DirecTV's Latin America Pay-TV Is Booming

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While the pay-TV industry is saturated in the U.S., Latin America market is booming and has been driving the growth for DirecTV. The company has more than 10 million subscribers in the region and has been growing at an average rate of 25%. Earlier this month, the company launched its on-demand video services in Latin America, which will help attract more customers. However, the challenging macroeconomic situation in the region remains a concern in the near term.

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DirecTV offers satellite-based digital TV services to Latin American households. According to our estimates, Latin America business contributes more than 20% to the company’s value. The pay-TV revenues from the region have grown at an average rate of 30% in the past six years. According to a report by Digital TV Research, DTH will continue to be the largest pay TV platform in Latin America with revenues reaching US$20.1 billion in 2018, up from US$13.4 billion in 2012. The growth in Latin America digital TV will reach 84% of households in the next five years. This will translate into 134 million digital television households by the end of 2018. Satellite TV is poised to grow in the region as most of the Latin American markets lacks a developed wireline copper and coaxial-cable infrastructure. The following chart indicates the penetration of different forms of pay-TV services in Latin America.