When operators launch Spanish-language over-the-top services, they will have a legitimate chance to capture the 9.5 million Spanish-language-dominant homes that do not have access to pay TV. Through this opportunity, they will acquire a video customer, as well as a broadband customer.
Spanish-language-dominant homes watch 78% of television in Spanish, according to Nielsen. So, if they like Spanish-language TV so much, why are they not ordering a Spanish-language TV package?
Out of the 13.5 million Spanish-language-dominant homes in the United States, the pay TV industry has only managed to attract approximately 4 million homes to one of the cumulative Spanish-language TV packages offered by most providers. This would imply that 9.5 million Spanish-language-dominant homes do not have pay TV at all. It also implies that they don’t have broadband.
There are 3 main barriers for Spanish-language-dominant homes to access pay TV:
(1) Credit Standards: Millions of Spanish-language-dominant homes are rejected due to lack of sufficient credit. Many operators will reject customers without established credit because of the hundreds or thousands of dollars in capital they have to invest in set-top boxes and general installation. These same credit standards are generally applied to broadband, which also limits operators' ability to acquire Internet customers who are Spanish-language-dominant.
(2) Lack of HD: The average age of U.S. Hispanics is 24; why would they want to order a Spanish-language TV package from traditional operators without HD? Those providers, such as Charter Communications and Verizon FiOS TV, that have embraced Spanish-language HD networks on their Spanish-language TV package could eventually pose a problem for other operators that don’t. With the continued onset of OTT providers offering Spanish-language HD content, this would increase the desire for the other operators to offer Spanish-language HD networks.
(3) English-language Buy-through: The Spanish-language-dominant homes are not only price sensitive, but they also watch 78% of their TV in Spanish. However, in order for them to watch the channels they want, it is required for them to purchase and pay for a lot for packages that include English-language channels that they don’t desire.
OTT solves all of these problems and creates the ultimate ability for the operator to offer flexible packages. Olympusat has introduced the new VEMOX OTT service as an OTT solution to help capture the 9.5 million Spanish-language-dominant homes.
Olympusat and Viaccess-Orca, a subsidiary of Orange (formally France Telecom), are in a joint venture to offer VEMOX; other major partners include Accedo, Harmonic, Cisco, Akamai and Amazon CloudFront. The service will offer 100 live Spanish-language streaming channels, with at least 30 in HD. It will also include an initial 5,000 hours of VOD, with plans to grow that number by 1,000 hours each month. It's priced at $14.95 per month with no buy-through of English-language channels required, and is available on Android, iOS, Amazon Fire, Samsung and LG devices.
Tom Mohler is CEO of Olympusat Holdings.