks the 30th annual SET EXPO, Latin America’s largest media and audiovisual conference and trade show. Thousands of content delivery and over-the-top (OTT) media professionals will gather in São Paulo, Brazil, to discuss cutting-edge trends in media technology.

However, let’s remember that São Paulo remains a technology hotspot long after the trade show ends. Brazilian viewers are adopting online media in record numbers year round.

According to a 2017 Consumer Lab study, Brazilian customers, on average, spend 36% of their time consuming video. The study also found that around 60% of Brazilians are using their smartphones to watch video – a figure that has climbed 71% since a 2012 study. As the figures demonstrate, in only five years, the Brazilian population has massively adopted mobile phones and is displaying much higher engagement with online video, especially mobile content.

Brazil’s media market is filled with unused potential. The country has as many pay-TV subscribers as in the United States. Since this only represents about 30% of the Brazilian population, there’s an enormous untapped market for pay TV in Brazil. More importantly, viewers willing to pay for linear TV are more likely to make the jump to OTT.

While Brazil is ripe for OTT expansion, there are significant challenges for media companies, even local Brazilian ones, looking to thrive in this market. Here are some of them and how they can be overcome.

Brazil’s specific challenges for providers

When media professionals consider Latin America, they usually consider the region in two pieces: Brazil, and everything else. Brazil is the only LATAM country where citizens speak Portuguese instead of Spanish, immediately differentiating it from the rest of the continent.

However, localization isn’t as immediate a challenge as is entering the market. Brazil is a very unique market, with major broadcasters holding the rights to much of the local content. This gives Brazilian companies the advantage if they choose to take it.

Many of the leading companies that offer OTT in Brazil have focused on creating their own platforms, developing their own software, and generating their own delivery mechanisms and encoding farms. The result is an OTT offering unique to Brazilian viewers, but one that is time-consuming to update and maintain. It’s a major overhaul that has to occur alongside the provider’s efforts to secure and localize new content and attract and retain viewers.

For providers that entered the market three to five years ago, it’s long past time to update their platforms, which can take years, during which time they could lose viewers due to buffering, slow video starts and other delivery-related issues.

How to best serve Brazilian customers

In order to be successful in Brazil, content owners, broadcasters, and direct-to-consumer OTT providers need to be able to move quicker than they do now. A multi-year update cycle lags behind technological advances and is an invitation for dissatisfied viewers to find a better provider. While international OTT services have struggled to make inroads in the Brazilian market for many of the reasons mentioned above, they often provide a high-quality experience to viewers, making them competition worth worrying about.

For most Brazilian and LATAM broadcasters, the best solution is to work with a technology partner that can provide the entire OTT stack. Verizon Digital Media Services’ video streaming platform can manage the entire lifecycle of OTT content, from ingestion to storage to delivery to monetization. Launching an OTT service with these tools will take a few months, rather than a few years, and will also deliver quality on a par with OTT platforms launched by major international media companies in Brazil and across LATAM. This frees up broadcasters to do what they do best: produce great local content for their viewers.

The future of Latin American OTT

At this year’s SET EXPO in Brazil, expect to see leading brands from around the world. It won’t only be media companies who realize the urgency of OTT. Exhibitors and attendees from finance companies that want to provide visual information to viewers to corporate enterprises that want to give countrywide presentations to their workforce, dozens of sectors that depend on fast and reliable OTT will be at the show. Even though Brazil demands a specific workaround separate from other countries, none of these organizations can risk taking the time and manpower required to keep a scratch-built OTT solution running.

Pay TV, video on demand (VOD), and OTT viewership are only going to rise in Brazil, and this market isn’t going to remain wide open for long. To succeed in this unique Latin American country, providers need to be ready to hit the ground running. They should be looking for a technology partner that can provide them with the expertise, technology and track record to successfully launch and evolve their OTT services with the best quality of experience for their viewers, with speed and at scale.

Attending SET EXPO? Schedule a meeting or visit us at Booth #150, Rua C-7 to see how we’re delivering the future of media.