Author Anabelia Horbuz, Dataxis Latin America Analyst Anabelia Horbuz is Analyst at Dataxis NexTV, with headquarters in Buenos Aires. With more than eight years of experience in the market Telecommunications and Pay-TV market, Horbuz has worked as journalist in different magazines of the industry and Editor of Daily Newsletter de NexTV Latam. Table of Contents 1. TV Everywhere Definition 2. TVE Models 2.1 Operator’s TV Everywhere 2.2 Content-provider-focused TV Everywhere 3. TVE service distribution Table 1. TVE service penetration (%) over total subscribers (million) in Latin America. Seven countries. Q212 Chart 1. Distribution of TV Everywhere Services (%) over total subscribers. seven countries. Q212 Structure and methodology of the study This report is entitled ‘TV Everywhere in Latin America’ and it was drawn up in October, 2012. The study is made up of three chapters: the first offers a definition of TV Everywhere (TVE) concept, while the second chapter analyzes TVE models in Latin America and offers current profiles and offers in the region, both of content providers and Pay-TV operators. Information regarding TVE offer in Latin America has been collected from web sites, as well as press information and data provided to Dataxis by companies. The third chapter addresses TVE service distribution in the seven main Latin American markets (Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela). Such information show the subscriber potential to be covered by TVE platforms as a result of agreements entered into by Pay-TV operators in the region. Figures of total Pay-TV subscribers included in this report are as of 2Q12 and have been gathered from public sources. In cases in which certain figures were not available, such figures were calculated by Dataxis by means of its own methods. Likewise, TVE service distribution figures have been prepared in virtue of this report according to public sources and own methods. Executive Summary Dataxis had identified 14 TV Everywhere (TVE) platforms in Latin America, which include those already operational and those announced to be launched soon. ESPN was one of the first firms in launching its TVE service – ESPN Play- in the region. In the seven main Latin American markets (Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela), ESPN Play had closed agreements with different Pay-TV operators, which jointly accounted for 21.4 million potential users, that is, the 47.3% of total Pay- TV subscribers – recorded as of 2Q12 – in the analyzed markets. In turn, Muu, TVE platform owned by Globosat, main Brazilian programmer, was available for subscribers of NET, main MSO in the country, (in addition to Net Fortaleza and CTBC), thus enabling coverage of 5.2 million potential users, who accounted for the 11.5% of total Pay-TV subscribers in the seven analyzed countries. Fox Play came third. It was launched in September 2012 and had already closed agreements that would enable the firm cover a 10% of total Pay-TV subscribers in the seven analyzed countries. The following were available options for Premium subscribers: Moviecity Play, Telecine Play in Brazil and Hot Go, among others. According to Dataxis estimates, the 5.4% of total Pay-TV subscribers in the seven analyzed countries would rely on potential access to Moviecity Play, thanks to the agreements the operator had closed in the region. In 2012, a legal OTT offer universe was drawn up, which made content providers and Pay-TV operators deploy TV Everywhere strategies aimed at counteracting a likely advancement of these initiatives. TVE only granted Pay-TV subscribers access to online content through previous authentication. Therefore, TVE platforms adjusted to Pay-TV industry’s value chain and introduced themselves as added value products aimed at retaining subscribers. In general terms, TVE services were available for multiple connected devices. In those cases in which the aforementioned did not happen, firms announced that they were developing applications that would enable them complete a multi-screen strategy. 1. TV Everywhere Definition TV Everywhere (TVE) concept made reference to an identity authentication process to be carried out by Pay-TV subscribers with the purpose of being authorized to access to certain “online” contents, through different devices; which also assumed out-of-home access. Therefore, TVE only granted Pay-TV subscribers access to online content. TVE’s greatest ambition was to replicate the traditional Pay-TV offer on the Internet, thus Pay-TV channels’ being TVE’s main content. Therefore, TVE platforms adjusted to Pay-TV industry’s value chain and introduced themselves as added value products aimed at retaining subscribers, in face of OTTs’ online content offers. 2. TVE Methods In 2012, a legal OTT offer universe was drawn up, which made content providers and Pay-TV operators deploy TV Everywhere strategies aimed at counteracting a likely advancement of these initiatives. Though it was an incipient offer, two TVE models were identified: • Operator’s TV Everywhere: Pay-TV operators, pure and those from telecommunications segments, had reacted in face of OTTs’ advancement by launching Internet video offers. As in the case of legal traditional OTTs, Pay-TV operators offered a copyright-protected-content catalog that offered Internet access (fixed and, eventually mobile). In Latin America, the access to such content was free but only for those relying on Pay-TV subscriptions. • Content providers’ TV Everywhere: Different Pay-TV content providers offered part of their content under On Demand modalities, from their own Internet sites. Access for users was free (though not necessarily in all cases), but users needed to be subscribed to some Pay-TV operator with whom the content provider held an agreement. 2.1 Operator’s TV Everywhere 2.1.1 VTR The Chilean main MSO was one of the pioneers of the region in relying on a TVE offer. The service was named Go VTR, and had been launched in November 2010. The product was available at no additional cost for Pay-TV clients. The content administration platform was provided by Admotion. In order to gain access to the system, clients needed to the same user’s name and password they utilized to administer their products in the operator’s Virtual Branch. The initiative was introduced as a multi-platform, which offered access from any connected device, including mobile devices. It is important to bear in mind that VTR stepped in the mobile market, with its own network in 2Q12. VTR launched its GoVTR platform with a reduced programming offer: six live channels (NAT Geo, Nat Geo Wild, Utilísima, CNN Deportes, Vive Deportes and El Canal de las Estrellas) and some additional 3 “on demand” channels (MTV Revolution, Nick Turbo and ESPN Play). As of 3Q12, VTR had reduced its offer and relied on three live channels (CNN Chile, Vive Deportes and ESPN3). However, the offer of “On Demand” channels had increased its options (Zona Latina, Glitz on demand, Barça TV, Vía X and ESPN Play). In turn, the “Premium” section included access TV Everywhere Moviecity Play and Hot Go services (the latter targeted to the adult audience). Go VTR site also offered the streaming access to Chilean movies, series, music special shows, children content and sport material. 2.1.2 Movistar Peru In 2Q12, Movistar Peru launched its Movistar Video platform, available at no additional cost for its Internet clients. The initiative offered live soccer games of local tournaments (over which Telefónica held rights; and such games were broadcasted through an exclusive thematic Pay-TV channel, CMD), in addition to qualifying games of the Word Soccer Cup 2014. The site also offered access to CMD channel in YouTube, the Pay-TV programming guide and TVE ESPN Play and Moviecity Play services. Upon its launching, access from mobile telephones was not available, but the firm stated that it was working on such option. 2.1.3 DirecTV The so-called ‘DirecTV Sports’ sport channel of the DTH operator DirecTV Panamericana relied on a portal by means of which Spanish Soccer League games, among other sport options, were broadcasted live and through streaming. In order to see such events, DirecTV subscribers needed to be subscribed to MiDirecTV; the self- service platform was targeted to DirecTV clients. Access was restricted to only one game per date. In October 2012, DirecTV Sports Streaming service was still in its Beta development stage. DirecTV released the platform in April 2012, together with the beginning of 3D broadcasting of Barcelona-vs.-Real-Madrid game. 2.1.4 Dibox Play The Argentine Red Intercable association –which gathers 237 cable operators of the interior of the country- launched, for its members, its Dibox Play portal, which gathered TV Everywhere proposals of content providers. At the beginning, only Moviecity Play was available, but ESPN Play and HBO Go were expected to be added; once the latter arrived in Argentina. The system run through prior authentication. The entity had announced the launching of Dibox Play in June 2012. Dibox was the trademark for Red Intercable’s digitalization system launched in 2007, which enabled small and medium size operators to move forward with this technological option at accessible costs. As of 2Q12, Red Intercable gathered 237 firms in 500 localities. In turn, 150 cable operators in 300 localities had already digitalized with Dibox. 2.2 Content-provider-focused TV Everywhere 2.2.1 ESPN Play In 2010, ESPN launched ESPN Play in Latin America. Said TV Everywhere service offered access to the firm’s online content. Users willing to enter the portal needed to be subscribed to some broadband Internet provider. In 2011, the firm widened the concept for Pay-TV operators by adding DirecTV Panamericana. The platform offered access to live and recorded (VOD) events, either individual or simultaneous, with an option to apply pause, rewind or forward functionalities.