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How long will live TV live? New formats and traditional viewing in Brazil

66% Share of Brazil’s national advertising dollars captured by TV

Since its introduction in Brazil, live TV has been a major entertainment source and one of the most influential opinion makers in the country. Free-to-air TV was launched in the 1950s and reached into thousands of homes by the end of the 1960s. Today, TV ownership is almost universal. It reaches 95 percent of Brazil's population and transcends socioeconomic boundaries in ways that other forms of entertainment do not. Its unparalleled reach has given live TV the upper hand in advertising. In 2010, over 60 percent of national advertising dollars were captured by TV, and this number grew to 66 percent in 2012. 2014 is poised to set another advertising record with the return of soccer's World Cup to Brazil and the certainty that virtually all of the country's eyes will be glued to their television sets.

TV reaches 95 percent of Brazil's population and transcends socioeconomic boundaries in ways that other forms of entertainment do not.

Brazil is a nation of broadcast consumers, and its citizens' love of sports and soap operas has presented live TV with a captive audience. Recent technological movements, however, have already begun to reshape television consumer habits in this South American nation. Brazilians are no less passionate about soccer or primetime dramas, but their options for additional content and when and where they watch it are skyrocketing. The introduction of cable TV in the 1990s began the cannibalization of free-to-air TV. More recently, non-linear video - e.g., video on demand (VoD), watched also on devices such as mobile phones and tablets via the Internet - has helped erode numbers even further.

Live TV still dominates but is giving way to other formats

McKinsey's 2013 iConsumer Brazil survey shows a clear shift away from live television. Between 2011 and 2013, pay-TV usage increased 12 percent year on year and mobile Internet usage increased 27 percent, contributing to live TV's fall from 67 to 47 percent of all video consumption. Although it still represents the most significant part of the Brazilian video diet, it does not represent the majority anymore.

Brazilians are no less passionate about soccer or primetime dramas, but their options for additional content and when and where they watch it are skyrocketing.

Another segment losing a lot of traction is recorded video, corresponding to the decline of more traditional recording devices like DVRs and showing a negative CAGR of 21 percent between 2011 and 2013. On the other hand, viewing from non-linear video sources, such as VoD, increased significantly during this time frame (CAGR of 68 percent). The rise in non-linear usage on the set-top box in Brazil is driven largely by pay-per-view events - for example, Brazilian soccer league matches, on-demand movies, and martial arts competitions. Over-the-top (OTT) Internet and time-shift video modes have shown the most significant growth with CAGRs of 103 and 137 percent respectively between 2011 and 2013. While these formats are used disproportionately more by affluent Brazilians, their growth rates in Brazil still far exceed those in the US by more than five times.

Mobile phones and tablets are emerging as video platforms

How to watch video is only one aspect of the technology and consumer habits environment. The other key element is the devices viewers use. iConsumer data shows that the share of attention for (time spent using) mobile phones and tablets increased from 2011 to 2013.

TV has lost 8 percent of its attention - based on minutes of usage (MOU) - to the viewing of Internet clips and downloaded or streamed video. Although there is an increase in the time spent on these video formats being watched on PCs (10 percent CAGR), the most significant increases are in video consumption on mobile devices (45 percent CAGR). And after just a few years on the market, the tablet's share of attention for video watching (9 minutes per day) was already approaching that of mobile's (14 minutes per day) in 2013 - even if tablet ownership is still limited and skewed to higher socioeconomic classes.

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