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Nagra Sees Latin American Pay-TV Industry Growth Coming

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6/13/2017
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CHESEAUX, Switzerland -- Developed by NAGRA in partnership with MTM, a leading international research and strategy consultancy, the Pay-TV Innovation Forum 2017 is a global research program for senior pay-TV executives that examines the state of pay-TV innovations and strategies that will drive the next phase of growth for pay-TV operators – in TV, OTT and adjacent businesses. The first regional seminar of the 2017 edition took place in April, surfacing a number of emerging findings on the state and development of the Latin American pay-TV industry.

Across Latin America, pay-TV markets vary widely in terms of their size, and pay-TV penetration and ARPU are at very different stages of development. There is a set of high growth markets, such as Mexico and Peru (23% increase in pay-TV subscribers between 2014 and 2016) and moderate growth markets, such as Colombia and Chile (8%), while Brazil has seen the number of pay-TV subscribers plateau between 2014 and 2016, primarily driven by deteriorating economic conditions in the country. Despite global positive figures for the region, some industry executives acknowledge that growing pay-TV businesses is difficult due to a variety of reasons, including high levels of economic inequality, strong free-to-air TV offerings, growing take-up of OTT services, and rising rates of pay-TV piracy: “In Mexico there are new players, new services and new ways of subscribing to pay-TV services from the consumer point of view – but growth is challenging everywhere.”

Industry executives acknowledge that content piracy has become a significantly bigger issue in the pay-TV industry over the last couple of years. Drivers include the emergence of easily accessible illegal IPTV set-top boxes, growing costs of pay-TV subscriptions, increased sophistication of pirates, and difficulties in measuring and tracking piracy. “Content piracy is getting worse. In the old days of Bit Torrent, we could at least easily measure the impact, but now it’s much harder as a lot of it has shifted into IPTV and OTT-based boxes. The reality is that most people who are fighting piracy don’t really have visibility on its extent.”

Nonetheless, the majority of industry executives share the view that the industry will be able to reduce the impact of piracy in the long term via closer pan-industry cooperation and coordination, improved legislation and education, advancements in content protection technology, particularly forensic watermarking solutions, and pay-TV providers improving their value propositions to better address consumer needs.

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