Castro: ‘The VOD model is not 100% defined yet, and we are still trying to imagine it’

Another of the panels that were developed during the second day of Nextv Series South America was called ‘The future of linear and VOD programming in the D2C era’, in which topics related to the impact of the arrival of the main D2C platforms at Latin America; the new role of cable operators (if they must be aggregators or access providers); the value of local operators and the future of small TV networks; among other related issues.

The panel of industry experts gathered by Dataxis for the discussion included Joe Fregoso, Business Development Director, Americas at Mediagenix; Gustavo Castro, Head of Content at Telefonica Argentina; Edwin Elberg, Senior Director of Entertainment and Connectivity Product Development at Liberty Latin America; Pablo Ignacio Acha, Content Manager at Tigo Sports; and Diego Rodriguez, Vice President of Operations at AMC Networks International Latin America.

According to Elberg, ‘the disruption of this OTTs and on demand content offer has forced us to reinvent ourselves and go from being content aggregators to super aggregators’. The executive also explained that ‘the value we have lies in the ability to understand very well all the content that is available; as well as what it is that consumers want to watch right now; and support them in their experience of discovering and enjoying this content, regardless of whether it is linear, non-linear, OTT, replayed, or any type of content’. Likewise, Castro affirmed that ‘the distribution industry has a lot of investment. The most important thing is to think about what is going to happen in the future because, otherwise, it does not make sense’. The Telefonica Argentina executive said that ‘we started in Argentina in 2010, thinking in a context in which the possibility of offering linear TV did not exist. We started with a VOD model, and then we added the TV, and now we are in a ‘mixed model’. Today, we are thinking about what is going to happen with the channels (if we are going to reduce the number of channels to be more efficient and aim more towards what the customer wants)’. Castro also opined that the VOD model ‘is not 100% defined yet, and we are still trying to imagine it’.

Regarding the main challenges in this transition, Fregoso stated that ‘our industry is no longer only focused on linear models or VOD in an exclusive way. It is a hybrid model, and being within this hybrid model has many complexities’. The executive mentioned the problem of content rights, and reported that ‘it becomes very complex, because there are more and more screens and distribution platforms, which are associated with different business models’. The Mediagenix executive also stated that ‘in the future, there will be even more complexity in the industry, because agreements are also changing. We are in an industry that moves very fast, and we cannot be thinking about what the market needs right now, but about what it will be needing next year; in how the models are going to change and are changing; where are our audiences going to be; and how we can help deliver the content’. 

Regarding the role of the channels within the platforms, Rodriguez said that ‘today, the operator must be in a hybrid model, where it offers linear and non-linear channels. During the pandemic, AMC channels have grown in ranking in Latin America, and we have noted very interesting numbers in terms of on demand content reproductions, related to channels or brands that are not among the highest rankings in the market. This way, the executive indicated that ‘contents of the Europa-Europa channel have had more than one million reproductions on platforms such as Flow’. In addition, he reported that ‘we are seeing a decrease in linear channels in terms of screen and display competition compared to on demand, but they are still valid’.

‘Currently, in Tigo we are already offering bandwidths of 20, 30, 50 and 100 megabytes, which allows us to explore other horizons such as VOD and OTT. We see that a sports channel in HD with the rights of Bolivian football (Tigo Sports), in addition to a multiplatform channel, is the first step on this path, which will then allow us to explore other platforms, other services (such as PPV, which in Bolivia does not exist). I see that the true convergence is going to take place in the migration that we are taking to Next TV – it is already in Colombia, Guatemala, and it is developing in Bolivia-. They are two-way STBs, which would have the Tigo Sports app embedded. The true path is in our convergence. Through it, we are going to generate greater adoption, supported by the entire telco structure that we have’, said Acha. He also reported that ‘content should not be based on quantity. We have successfully tested giving the consumer what they demand. We know from the app what they consume, at what time and what content they like and, if we fail, we remove it and start over; and people accept it’.

According to Elberg, ‘D2C, on its own, is an interesting alternative for audiences who have specific tastes for one or two content sources. When there is an audience with heterogeneous tastes, as is generally the case, an ecosystem is required where the different contents coexist and we can harmonize the experience that we deliver to the consumer. Finally, the consumer is the one who decides. As super aggregators, we must be able to deliver to the consumer what they want to watch, when they want to watch it, and in the most appropriate way for their current situation. I believe that the future is on the side of this ecosystem, mounted on structures of super-aggregation’.

Regarding the role of data in the process, Castro assured that ‘it is not only about recommending what we know that the consumer likes, but about recommending what the consumer likes. When we use the content recommender based on previous consumption patterns, or consumers with similar tastes, what we do is play it safe, that is, to recommend what we know the consumer likes. We are missing how to discover new content to offer the client, which, based on artificial intelligence, big data and other models, perhaps we can enhance’. Similarly, Rodriguez mentioned  AMC’s experience with QR codes that they implemented in linear and on-demand channels, and assured that ‘they create added value to users, who become more familiar with the brand and the product, and we began to have information on user loyalty ”.

‘We must be careful when trying to monetize for something that the customer feels they are already paying for. We must find the right balance between the monetization between premiere titles that have a higher cost, and the experience of the customer, who expects to easily find something to watch on the platforms as a result of the bill they are already paying. We have the possibility of monetization, and artificial intelligence technologies can make it easier for us to find a much more direct link to what the client wants to watch, but if the client is going to get frustrated because all the content that we recommend is something that they have to pay for, I prefer not to have additional income’, said Elberg.