Television has opened the way to streaming, radio has opened the way to the podcast, and some opinion leaders have turned into content creators on various social platforms. There is no doubt that media consumption in Latin America has changed, serving up some fairly interesting challenges. How can brands remain relevant? Which media are really worth investing in?

As a supplement to our article on key preferences among Latin American consumers in 2023, here we will provide the most prominent changes in media consumption in Latin America over the past year, exclusively among Latin American Internet users. We will also show how marketing and advertising experts in Latin America are reacting.

#1: Fragmentation Makes Tracking Very Challenging

With the proliferation of streaming platforms, measuring TV viewership in Latin America has become a more complex matter, with no one particular organization or entity possessing all of the data needed to determine how popular programs are and thus helping marketers understand where to allocate their advertising budgets for this medium.

Beyond linear TV, which still commands 97% penetration in Latin America, there is also YouTube, SVOD (subscription-based video on demand, like Netflix), AVOD (advertising-based video on demand, like Pluto, Roku Channel and Vix), and FAST (free, ad-supported television, which features a programming lineup much like linear TV.) As a result of all of these options, viewers in Latin America are becoming platform-agnostic: they care about their preferred content, not so much where they watch it. The challenge is compiling and harmonizing these different sources of viewership—there isn’t a total video measurement source in Latin America that can tell us the entire size of premium video accurately and its impact on advertising.

As part of this process, viewers can shift platforms while still staying with a channel. For example, subscribers to Pay TV could cut the cord and stream HBO Max with an individual subscription to watch their favorite shows. How would that viewership be tracked?

In addition, it’s crucial to carefully track TV consumption, since there are different data sets being published and this is still a hugely popular medium that can provide excellent brand exposure via ad investment. Kantar IBOPE Media’s numbers indicate there has been a drop, but not a drastic one:

As you can see, Argentina shows no change between 2020 and 2022 in both free and pay TV, while other markets show moderate but not drastic changes. The numbers for all 9 LatAm markets measured by Kantar demonstrate drops of 11% for free TV and 8% for pay TV. However, as we mentioned earlier, viewers could be shifting platforms while still watching the same programs: this fragmentation is the ongoing challenge in the media world as the industry’s top strategists search for a way to accurately measure viewership across all of the multiple platforms that are currently available in Latin America—and the world, since media fragmentation is far from being an exclusively Latin American issue.

#2: Gamers Are a Great Segment to Leverage

Although a video game is not a media channel as such, it is an important way to reach consumers, especially if we consider that gamers not only play, but also use Twitch and YouTube to watch other players in action, and in fact follow their channels faithfully. It is also true that players use their consoles to watch TV via streaming services.

In any event, this is a significant audience in Latin America. One in two Latin American Internet users play video games,[1] reaching a level of 315 million users in 2022 (a 5% increase over the previous year).[2] Estimates put the video game market in Latin America at around US$8.4 billion,[3] and its impact on media consumption has been significant:

• In the fourth quarter of 2021, consumption of video game streaming on YouTube accrued more than 1.3 million hours of consumed content.[4] In 2022, the Latin American video game streaming audience reached 75.5 million.[5]

• E-sports players participate in events that have even been recognized by the Olympic committee. Earnings from e-sports in South America will reach US$23.6 million in 2027.[6]

• One in five Latin American gamers use their console to watch streaming services and live TV,[7] a year-on-year growth of roughly 15%.

• It is estimated that one in two Latin Americans play on mobile apps (50%),[8] a figure that reaches 75% in countries like Mexico.[9] Of them, 62% are willing to watch advertising in exchange for rewards.[10]

• Discord is used mainly by internet users in Chile (17.8% penetration), Argentina (17.1%), Brazil (16.4%), Mexico (12.9%), and Colombia (10.3%).[11] Other top social networks for gamers include Snapchat, Twitch, and Reddit.

• Children and teens in Latin America: an estimated 65% of them consume video games, either with consoles or cell phones.[12]

At the same time, video games in Latin America are permeating other more leading-edge layers of media consumption, specifically the metaverse. The foremost pioneers of the metaverse, like Roblox or Epic Games, are both major video game developers. Players in the metaverse are still a developing segment with considerable opportunities. A mere 8 out of 100 Latin American Internet users participate in the metaverse, but 1 in 3 would be interested in doing so.[13] Brazil has the highest penetration of metaverse players, equivalent to 15% of internet users.[14]

#3: Netflix Will Lose Share over the Next Few Years

Streaming is the main catalyst for the fragmentation we are seeing in online video. Netflix is still the leading OTT provider in the region. In 2022, data from GWI estimated that 79% of Latin American Internet users watch Netflix, followed by 43% who watch Prime Video, and 41% who watch Disney+. [15]

The relevance of OTT will be such that in 2027 there will be an 86% increase in paid subscriptions in Latin America compared to 2021, from 75 to 139 million. [16]

Netflix, however, will see a falling market share, as forecasts have been pointing to since 2021. In 2027, it will have a 41% share of earnings in the region; whereas in 2021 it had a 72% share.[17]

#4: AVOD Will Open the Door to Premium Streaming Channels

Until recently, marketers could invest their budgets with Pluto and other streaming channels that follow the advertising video on demand (AVOD) model but could not reach the millions that watch Netflix, Disney+ and other channels that used the SVOD (subscription video on demand) model.

Globally, 89% of advertisers would consider investing in advertising with SVOD providers[18]

But that has changed. In November 2022 Netflix began to incorporate a subscription model with advertisement in 12 countries, including Mexico and Brazil. Other companies, such as Disney+, HBO Max, and Paramount+, are likely to incorporate this model in 2024.

#5: The Shift of Paradigm in Traditional Media

In 2022, while the least used digital media (audio streaming) now has a penetration of 70% among Latin American Internet users, the most used traditional media (street advertisements) has a mere 45% penetration, according to AMI analysis with data from IMS in 2022.

But it’s not as if traditional media has disappeared. Instead, as marketers know well, a lot of it has moved to the digital realm: newspapers still command strong audiences, but online, and the same could be said for radio, while any number of channels that are popular on linear TV offer streaming options. As such, what was a traditional media campaign with legacy outlets could well be a hybrid campaign in both digital and traditional media, or simply a campaign on newspaper sites with banners, native advertising or other options. The paradigm shift to digital is perhaps most obvious with household devices: in Mexico, 95% of households have a television and 95% also have a cell phone, supplemented by other digital devices such as consoles, tablets, and laptops.

Whatever the situation may be, ad spending in traditional media has grown very little or has remained the same in Latin America, whereas spending on digital advertising has not stopped growing. In fact, spending on digital advertising in Latin American economies is higher than the global average and that of countries like the United States, India, France, and Germany:

#6. Audio Streaming Remains Relevant

Latin American Internet users spend at least two hours a day listening to music on digital platforms. In fact, three, if we add podcast consumption to the mix.[20] According to GWI, it ranks second among the activities online users spend time on, after social networks (average of 3.5 hours a day). Most music consumption occurs among Internet users aged 25 to 34.

Time slots, however, do play a fundamental role in music consumption. IMS data [21] show that peak audio consumption occurs after three p.m., with a decrease at around eight p.m. Traditional radio media, on the other hand, is listened to more in the morning, between 6 a.m. and 12 p.m. In any event, since 2021, audio streaming has taken the lead over radio, at least in terms of advertising earnings in Latin America. The firm Dataxis [22] estimates that, by 2026, investment in digital audio will reach US$100 million in earnings:

Next Steps

Contact us to find out more about how we can help your with a study of Latin American consumers, including their media consumption, payment methods, shopping preferences, and other data that you can use to benchmark opportunities, compete more effectively or achieve other strategic goals. We’ve conducted more than 600 studies of Latin American consumers over the 30 years we have studied the region, and you can find out more about that work here.

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Sources

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