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Latin America Pay-TV Revenue to Reach $24.7B by 2020

The Latin American video entertainment market is a focal point of many industry analysts, as growth in most of the established markets within developed nations reached saturation. Broadcast TV and pay-TV offerings in Latin American countries have a significant upside potential.

Digital TV adoption is already growing in Latin America -- from only 18.1 percent penetration of TV households at end-2010 to just over the halfway mark by end-2014 and onto 94.5 percent by 2020, according to the latest market study by Digital TV Research.

Put another way, 132 million digital TV households (in 19 countries) will be added between 2010 and 2020 to take the total to 157 million. Digital Terrestrial Television (DTT) will provide half of the additional digital TV homes to be added between 2010 and 2020.

"Much of this growth is being driven by satellite TV, especially lower-cost and prepaid packages – although these subscribers are forcing down average ARPU figures," said Simon Murray, principal analyst at Digital TV Research.

Nearly 14.4 million pay satellite TV households will be added between 2013 and 2020, with 3.1 million more in 2014 alone.

Pay satellite TV penetration will grow from 9.6 percent in 2010 to 21.1 percent by end-2014 and onto 25.8 percent in 2020 -- indicating that much of the fast growth has already taken place.

Pay satellite TV is the leading digital platform, but primary FTA DTT will overtake it in 2015. The number of primary DTT homes will rocket from 4.3 million at end-2010 (3.0 percent penetration) to 27.1 million in 2014 (18.0 percent) and onto 71.1 million by 2020 (42.7 percent).

However, there are already signs that the economic boom may be faltering. The predicted economic slowdown in China has had an adverse knock-on effect for exports in Latin America, especially in countries such as Argentina.

Moreover, U.S. government sanctions have effected Venezuela. The positives are that Brazil is hosting both the World Cup (2014) and the Summer Olympics (2016), which will likely boost infrastructure build-out.

Brazil, Mexico and Argentina dominate the region. Brazil alone will add 37 million digital TV households between 2013 and 2020, with Mexico contributing an extra 15 million and Argentina nearly 7 million more.

Digital TV households will also increase rapidly in the other 16 countries covered in this report -- collectively adding 34 million digital homes between 2013 and 2020.

Pay-TV penetration will rise, but not as dramatically as digital TV penetration. Overall pay-TV penetration will reach 53 percent by 2020, that's up from 41 percent at end-2013 and 29 percent at end-2010. This means 28 million more pay-TV homes between 2013 and 2020, taking the total to 89 million.

Brazil will provide 11.6 million of these additions and Mexico 6.4 million. Puerto Rico will record 84 percent pay-TV penetration by 2020, with five countries above 70 percent. However, three countries will still be below 40 percent.

Pay-TV revenues in Latin America will be $4.5 billion higher in 2020 ($24.7 billion total) than in 2013. Satellite TV will continue to be the largest pay-TV platform, with revenues reaching $17.6 billion in 2020, up from $14.2 billion in 2013. Cable TV revenues will be $6.1 billion in 2020, up from $4.8 billion in 2013.

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