Why media and advertising companies are prioritizing Latin America

Latin American is FAST becoming the new stamping ground for services like Pluto TV, owned by Viacom CBS. Paid streamers expanding into the market is nothing new: Netflix launched in Latin America way back in 2011 to reach a market twice the size of the one at home, and it remains the only subscription streamer with high penetration in the territory; Disney Plus launched there at the end of 2020. But Digiday reports that ad-supported streaming TV is becoming the option of choice for audiences across the region, so much so that the market is set to rival that of more established Europe. 

“If you look at the growth in streaming consumption and usage — both on the free and [subscription-based] side of things — it really has been taking off in a really substantial way in the last year. It’s now one of the fastest-growing video markets in the world,” The fastest, in fact. Kelly Day, ViacomCBS Networks International COO and president of streaming. Source: Digiday‍

Why Latin America?

Unsurprisingly, the rising popularity of the FAST model has had a multifold knock-on effect. The launch or imminent launch of new ad-supported streaming services means that Latin America represents a massive portion of media companies’ ad inventory. Competition in the region has also hotted up with TV providers offering alternative models or more compelling and relevant rosters of content vying for a piece of the pie. 

The surge in popularity of ad-supported formats confirms viewers’ willingness to access content for free in exchange for watching ads, highlighting the opportunity for cheaper and free ad-supported platforms to gain a market share. If content owners can localize existing content for the region, not only will there be a receptive audience, improved digital advertising infrastructures in the region, copious ad inventory, and advertisers ready to monetize that content will mean that returns have the potential to be large. It's a long game, though, because as promising as the market is in terms of viewership, the monetisation model still has some catching up to do.

Challenges for streamers and content owners in Latin America

Despite the surplus of ad inventory, advertisers are still in the phase of weighing up how to adjust their strategies. They’re comparing the returns and accessibility of traditional TV (which is still a cheap way to reach people) and digital platforms like YouTube, Facebook and the other burgeoning social media platforms with the FAST model which they consider to be in its infancy. As well as the opportunity to gain a share of the market among price-conscious consumers in Latin America generally, this period of transition suggests that free ad-supported digital platforms which are already established have a unique opportunity to reassert their selling point now – large audiences and cheap prices.

Lead image: Leandro Loureiro