Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, November 05, 2020

Uruguayan SME cable companies and their own OTT to maintain independence

The Uruguayan Chamber of TV for Subscribers has been doing “Cable Play” internal tests, which this month will be available in a first version. Based on the Vera platform, owned by Antel, the incursion into an OTT constitutes a “strategic definition” for the 80 CUTA associates, as it aims to maintain the profile of independent cable carriers from the interior of the country, as defined Washington Melo, leader of CUTA.

Among the 80 members of the Cámara Uruguaya de TV para Abonados (CUTA) (Uruguayan Chamber of TV for Subscribers) OTT Cable Play tests are being carried out, with an initial idea of ??making 30 channels available and local football. In a first version, during this month all matches of the Uruguayan tournament can be accessed if the client hires the Premium package. The initial programming schedule will also be made up of CUTA's own channel, Cardinal TV; the national channel TNU; and municipal options. “At the beginning of 2021 we will begin to contract the other signals. For the testing period we had the support of some content providers, such as MBA Networks (Antena 3)”, explained to Convergencialatina, Washington Melo, at the head of CUTA.

The OTT will be offered as a supplement to the subscriber. And its content will not replicate that of the pay TV programming schedule, so that a first "practical" objective of the launch is that the customer can access programming from its cable company when it is away from home. A second objective, of strategic caliber, is to plant a flag of "independence" for SME cable operators in the Interior of Uruguay, especially from the large content providers.

“We want to have an OTT as a strategic definition. We are not developing it with our investment, but in partnership with Antel (see more details below). But if we follow the industry trends in technological advances, we can maintain that independence. We see that there is a lot of “second-order” content, varied, interesting and under favorable economic conditions. Cable Play will allow us to start over with the definition of content and remain independent, which is the north of our chamber since its foundation 24 years ago”, said Melo.

As part of the negotiations with providers far from the "big" owners of the content, they obtained convenient prices and even months without charge. And they spoke with Pluto TV to integrate it into Cable Play.

Macabre business. The landing of Disney+ in Latin America - which adds to the launch of other OTTs by content providers, although with the strength of a giant like Disney - reaffirms what has been a "macabre business", in Melo's words. Content providers demand increases from cable companies for the renewal of programming contracts, even in a scenario of generalized economic crisis, but at the same time, they become their competitors as they transfer exclusive content from pay TV programming schedules to their own OTTs. “They make the most of the linear business, but they think of the non-linear. A balance should be found", he urged.

Melo preferred to add a quota of optimism to the outlook ahead. He confided to Convergencia that in a recent survey among subscribers of the 80 associated companies in CUTA, only 15% consume online services. And Netflix premiums over other offers. In other words, a possible additional payment for Disney+ would not be among the preferences of its customers. "Today's photo, at least, is not a problem", he concluded.

Towards Double Play. Uruguay, in turn, is experiencing times of definitions, after the new government of Luis Lacalle Pou promoted a new media law in one of its first mandated initiatives. Among the proposed changes is to enable cable operators to provide fixed broadband, thus ending Antel's monopoly.

UTA expects that in 2021 the legislation will be approved (it is currently under study by the Industry Committee in the House). For this possible scenario, he envisions two business models: offering Double Play in locations not yet wired with Antel fiber; and creating a new figure for 70% of the territory covered by the state company, which adds value to the service sale agreement that CUTA associates have with Antel at present.

The latter could be resolved in maintenance and installation tasks, among other alternatives. “We do not rule out any option. Anyway, the last word is the cable operator. As a chamber, we want to agree with Antel”, said Melo.

Precisely, launch of Cable Play is rooted in negotiations with the state company, since the platform is based in Vera. CUTA will pay a fee to Antel for its use, although it may make it available at its discretion. "We small ones have to join forces with a big one to develop an OTT, and we understood that the State allowed us to maintain our independence".

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