- In Brazil, Netflix and YouTube are consistently the first choice of video services, across all devices. Collectively, 28 percent of respondents claim they turn to Netflix first when looking for something to watch, followed by YouTube at 24 percent.
- More than 63 percent of internet users in Brazil, between the ages of 18 and 64, had access to Netflix, of which 86 percent claimed to use the service at least once a week.
- Along with growth in over-the-top (OTT) content consumption, the installed base of internet-connected devices grew by 10 percent, rising to more than 310 million devices in 2018.
- One out of four respondents have a personal computer connected to their primary TV screens, while 35 percent claim to mostly use their smart TV apps to access video content on their primary TVs.
Brazil is the fifth-largest media market in the world, after China, India, the U.S. and Indonesia. Understanding what’s driving video subscription and consumption behaviors is a crucial step in successfully mapping the future of the country’s content and distribution businesses. Connected consumers in Brazil are interested in viewing content in non-traditional ways, which will put added pressure on traditional content and distribution systems when the economy recovers.
OTT video on-demand (VOD) is becoming ubiquitous around the world, and Brazil is no exception. The country has been experiencing a significant economic slump in recent years and, like other Latin American markets, Brazil’s legitimate pay TV and OTT subscription video-on-demand (SVOD) service providers have seen subscriptions fall or suffer reduced growth. Laptops, tablets, streaming sticks and other devices increasingly pose a threat to cable TV and other traditional TV services.
Netflix and YouTube are consistently the first choice of video services, across all devices. When IHS Markit reviewed pay TV households, fewer than 50 percent of Sky Brasil households selected the service as their first choice, and they were less likely to have a first choice, while 40 percent of Net Servicos households responded similarly.
In terms of perceived quality, Netflix and YouTube were significantly ahead of their rival pay TV providers in the following categories: ease of use, flexibility (i.e., “ability to watch what I want when I want”), largest catalog of content, quality of content, and value for the money. Although this finding is a victory for OTT providers, Netflix and other services need to obtain enough local language content to remain relevant in the long term. Despite the vast library of foreign content Netflix has to draw upon, the amount of Brazilian and Portuguese content remains minimal, which is why the company is now partnering with local producers to boost local content in its library.
Like others around the world these days, Brazilians are enjoying the choice and flexibility offered by online providers, compared to traditional pay TV services. As the Brazilian economy continues to improve in the coming years, growth in pay TV households is expected to resume. At the same time, a surge in growth is expected in the OTT market. The real danger to Brazil’s pay TV industry is that people might cut the cord entirely and migrate lower-cost OTT providers.
The results of our latest survey indicate that this is a distinct possibility, especially given that pay TV monthly average revenue per user (ARPU) can cost five times or more than the monthly ARPU of Netflix. Subscription sharing also seems to be a profound problem in Brazil, since nearly two-thirds (63 percent) of survey respondents reported having access to Netflix, while Netflix subscriptions penetrated less than one-quarter of all broadband households.
As OTT services siphon higher audience shares away from traditional pay TV, lowering pay TV revenues, Brazil’s content creation could also suffer, as it has in other countries. However, the Brazilian government isn’t standing idly by. Both the Congress and Senate proposed bills in 2018, which would not only regulate the OTT video business, but also return a portion of each company’s gross revenue back into local production.
Connected Devices & Media Consumption Intelligence Service
This IHS Markit service combines key addressable market information with in-depth consumer survey data and analysis to understand the interplay and overlap between device ownership and media consumption with demographic breakdowns. The data above is based on a nationally representative sample of 2,401 internet users, aged 18 to 64, in Brazil.