Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Monday, June 21, 2021

The break between the network and content

Pure OTT allows the operator to have an independent product to sell not only to the end user but also to ISPs that do not have their own TV services. DirectvGo is so far the only one of this category available in Argentina, although Telefónica is expected to launch a similar strategy soon with Movistar Play. However, it still has to motivate the use of the platforms and alliances with international production companies, which seems to be the most effective way.

In 2020 Movistar launched its OTT strategy through two lines, which it maintains through separate business models: with Movistar Play as a linear TV product, called Movistar Pack Tele, and with the incorporation of Play Box, which turns TV into Smart, emerged as a combo with the fiber, that adds 200,000 clients. The first is a TV service that includes 100 HD signals and the possibility of adding Pack Fútbol, HBO Pack, Fox Premium and Amazon Prime Video. The Play Box, with a Movistar interface (on Android), allows the user to download apps, such as Netflix or Amazon, or music.

In the content ecosystem, linked by the operator directly by the deco or by the Smart TV, where the client can download applications on their own, including Movistar Play, generates the intermediate step to the pure standalone that for the moment in the country is available only to users, although it is expected to follow the steps of the operator's strategy in Chile, which can be hired by non-customers. Leonardo Rubino, head of Movistar's Value Proposition, assured to Convergencialatina that they have not yet planned to launch it in the country, although it is in the product development plan.

Movistar plans to end 2021 with 1 million video clients, among all its products. For Rubino, OTT is the best way to enter the home as a TV service, through the big screen. Although the exclusivity with Amazon ended, which selected Telefónica to become known in the region, after 2020 with an aggressive strategy, Rubino assures that the Amazon pack is still the most important of its platform. Around 500,000 customers have the Movistar Play app but, as Gustavo Castro, Movistar's content manager at NPlay 2021, explained, it is used by only 30%. That explains why they still maintain the free tier of the platform, because they want their customers to be able to test it on the big screen at no cost.

Another of the channels that push the use of the platform is Starzplay, embedded in Movistar Play, with a free trial month and with a catalog of movies and series, which as attractive have the simultaneity of the opening day with the United States.

Cablevisión's Flow reached 5 million connected devices during 2020 and has close to 17,000 hours between on-demand content, gaming and music. They also go through two lines of content offers, with Flow App, which enables access to Flow for all its clients and Flow Now, which allows access to the service to all those clients of Fibertel's FTTH service, without the need for a decoder.

Flow has 25 co-produced titles that in 2020 reached more than 27 million views. In their programming dedicated to esports, they went from broadcasting more than 60 events in 2019 to more than 300 in 2020.

The third player has the same strategy at the regional level, Directv Go. Its strength runs through sports programming, both on TVE and OTT. It is offered at no additional cost to its satellite television service and as a pure standalone product and are currently managing commercial alliances with medium-sized ISPs in the country to offer it with a preferential discount for a limited time. In Colombia, for example, they have a distribution agreement with ETB.

Customs and habits. 50% of the users of Movistar's traditional TV service use the search, forward, rewind option. Within these, the most widely adopted function is to watch programs at other times, a behavior similar to OTT, although it has a short window of 24 hours. 90% of its users watch local football on the big screen, while European football is seen on multi-devices; behavior linked to schedules (European football coincides with local working hours). Before the pandemic, movie rentals in the Movistar Play free tier was one of the most important products and fell, not only due to the lack of premieres, but also due to poor communication, says Rubino.

According to Directv, the region has three types of users: those who have pay TV and use Directv Go as a complement, those who previously had TV and now choose Directv Go, and those who never had pay TV, a segment called "freshmarket", which look for content without annual contracts. Regarding consumption on devices, those who are customers of the satellite television service who use Directv Go are used more on mobile devices, outside the home and those who hire Directv Go as a stand-alone product, consumption occurs mainly on the big screen.

 

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