DirecTV is poised to finish 2015 with more subscribers to its satellite TV service in Latin America than in the United States for the first time in its history, according to research group Dataxis.
Latin America has been an increasingly important market for the satellite company over the years, but it has traditionally lagged behind the U.S. in terms of its subscriber base. But with declining customers in the U.S. and an emerging middle class in Latin America that dominance is about to shift.
As of Q3 2014, 51.7% of DirecTV’s 39.1 million global customers were in the United States, with the remaining 48.3% scattered across Latin America and the Caribbean.
DirecTV lost about 28,000 net subscribers in Q3 and about 50,000 in the first nine months of the year, ending the period with about 20.2 million customers in the U.S. In Latin America, DirecTV lost about 119,000 customers in Q3, but gained 785,000 in the nine-month period, ending Sept. 30 with about 12.4 million customers. Add in 6.5 million subscribers from Sky Mexico – in which DirecTV owns a 41% stake – and the Latin American tally rises to about 18.9 million customers.
With still plenty of room for growth in the region ‒ unlike the saturated US pay-TV market ‒ Dataxis predicts that 2015 will signal the year when Latin American subscribers will finally outnumber US customers. This trend will continue in following years. By 2018 Dataxis expects Latam to account for nearly 56% of the group’s subscriber base, including the Sky Mexico customers, which the satellite giant is not required to account for in its subscriber results.
Those figures also do not include the 6 million-plus U-Verse IPTV subscribers DirecTV would add in the U.S. as a result of its pending acquisition by AT&T.
Depending on whether Sky Mexico’s subscribers are counted or not as part of the group (the majority stakeholder in that company is Grupo Televisa), DirecTV is currently either the largest or the second-largest pay-TV operator in Latin America behind America Movil. Including Sky Mexico’s subscribers, DirecTV has grown its market share from 17.4% of total pay-TV subscribers in Latin America and the Caribbean in 2007 to 28.5% in Q3 2014.
“After an initial period characterized by the positioning of the DirecTV brand as an exclusive product targeted at the higher-earning portions of the pay-TV market, the company was then very successful in attracting new customers through the launch of prepaid DTH services and low-cost video packages,” said Juan Pablo Conti, Senior Analyst at Dataxis and author of the new “DirecTV Latin America” report, part of the Pay-TV Operators Series 2015 in a statement.