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Paid TV stagnates against online options
Posted On 23 Feb 2018
Ecuadornews:
The advancement of new information and communication technologies, added to the infrastructure installed in the country that has allowed a great penetration of the Internet in recent years, opens the door to a high consumption of audiovisual products, such as films, series or documentaries, enhancing the possibility that the user chooses the contents that he wishes to see.
The challenge of paid television is to transform its entire structure to survive. Television paid by cable or by satellite connection in the country has lost dynamism in recent years, despite the reduction in service costs.
According to data from the Agency for Regulation and Control of Telecommunications (Arcotel), between 2005 and 2015 the number of subscribers to the paid television service grew by an annual average of 21%, but that pace stagnated in the following two years. In 2003 the number of subscribers to paid television was 177,427; in 2015, the figure rose to 1.3 million, which has not changed until December of last year
The operator DirecTV to December 2016 registered 458,584 subscribers, while in the same month of 2017 registered a slight reduction, with 445,925 customers. In the case of Claro TV, as of the last month of 2016 it had 34,706 subscribers, while in 2017 it was reduced to 28,197.
The only company that registered more clients between 2016 and 2017 was the National Telecommunications Corporation (CNT) with an increase of 366,405 subscribers to 376,640. Iván Sánchez, professor of Networks and Telecommunications at the University of the Americas (UDLA), mentioned that just three years ago, paid television had a penetration of 914,455 subscribers, of which 3.78% used a terrestrial encoded technology; 38.16% preferred the cable connection and the 58.06 satellite television, according to 2014 data from the National Institute of Statistics and Census (INEC).
“It was then possible to notice a growth in this service due to the fact that there was a decrease in costs for the user to acquire them. However, Internet television has been growing thanks to the penetration of new technologies in the country. ”
Mauro Ascázubi, consultant in user experience, estimates that although there are no figures in the country of how many people have migrated from the paid television service to Internet television, the amount could be high, since prices are more affordable, there is a better quality in the reproduction, it is not dependent on a cable connection since it can be accessed from the different mobile devices.
In addition, internet platforms focus their model on the customer experience. According to their web portals, DirecTV’s current monthly plans range from $ 28.34 to $ 44.31; Cable TV from $ 15.80 to $ 48.99; and those of CNT, from $ 17.00.
Video on demand Web pages with audiovisual content record thousands of visits daily and little by little gain ground to traditional television. This goes hand in hand with access to the new Information and Communication Technologies (ICT), which have developed by leaps and bounds in recent years and have restructured forms of entertainment.
In Ecuador, access to ICT is reflected in the latest figures from the Arcotel that show that the penetration of the fixed internet in households went from 3.35% in 2010 to 10.61% in 2017. The mobile internet entry had even more strength, since it went from 2.35% seven years ago to 52.50% last year. In total there are 10.6 million active accounts with internet service.
These figures place Ecuador as the sixth developing country with the best Internet Affordability Index. In the offer of television by Internet, without schedules and with exclusive contents, there is a wide range of free or paid channels, like Netflix, Amazon Prime Video, HBO Now, Directv Play or Claro Video with plans that cost between $ 6.50 and $ 14.99.
“Netflix offers the user the possibility of paying $ 10 a month to use their programming, which can be viewed at any time and place with an internet connection, as many times as you want, in the order and frequency you want.
There is nothing to record because everything is on the platform, “said Sanchez. This type of market, known as video on demand (VOD), in Latin America reached 10.2 million paid subscriptions at the end of 2015, according to the report of the specialized firm Dataxis and in the case of the Neftlix platform, it now exceeds the 100 million subscribers worldwide, Ascázubi emphasized.
He also argued that now the viewer is not passive, that is, he does not wait for the contents to be offered, but he searches for them. It is for this reason that the cable companies and the channels themselves must supply what they want and offer it in real time.
Santiago Barrionuevo, president of the Association of Medium and Small Cable Operators of Ecuador (Asocope), explained that the sector he represents cannot remain motionless before the advancement of new communication and information technologies because that would mean disappearing and therefore they must reinvest in infrastructure and technology.
He explained that the growth of television and video platforms over the internet under the VOD system initially generated doubts about the possible loss of the market. However, now considers that there is a complementarity between both systems. “If the subscriber chose only to see Neftlix, he would not have access to news or sports services and on the contrary, if they only buy cable television he would not have access to an offer of movies and a la carte series. We are living together in a natural way, “said Barrionuevo.
However, he acknowledged that if the VOD platforms, due to their growth, acquire for example the soccer rights of either the national or international league, there would be a great risk to their market.
Despite this scenario, the businessman believes that cable operators must adapt. Thus, several companies offer parallel models and liberalize content on the internet or offer packages that include telephone line and internet access. Ascázubi concluded that the challenge of paid television is to reinvent itself and renew its old structures although “a transformation at that level is difficult”. This newspaper requested interviews with DirecTV and CNT but the request was not answered.
Panorama
A varied offer
The offer of television by Internet is varied and it goes from free channels that offer mainly educative contents and prepaid platforms that count on series, films and exclusive documentaries of each signature.
52 percent of the people in the country have a mobile internet account and 10.61% have a fixed connection.
A market that does not grow
The large and small cable operators have not lost market in the country, but their growth has stagnated, since 2015 they register 1.3 million users.
The soccer tournament is also followed via web
Although soccer is the main sport in the country, whether to practice it or to enjoy it; again it returns to the controversy and this time for the transmission of the matches of the Serie A of the professional tournament.
This problem, which prevents viewers from seeing the different matches of their favorite teams normally, is traversed by different economic, social, judicial and even political aspects. The core of the problem is in an open competition by the Ecuadorian Football Federation (FEF) to grant the transmission rights of the championship matches, which would have been won by the Uruguayan company GolTV for a period of 10 years.
However, other companies questioned the transparency of the contest. Directv cable operator, market leader in this business segment, would also have participated in this contest, but after not being favored, presented its challenges to the awarding procedure, including a resource before the Superintendence of Market Power Control (SCPM) for this entity to suspend the contract signed between the FEF and GolTV, which was not accepted by the institution.
Even the former presidential candidate, Abdalá Bucaram Pulley, came to file a judicial appeal to resolve the situation, as GolTV had already advanced negotiations with the National Telecommunications Corporation (CNT) for the transmission of the matches, through its services of cable television.
However, in the middle of this month, CNT issued a statement clarifying that it has not signed any contract with any programmer and that it is waiting for the pending legal issues to be resolved. Meanwhile, the first date of the tournament began last weekend and only two games were broadcast by open signal and four by cable operators, the same ones that were simultaneously replicated by several Internet TV pages. The future is still uncertain as long as the legal issues are not resolved, until the transmission of the meetings is estimated to be carried out in the same way for this second date.
For Professor Fernando Carrión, who has conducted several studies on football, the situation that has been reached reflects a crisis of leadership in the ETF, which “was built on clientelist issues and even out of legitimacy, which has eroded its structure. ”
In this situation, according to the expert, those who lose are mainly the fans, the players and in itself this sport that enjoys popularity in the country and in the world. “It is the darkest hour of Ecuadorian football because we started the tournament after a crisis with the referees, who did not want to whistle the matches if their salaries were not canceled; Then we went into the question of television rights, a situation that was evidenced by a lack of interest in the matches and the results, “he said.
To remedy this situation and prevent it from happening again, Carrión assures that a total restructuring of the ETF is necessary, which implies the need to change the directive. In addition, “there must be specific regulations so that there is no client management, but a transparent structure so that when these types of bids are made, the bases of the contests are clear.”
Santiago Barrionuevo, president of the Association of Medium and Small Cable Operators of Ecuador (Asocope), an institution that brings together some 220 of these companies, acknowledged that it has always been of great interest to be able to count on the broadcasting rights of football matches, since its biggest market is in provinces in urban and rural sectors, where these massive shows are very popular.
The businessman said that, despite being out of the legal problems that are being aired in the Ecuadorian justice system, they have negotiated with GolTV, reaching a pre-agreement for the transmission of the parties and they are only waiting for the court ruling.
Regarding the fees to be paid in case of reaching an agreement, Barrionuevo said that it should be the same value that the other companies are paying and there should not be any discrimination. He said that the best way to find a way out of this mess is dialogue. (I)
Source: https://www.eltelegrafo.com.
