Market Insight

Telefonica adds Viacom channels to its OTT Movistar Play

February 23, 2018  | Subscribers Only


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Viacom International Media Networks (VIMN) has reached an agreement with Telefónica to make a wide range of its TV channels and content available to subscribers of the Movistar Play, Telefonica’s OTT subscription platform in Latin America. The video streaming service has a presence across Latin America and offers both VOD and linear content as part of monthly subscription, as well as transactional movies. Movistar Play is available to non-Telefonica clients in some countries like Peru and Chile, however it is largely offered as a bundled multiscreen service to its top tier or double-play clients. 

Under the terms of the agreement, Movistar Play will carry live feeds of Comedy Central, MTV, Nickelodeon, Nick Jr., and Paramount Channel TV channels beginning in the first half of 2018. The deal will also add a broad range of VOD content from VIMN channels to the OTT platform. Additionally, Movistar Play subscribers will have multiscreen access to a selection of Viacom’s mobile streaming apps – MTV Play, Nickelodeon Play, Comedy Central Play and Noggin. 

The new mobile deal is an extension of Viacom International Media Networks’ existing deal with Telefonica’s pay TV services that covers VIMN’s linear channels and VOD content throughout the region.

Our analysis

This agreement marks the first time Viacom has struck a deal directly with a mobile operator for carriage of its international flagship TV channels, along with access to its streaming apps and VOD content in Latin America. The new deal with Telefonica is further evidence of Viacom’s ambitions to offer its content directly via mobile operators. Viacom already has mobile agreements (albeit, not as broad in terms of content) in other countries, such as Japan and Indonesia.

The addition of Viacom’s core channels and content on Movistar Play will strengthen the service’s position to compete against international and local OTT streaming services. It will boost the number of live channels on its platform. Triple-play subscribers in Peru, for example, will have access to a total of 39 linear channels, while subscribers in Chile will see 44 live channels. Access to live TV on mobile and connected devices is a key differentiator among local OTT providers in Latin America. 

Third quarter pay TV operator results for the LATAM region aren’t encouraging for pay-tv.  In Q3 2016, TV subscription growth was flat when compared with prior quarters - 65,127 versus 600,828 in Q3 of 2015.  Meanwhile, broadband households grew 497,169 in Q3 2017. Given the disparity of TV additions when compared with those of broadband, companies like Telefonica are ahead of the curve when it comes to adapting to marketplace change. 

The company has already launched Movistar Play as a standalone OTT SVOD offering in several LATAM countries where it does not have an existing pay TV footprint – Costa Rica, Ecuador, El Salvador, Nicaragua, Panama, and Uruguay. Like the other OTT additions in LATAM, consumers will continue to be the ultimate winners.

Like more developed regions in the world, monthly OTT SVOD ARPUs are much lower than those of traditional pay TV. In the region Netflix is getting an average of $6.16, and Claro Video is bringing in $3.66. The low cost of OTT SVOD combined with across the board increases in delivered broadband speeds will continue to put pressure on pay TV. Ultimately companies like Telefonica (Movistar Play), Televisa (Blim) and America Movil (Claro Video) who straddle content delivery in both Pay TV and OTT, will be in the best position to adapt to the changing marketplace.

 

Geography
Latin America
Research by Market
Media & Advertising
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