First, the pandemic came and devastated the lives of so many in the Latin American region. Then came an economic downturn that is only now abating.
COVID-19 couldn’t have been much worse for LATAM. Reported figures have indicated that Latin America has recorded close to 30 percent of worldwide deaths (although this doesn’t take the underreporting of deaths in parts of Africa into account) from COVID even though the region accounts for just eight percent of the world’s population. Fortunately, the region is looking at a slight drop in inflation in 2022, as well as a reduction in interest rates, and slight economic growth. Poverty levels, however, remain very high.
Another problem is the historical droughts suffered throughout the region, especially in Brazil (which is suffering from the worst drought in the last 100 years), Paraguay, and Argentina, where bushes are currently burning around the second largest wetland on the planet. It’s one of the most valuable freshwater reserves on earth.
According to some reports, in 2021, some 86 million people in LATAM were living in extreme poverty, up from 81 million people the previous year. Before the pandemic, 70 million people in the region were living in extreme poverty.
However, the increased poverty levels don’t seem to affect the region’s access to all forms of television, and users have not changed their relationship with television. The number of poor pay-TV users, for example, has not been significantly reduced because a high percentage of them use pirated services. In middle-class households, more and more cord-cutters are turning to broadband and giving up traditional pay-TV options (cable, DTH, IPTV) and subscribing to streaming services, instead.
Nonetheless, Latin American audiences continue to have a strong bond with broadcast TV, which they mostly access through their pay-TV systems or via an online connection. (Very few people still use a real antenna.)
In effect, the pandemic, climate changes, and economic crises did not reduce television audiences in the region. It did, however, have a negative impact on television companies, which lost most of their ad revenue.
The number of households leaving pay-TV systems have skyrocketed in recent years (except for the very poor who continue to have pay-TV due to the aforementioned illegal connections). Latin American pay-TV is in crisis and is looking for a way to reinvent itself. On the other hand, the number of Latin American streaming users continues to increase.
Free-to-air TV is also affected because the sector lives off of advertising, and since the economy has not been good, these TV channels have suffered the consequences. However, many are hoping that 2022 will be a better year than last year since a growth in advertising investment is anticipated.
Indeed, in the January 20, 2022 edition of VideoAge‘s Water Cooler, Omar Mendez, editor-in-chief of the Miami, Florida-based The Daily Television and VideoAge‘s contributor from Buenos Aires, wrote that despite the pandemic, the year that just ended showed a partial recovery of broadcasting in LATAM’s South Cone region, with larger audiences and a 35 percent growth in ad spend.
The Argentine broadcasting market, for example, the largest in this region, is the one experiencing the most critical situation. With the current state of the economy and the value of its currency in freefall (with 50 percent annual inflation and an increasingly devalued peso), and the consequent reduction in advertising investment, free-to-air television stations have had to use extreme creativity to win over audiences and advertisers. Reality shows, current affairs series, and a variety of in-house production abounded.
Then, with an average annual inflation rate of 6.5 percent, the situation with the Chilean economy not only differs markedly from its Andean neighbor, but it is also the most stable and healthy in the entire Latin American region. Until September 2021, advertising investment had climbed up more than 35 percent as compared to 2020, the year hardest hit by the pandemic. And of that total, almost 33 percent went to free-to-air television stations. Projections are positive for the broadcast TV market, despite the difficult start to this year due to the Omicron strain.
Uruguay is a country with a stable economy (annual inflation of eight percent) and advertising investment that’s still recovering from 2020. There, national broadcasting has turned to large-scale international entertainment formats to fill its most valuable time slots, complementing schedules with local current affairs programs.
Paraguay closed 2021 with an inflation rate of 6.8 percent and with advertising investment that was higher than in 2020.
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