Rio De Janeiro, Brazil Brazil's pay TV market, hit by a nationwide economic slowdown, remains sluggish.
The total number of pay TV subscribers in Brazil rose by 1.5 percent, to 2.7 million in the first quarter of this year from 2.69 million in the last quarter of 1998, according to a report from Pay TV Survey (PTS), a local media-research firm.
That growth is well below historical rates posted in the sector until 1997, when the country's recession began.
The rise in subscribers was pushed by an increase in the number of households receiving direct-to-home Ku-band satellite service, which rose 15.4 percent to 587,297. Analysts said Ku-band operators -- mainly NetSat's Sky and Galaxy Latin America's DirecTV -- have grown mainly because they can offer services in Brazil's small- and medium-sized towns, where potential subscribers do not have access to any other type of pay TV service.
Cable continues as the leading pay TV technology in Brazil, with 1.77 million subscribers. But subscribership is down 1.3 percent compared to the last quarter of 1998.
The number of MMDS or wireless-cable subscribers fell 4.5 percent to 304,362 during the period, while C-band subscriptions decreased 0.1 percent to 69,270.
According to PTS research, cable accounted for 64 percent of Brazil's pay TV subscriber base in the first quarter. Ku-band subscribership represented 22 percent, MMDS 11 percent and C-band 3 percent.
Cable operators controlled by media group Organizaçoes Globo controlled 64 of the market, while those linked to April Group's TVA accounted for a 29 percent market share. Independents made up 7 percent, according to the survey.
TVA's subscriber numbers are expected to fall in the next PTA quarterly update, due to Abril's sale of its stake in Galaxy's Brazilian unit in May. Galaxy is now controlled by Hughes Electronics Co. and Venezuela's Cisneros Group of Cos.
Analysts expect a significant increase in the number of subscribers in Brazil late this year or early next year, as the investors who have recently acquired cable and MMDS licenses begin operations. The sector, nevertheless, has considerable growth potential, since pay TV penetration stands at just 8 percent, analysts said.