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Daily News

Latin American Direct-to-Home Satellite TV Market to Grow
Dec 30, 2002
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Although severely affected by the spate of recent economic upheavals, the Latin American direct-to-home (DTH) satellite television services industry remains undeterred in its quest for stability and profitability, according to a recent analysis from Frost & Sullivan. The consulting firm reveals that revenues in this industry totaled U.S. $1.3 billion in 2001 and are projected to reach $2.8 billion by 2008.

The market is largely controlled by two equally successful companies: Sky and DIRECTV Latin America. While Sky has chosen to focus on a few key country markets, DIRECTV has attempted to capture a wider audience by spreading its business across several countries. However, the company is now working on adding new satellite capacity, mindful of the opportunities to be found in providing country-specific programming packages, according to the analysis.

Tailoring programming packages to suit the needs of a particular country seems to be the trend in DTH services markets around the world. Currently, although many DTH providers have shown encouraging growth in subscriber numbers, they are plagued by mounting operational and other costs.

"Given the differences in regulatory, licensing, and cultural issues and viewing populations, DTH service operators should focus on creating services that address each individual country market in order to succeed," says Patrick French, Frost & Sullivan analyst.

The advent of new, high-quality digital cable television (TV) systems further poses a threat to the DTH services market. To prevent customers from migrating to cable TV services, DTH providers must focus on developing a long-term relationship with them. By integrating interactive capabilities into basic service packages, they can give greater value and earn customer loyalty.

"The integration of interactive services is essential to remain competitive as more terrestrial service providers offer bundles of services - telephony, Internet access, and pay TV - in markets throughout Latin America," explained Mr. French.

On the brighter side, a growing breed of customers that are willing to pay more for a wider range of services bodes well for DTH providers. They have the requisite channel capacity and economies of scale of regional coverage to cater to a growing breed of customers that are willing to pay more for better services.

The following is a list of key industry participants: Cabletel; Cablevisión S.A.; CanalSatellite Caraibes / Vivendi Universal / Canal Plus Group; Casa Editorial El Tiempo S.A.; Cisneros Group of Companies; DIRECTV Latin America LLC; DIRECTV of Chile; Galaxy Brasil Ltda.; Galaxy Entertainment Argentina S.A.; Galaxy Entertainment de Venezuela; Galaxy Entretenimiento de Colombia Ltda.; Globo Cabo S.A.; Grupo Clarin S.A.; Grupo Galaxy Mexicana S.A. de C.V.; GRUPO TECSAT; Grupo Televisa S.A.; Hughes Electronics Corp.; Innova, S. de R.L. de C.V.; Intelsat; Liberty Media Corp.; Megacable S.A. de C.V.; Metrópolis-Intercom S.A.; Multicanal S.A.; MVS Multivision S.A.; Nahuelsat S.A.; Net Sat Serviços Ltda.; News Corp.; OpenTV; Organizações Globo; PanAmSat Corp.; Radio Cadena Iberoamericana (RTI); Radio Cadena Nacional (RCN); SatMex S.A. de C.V.; SKY Argentina SCA; SKY Colombia S.A.; Sky Multi Country LLC; Supercable; Tevecap S.A.; TiVo, Inc.; UnitedGlobalCom, Inc.; and VTR GlobalCom, S.A.

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