With the arrival of HBO Max, this Tuesday, the 29th, the question on everyone’s mind is: after all, is there room for all these streaming video services? Just last year, platforms such as Disney+, Paramount+, Belas Artes à La Carte, Reserva Imovision and Supo Mungam Plus arrived on the market, which joined Netflix, Amazon Prime Video, Apple TV+, Starzplay, Mubi, Telecine and Globoplay. In August, Disney launches Star+, with more adult content than Disney+. In September, Discovery+ arrives.
The likely answer to the question is no. But the Brazilian market is attractive. According to a KPMG survey, 86% of 1,012 respondents said they consume streaming. Over the past three years, online video consumption has grown 84%, a trend only accelerated by the pandemic. In a Kantar Ibope Media survey, 58% of respondents said they watched more paid streaming in the period, and 68% increased their free service diet. A Sherlock Communications report revealed that 45% of Brazilians subscribed to at least one service in 2020, with 16% subscribing to two platforms, 6% to three, and 2% to four.
And Brazilians already tend to see a lot of video: 80% for free online videos (compared to 65% of consumers in other countries), 72% for videos on social networks (57% worldwide, and 62% for paid streaming services). (50% worldwide). Every day, each paid VOD user in the country spent 1h49 viewing content. “Brazilians have a very strong relationship with video, compared to other countries,” said Adriana Favaro, director of Business Development at Kantar Ibope Media, to state. “The pandemic anticipated many trends that we were already looking at. The video became more of a protagonist in this period.”
Prospects are optimistic. The Brazilian market is expected to grow from US$ 689 million in sales to US$ 1.25 billion by 2025. Digital TV Research predicted that the Latin American market would grow from 42 million in 2019 to 81 million in 2025. In the end 2020, revised the target to 100.3 million. “Brazilians are eager for novelties, and the pandemic has accelerated this. The national market is gigantic,” said Marcio Kanamaru, leading partner of Technology, Telecommunications Media at KPMG in Brazil.
The region still suffers from a lack of broadband access. So much so that surveys show a high use of smartphones to watch videos – the country has 220 million cell phones. According to KPMG, 30% of Brazilians use cell phones to watch their content, a number that rises to 39% for those under 25 years of age. A Penthera report pointed to an even higher rate of 53%. Of the 1,200 Latin Americans surveyed, 92% have already been frustrated with their streaming experience, with 43% saying they wait at most two buffers before giving up content. The expectation is that the arrival of 5G may change the scenario – hence the optimism regarding market growth. “Those who live on the outskirts have very low 4G quality. 5G should reach everywhere more easily, because many more antennas will be needed to function,” said Ricardo Queiroz, partner at PWC, responsible for a study on this market in Brazil .
No wonder, therefore, that, unlike the bet on a global launch of Amazon Prime Video and Apple TV+, and Disney+’s first European focus, HBO Max and Paramount+ have chosen Latin America as their second market after the United States. “Many Latinos are still not enjoying streaming the way we’ve hoped. So we think there’s a huge amount of room to go in and have fun in Latin America,” said Luis Durán, general manager of HBO Max in the region, in an interview with state in May. In the announcement of Paramount+ in the country, JC Acosta, president of ViacomCBS International Studios & Networks America, showed great expectations for Brazil. “Pluto TV (the company’s free streaming service) has launched with great success, so we expect the same with Paramount+,” he said.
For Ricardo Queiroz, the country is an interesting market. “It’s not just a test. Brazil is always at the forefront in data consumption, access to WhatsApp. They look at the Brazilian market with affection because we are digital, we like to watch series, on social networks.” Brazil is consistently singled out as one of Netflix’s top three markets, and Disney+ has also quickly won over local viewers. Local platforms like Globoplay show no concern. “We observe this competition in an extremely positive way that will bring benefits to the consumer,” said Tiago Lessa, head of Marketing, Acquisition and Engagement of Digital Products and Services Globo. “The trend is for global platforms to coexist with local forces, but the fact that we have a Brazilian DNA helps us to idealize and produce, like no other player, content that is totally in line with our audience.”
But maybe there isn’t room for all these platforms. “As there are no exact numbers, it is difficult to know. The market will adjust, as always,” said Jean-Thomas Bernardini, president of Reserva Imovision. “In my opinion, very small platforms will have difficulty. In streaming, expenses are very high, and the profit margin is small. If you don’t have a cashier, it’s more difficult.”
For Marcio Kanamaru, streaming platforms for a more specific audience may have difficulties, but there is space. “They will need creativity to develop partnerships with companies that share the same values.” In the KPMG report, 47% of respondents would agree to subscribe to another platform. “Brazilians understand that streaming is part of their life. But the price is important, and the content still rules,” he says. The acceleration may have been higher than expected in 2020 because of the pandemic, but it is not expected to drop much when the coronavirus is tamed. “A lot of this change is here to stay. The big challenge is going to be consumer loyalty,” said Favaro. In the US, the boomerang consumer, who jumps from service to service, is increasingly common.
