[Via Satellite 07-27-2015] Pay-TV service provider Media Networks is shifting its focus primarily to HD, 4K and expanding the reach of television beyond the home. The company has close to 80 HD channels in Brazil and almost another 80 HD channels in the rest of Latin America. Going forward, the intention is to double the number of HD channels and lay the foundation for 4K.
“Two or three years ago everyone was talking about HD. It was a reality in word and in trends, but not in offerings. Now HD is really a reality. The next steps we are seeing in terms of quality is, of course, 4K,” Leandro Gaunszer, commercial director, LATAM and country manager, Brazil, Media Networks, told Via Satellite. “At the end of this year and the beginning of next year we are going to have an offering in 4K already for our clients.”
Latin America is a dynamic market for broadcasting, with video consumption on the rise and high profile events like the 2014 World Cup and the 2016 Olympics bringing lots of attention. Media Networks is one of the largest teleport operators in Latin America and supports large broadcasters, such as DirecTV and Claro TV, as well as a myriad of smaller players. Last year, the company expanded to Panama through a deal with Cable & Wireless, and also began providing services for Qualy TV, a newer player with operations in Guatemala, Nicaragua, and Costa Rica. The company also signed CNT in the Galapagos. Gaunszer said the momentum for higher quality broadcasts is on the rise.
“I would say all markets that we are present in are almost ready [for 4K]. Brazil, Chile, Peru, and Colombia for sure are ready,” he explained. “The point of 4K will be the content. Operators have to invest in Set Top Boxes (STBs), in networks — which for us is satellite, and cable headends, and the content.”
Several players in Latin America are readying for 4K to go mainstream. Within the past 12 months, DirecTV launched two satellites, DirecTV 15 and Sky Mexico 1, as well as its DL1 A payload on Intelsat 30, which will boost HD and Ultra-HD services in the Americas. Brazilian operator Star One and Spanish operator Hispasat, along with several other satellite companies, have expressed confidence that the Rio de Janeiro Olympics, in particular, will be a catalyst for 4K across the region. Leading Brazilian Pay-TV provider Oi TV also anticipates this trend.
Gaunszer said he does not expect a lack of 4K-capable television screens to be a concern, citing the progress made by LG, Sony, and Samsung. The lack of content he described as a more pertinent issue, but added that Media Networks feels the need to be ready when the content arrives. In addition to preparing for 4K, Media Networks is transitioning away from SD as a major focus, looking instead to beef up HD, which continues to grow steadily throughout Latin America.
“We have a lot of clients with STBs for SD, so we need to migrate them to HD. We are not adding SD channels. Just if it is a new channel or local channel, but otherwise, not really,” said Gaunszer. “We are adding about 80 new HD channels, 40 for South America and around 40 to Brazil as well. Our target is to be the number one in HD channels in the region.”
Gaunszer highlighted multi-screen entertainment as the other major trend. Media Networks has performed several services that indicate customers are watching their broadcast service and, at the same time, using their mobile phone or tablet. Because of this, Gaunszer said the next step for the company is to provider customers with content on different devices, and further on to extend outside of the home.
“I believe the next trend will be: if you pay for your subscription you can see it anywhere. That could be [Over-the-Top] OTT anywhere or pay-TV anywhere, but that will be the trend,” he said.
How that plays out is not yet clear for the satellite industry, because pay-TV is usually a fixed service.
“That is not the mood now, because the mood is what’s mobile. What satellite can do — since it is probably the only one who can, compared to cable and fiber — is cherry-pick clients in different places. If you have your subscription in one place, you can go to another place with the same subscription by satellite with no additional cost. The second is that satellite, cable or fiber, IP will be the protocol that we will use for services. So, if you are in Wi-Fi, or anyplace you have Internet, you will have your service,” he said.
Gaunszer estimated that the market penetration for pay-TV in Latin America is on average around 35 to 40 percent. Because there is so much room for growth, Gaunszer said he expects the dominance of incumbent providers will ebb away to new, rising small players.
“We have several Internet Service Providers (ISPs) talking to us because they have voice, they have Internet, and they need to have a pay-TV service as well. I see there is probably 20 or 30 percent more penetration in the next five or six years,” he said.
The main reason for this: the strong appeal of triple-play offerings.
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