Image: La Rosa de Guadalupe, Las Estrellas
The United States is the most mature and competitive entertainment market in the world. As such, media coverage surrounding the alarmingly rapid decline of linear TV in the US might have you believe that traditional pay TV is on its death bed the world over. Amid the ongoing “Streaming Wars,” such a narrative seems almost undeniable. In reality, traditional TV remains a central cog of the entertainment experience in many key regions (including the US!).
Many regions, such as Latin America, find themselves at an inflection point in which audiences are beginning to migrate to new TV destinations in notable numbers even as the old guard holds steady. But this transition shouldn’t be seen as a desperate diaspora; instead it is a learning opportunity. Streaming companies can use this window to observe content trends and nail down international strategy at a time when every major SVOD player outside of Netflix and Amazon Prime Video is unsure how to proceed outside of the US.
LATAM Platform Trends
From 2019 to 2023, the demand share for streaming original content in LATAM has risen a whopping 399% while the share for linear content has fallen 16%, according to Parrot Analytics. Now, linear (73%) still accounts for the bulk of TV demand vs streaming (27%) in the region, yet the trend is notable nonetheless.
Brazil, the fourth most populous country in the world, ranks 19th in demand growth for streaming originals (50.7%) in that time frame. In many ways, Brazil can be seen as a microcosm for the industry transition. According to Kantar IBOPE Media Ltda. CEO Melissa Vogel, linear content still dominates time spent watching video in Brazilian households at 79%, with free-to-air broadcasters leading viewership. Pay TV consumption remains 24% higher than AVOD and 17% higher than SVOD.
In the US between 2016 and 2021, when the market was going through its own digital revolution, virtual multichannel platforms (vMVPDs) recovered almost half of traditional multichannel subscribers lost to cord cutting, per Kagan. In public comments, Globo’s director of strategic partnership and distribution Fernando Ramos expects a similar shift but at a much faster rate in Brazil due to regulatory restrictions. This positions vMVPDs that provide linear access digitally as the first stepping stones in this transition. It has even led to some cross-company cooperation between TV providers in the region such as Claro Brasil, Vrio’s Sky Brasil and Oi.
This paves the way for major entertainment companies to focus initial streaming footholds in the region, from both an audience capture (vMVPDs are a higher priority than FAST) and content distribution perspective. Yet to do so effectively will rely on content concentration quality.
Language Preferences
The appetite for local content is largely driving the surge in demand for streaming originals within the LATAM region. Perhaps that’s not a huge surprise as 65% of people prefer content in their native language, according to a CSA Research survey. As technology and distribution have developed, it has democratized production quality allowing a greater number of creators to deliver programming in line with Hollywood expectations.
The share of demand for local streaming originals has increased steadily over the last five years, rising from 19% to 29%. At the same time, the share of demand for content from the US, which has long been the top exporter of programming worldwide, has fallen from 60% to 45%. (While international content that originates from outside of LATAM and the US has also grown from 21% to 26% in that span). Should these content trends follow their annual averages over the last five years, local language programming would over take US programming in 2026.
What makes this trend even more impressive and indicative of true audience behavior is the discrepancy in demand vs supply. While the share of demand for local streaming originals has increased steadily; local content supply share of streaming originals has remained constant over the last three years. Not only that, but the supply of local digital exclusive programming, which was a mere 2% last year, is dwarfed by the supply of US programming (49%) and worldwide content (49%). In other words, local language streaming original content is punching far above its weight by drawing significant audience attention despite a much smaller library.
Though the disparity in library size clearly plays a role, the average title demand for local language content in the first 28 days post-premiere exceeded US and worldwide content in major LATAM regions such as Argentina, Brazil, Colombia and Mexico in 2023. Audiences increasingly like culturally familiar material.
Genre Preferences
We now understand that while linear TV remains potent in LATAM, streaming is a growth business under the entertainment umbrella. We also know that within that trend, demand is surging for local language content as supply remains steady, suggesting additional investment is warranted. Now we just need to know where best to allocate that investment.
Reality, Comedy and Drama are genres that travel well in the LATAM region, indistinct of their country of origin. Animation also tends to perform well across the regional spectrum.
But if LATAM programmers are looking to deliver content that travels well globally, Children, Horror, Animation, Action & Adventure are also worth exploring in addition to drama. Unsurprisingly, Horror, Children, Sci-Fi, Fantasy and Adventure were in high demand but low supply in LATAM in Q4 2023 while Animation and Action were in high demand and high supply.
Looking at the 100 TV series with the greatest global travelability in 2023, it’s clear that genre-skewing content (horror,sci-fi, superhero, fantasy) and traditional action & adventure dramas (such as Netflix’s The Night Agent or Paramount+’s Taylor Sheridan shows) hold significant sway with worldwide audiences.
Conclusion
Latin America is not the only region that is following in the footsteps of the US’s transition from linear television to streaming. Similar shifts are occurring throughout EMEA, APAC and beyond. While there is no simple answer to replace the outgoing economic model with an equally fruitful new one, there are steps that can be taken to prepare. By understanding the migration of audiences from platform to platform as well as a region’s unique language and genre preferences, the entertainment industry can better position itself to capture the lost and transitional audience in a more fully digital ecosystem.
