Mexico. Restricted Television and Audio Services (STAR) are defined in the Federal Telecommunications and Broadcasting Act (LFTR) as those of "audio or associated audio and video telecommunications provided to subscribers through public networks Of telecommunications, by contract and the periodic payment of a pre-established amount ".
Based on this, three platforms for the provision of monthly payment video content compete in the STAR market, namely: restricted television via satellite, that transmitted by cable and other technologies (eg microwaves) and video on demand services online or Over the Top (OTT).
The most recent report of The Competitive Intelligence Unit on the subject, points out that this market is characterized by its accelerated growth in revenues and upward dynamics in its hiring, attributable to the marked preference for the consumption of audiovisual content, especially those transmitted to from on-demand and cross-platform platforms (Over-The-Top, OTT), to packaging with other services (telephony, internet, SVOD and TV Everywhere platforms) and to the launching of affordable offers in terms of prices for households.
The Market in Subscriptions
At the end of 2017, the STAR market accounts for 27.4 million subscriptions, equivalent to an annual growth of 3.3%. The fastest growing segment is OTT, with 7.7 millions of subscriptions, 15.6% more than in 2016, while the satellite segment (10.7 million) registered a fall of 4.2% before the dissolution of the transitory rise that took place due to the transition to Digital Terrestrial Television in 2016. That of cable and other technologies (9.0 million) registered an increase of 3.5% in an intermediate maturation phase with positive growth rates but lower or constant.
The supply of original content in a ubiquitous manner and on demand has boosted the preference for the contracting of OTT platforms. Another relevant factor is the possibility that several users (2 - 4) can view content simultaneously, from the hiring of a single bill or billing plan.
In this way, at the close of 2017, the proportion of OTT subscriptions amounts to a ratio of 28.2% of the total STAR that is increasingly closer to that of TV restricted by cable (32.8%), but still distant from satellite TV (39.0 %). Under this growth rate, OTT platforms have captured a volume of users that is rapidly approaching those of traditional content distribution platforms.
The Market in Revenues
In terms of revenues, the market adds $ 26,082 million pesos during the fourth quarter of 2017, 11.4% more in the year-on-year comparison. Its distribution highlights that the weighting of the OTT services ($ 3,314 million pesos) in the total revenue is just equal to 12.7%, while in the case of satellite TV it is 28.4% and 58.9% in the case of the Cable TV.
This is attributable to the fact that the monthly payment for subscribing to an OTT service is even more affordable than basic prepaid satellite TV packages, and even more so when it is prorated among the number of users of the subscription. In numbers, on average the monthly expense for an OTT account is $ 140 pesos, while the average price of a basic package is $ 202 pesos per month.
Under this dynamic and competitive scenario, the strategy of the operators of restricted television consists of trying to level the playing field, by implementing convergent content offers with multiplatform video platforms under demand that incorporate content from the main content generators.
This is how a 'content war' is witnessed to attract the largest volume of audiences from original / exclusive content or via strategic transmission agreements that add value to traditional or previous offers. All this has caused an upward dynamic in both revenues and subscriptions within the STAR market.
Text by Radamés Camargo, of The Competitive Intelligence Unit.