The content has been shared, if you want to share this content with other users click here.
Countries with higher market concentration levels display lower levels of pay-TV adoption, according to the Ibero-American Telecommunications Organization (OTI).
A study conducted by the organization, which examined Latin America, Spain, Portugal, and the US, indicates that 57% of households had a pay-TV subscription in the first quarter of the year. This represents an increase of just 0.1 percentage points from the prior-year period.
The traits associated with highly concentrated markets, such as high prices, low quality services, limited product offering, and a lack of incentives for new competitors, have a negative impact on the adoption of pay-TV, said the OTI.
For instance, Argentina, Portugal, and the US had the lowest market concentration levels in the study, with penetration rates of 87.2%, 84.9%, and 76.7%, respectively. El Salvador, on the other hand, had adoption levels of 19.5%, the second lowest in the study, and presented a highly concentrated market.
Another factor influencing pay-TV adoption was service affordability. Peru exhibited high pay-TV prices and a 22.7% adoption rate. Conversely, Mexico had some of the most affordable pay-TV plans in the region and 57 out of 100 households had the service.
Average income per capita also had an impact, which the OTI evidences using the cases of Bolivia and El Salvador. These two countries had the lowest income levels, which coincided with the lowest pay-TV penetration in the region. These amounted to 15.1% in the case of Bolivia and 19.5% in El Salvador.
The OTI pointed out that piracy also discourages the adoption of formal pay-TV services, as in the case of Bolivia, El Salvador, and the Dominican Republic.
Although the US registered high pay-TV adoption levels, there is a downward trend due to the increasing adoption of over-the-top content. This is not the case in Latin America, said the study, where OTT is regarded as a compliment to pay-TV subscriptions.
In Colombia, only 2.7% of the population relies on OTT as the main channel to access audiovisual contents.