Cord cutting typically has been seen as an epidemic that only US pay-TV operators are dealing with, reporting more than 4.4 million losses (about 5% of its market) in the past three years as it’s declined to about 86 million customers.
But Brazil’s pay-TV industry has suffered even more.
Following losses of 311,000 subs in 2016 and 729,000 in 2017, preliminary numbers for 2018 show a further decline of about 550 million subscribers, reports Brazil’s National Telecommunications Agency (Anatel). The three-year loss? More than 1.59 million subscribers, a drop of more than 8%. In March, Anatel reported customer relationships had declined to 17.86 million, its first trip below 18 million subs for the first time in years. With the losses in 2018, the industry counts only 17.57 million subscribers.
Lagging economic conditions – as they did in the early days of cord cutting in the U.S. – have been an issue, but, just as in the bigger market to the north, the real issue is changing consumer tastes.
Netflix, for example, has seen stunning success in Brazil after its 2011 launch there. Despite slow initial subscriber growth, Brazil now has more than six million subscribers. A recent survey shows more than three-quarters of Brazilians say they have watched Netflix, and nine in 10 users said they were very or extremely satisfied with the service.
The market also is an extremely mobile-centric one, with more than 60% of Brazilians saying they use mobile devices to watch video, according to the 2017 Ericsson ConsumerLab report, creating opportunities for non-traditional multichannel operators.