Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, January 11, 2022

SMEs transition through the change in audiovisual offer from multiscreen to multiplatform

The idea that the consumption of OTTs is replacing premium subscription predominates. In addition to the multiplatform proposals linked to operator associations -the CABASE, Sensa and Dibox Go-, add alternatives with a focus on multi-devices and VOD.

The direct reach to the consumer by large content producers such as WarnerMedia (HBO), Disney, ViacomCBS (Paramount + and Pluto TV), among others, redefines the roles in the value chain for all sizes of providers. In the case of cooperatives and SMEs in Argentina, the traditional role coexists - to be a sine qua non ally so that, through cable subscription, audiovisual content reaches homes - with the challenge of disintermediation, meaning, that each signal seeks to reach the consumer directly with different approaches. For example, WarnerMedia prefers direct contracting than going through the operator.

The prevailing idea in the sector is that the consumption of OTTs is replacing the Premium, but not yet displaces the “live” one. Sports, news and novels still have the most important share of time devoted to audiovisual consumption.

SMEs need to invest in hardware and software to integrate the platforms of traditional signals (HBO Max, Disney +, etc.) and pure OTT (Amazon, Netflix, etc.) and not be left out of the content business. But other actors also appear, such as MercadoLibre, through which the user can directly purchase Star+ and Disney+ (both from Disney) for US$ 6 and, in addition, access loyalty promotions for other e-commerce transactions such as free shipping product purchases, among others.

In the Argentine market, small and medium-sized providers and cooperatives serve 34% of the fixed broadband market and 25% of the pay TV market. The grouping in associations or chambers has historically marked the route of providers towards new eras of technological demand. And this would not be the exception. In the case of access to the multiplatform market, there are three main proposals: those of cooperatives of Colsecor (Sensa), Red Intercable (Dibox Go), and ISPs of CABASE through the content hub of that organization. Added to this is the offer of streaming solutions from Woplay and Qvix Solutions, among others.

CABASE content hub. Managed by the CABASE content commission, since 2019, it is available to its associates. To be part, they must have a fixed link broadcasting service registration with Enacom, sign a mandate letter and contract the technical distribution platform approved by CABASE. At the moment the only one approved by the signals is Rocstar. The dollarized costs and the demands on the encryption of companies such as Disney or WarnerMedia limit that other developments can be homologated.

18 months after its launch, the CABASE content hub has 60 providers, including SMEs and cooperatives, serving 45 locations. Among all they serve about 15,000 accesses.

Under the "Free" product, 17 signals are accessed; the "Full", adds to previous ones about 55; Turner's aggregate adds 15 channels; and Disney's 19. Then there are extra packages like Disney Premium, Fox Sports Premium and TNT Sports Premium. The hub allows providers to add their own local channel, from a television station in the area, or also the channel with fixed cameras in the towns, a resource widely used in the interior of the country. The next step will be to add a rotating grid, to return to the previous channel and facilitate navigation.

A mobile application is developed for each ISP, so that end users can directly access the hub. These developments take about 15 days. In the future, they will seek to give intelligence to the search for content among all the signals present in the hub, so that when the client wants to see a movie, they do not have to search for it on each platform, even if they are an OTT user.

Beyond being the platform used for the Cabase hub, Rocstar can be used by cable companies who have already negotiated their content: they acquire the “turnkey” platform and, in this case, make the declaration of customers to the signals. Rocstar has added Paramount +, HBO Premium and Cinemax in the basic plan since October. They already had Turner and Disney. In addition, they give access to the VOD platform to Sony, AXN, Universal and the History Channel.

Colsecor's platform is used by 96 providers, mainly cooperatives. Sensa has a basic grid of 76 HD and 26 SD channels and is negotiating to add HBO Max, Paramount + and Star +. It recently signed an agreement with Artear to incorporate Channel 13 and TN signals.

Miguel Factor, Colsecor manager, said that some providers use Sensa as an added value, but in other cases it has already become the main way of providing the television service. "With Android TV already in some homes, it is the main method of consuming TV," he pointed out.

Its differential is local content: it has 30 local signals that previously could only be seen by cable and Colsecor seeks to reach 70 accessible in multiscreen format. The entity encourages each cooperative to make its contents available to offer them on Video On Demand. For example, there is a case of a region with more than 20 cooperatives within a 100 km radius that seeks to see signals from other towns and thus “federalize” TV.

Dibox Go. As for this Red Intercable product, based on the Flow platform, it is marketed by 64 cable operators throughout the country. It is viewed through an application that can be downloaded on multiple devices, including Chromecast, but not on STB.

Other alternatives. Out of the associations, there are Woplay and Qvix Solutions solutions on the market, among others.

Woplay, adding four years in the market, is an alternative that can be contracted through some ISPs, such as Vanet (operates with fiber and wireless in Greater Buenos Aires), cooperatives, such as Mariano Acosta (Merlo), in GBA, or the Eléctrica de Salto, or even Sapems. In San Juan it is marketed directly, as indicated on their website. It does not require a Set Top Box but they work in a multi-device format, cell phones, tablets, computers, televisions or Chromecast.

Qvix Solutions is a company dedicated to IPTV and video on demand, which proposes a pay-per-use model of its platform for small providers, while leaving the negotiation of content of the signals in the hands of the SME operator. Its "Nebula" service is intended for ISPs that seek to provide an extra service over the Internet access network.

It has 12 clients in the country: even one of them - a cable operator - plans to disconnect its traditional subscription television service and replace it with this platform. Mariano Surghy, CEO of Qvix Solutions, expressed: What is going to disappear is the grid of 120 channels. There are 20 channels that are the most watched. Why continue paying for the rest?

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