Brazil as a Promising Market for Streaming

The Promising Market streaming in Brazil has attracted the attention of investors and companies around the world.

With entertainment and media revenues growing rapidly, Brazilians are increasingly inclined to subscribe to multiple platforms.

In this article, we'll explore the current landscape of the streaming market in Brazil, comparing spending with the US, analyzing the growth of subscriptions, and the impact of artificial intelligence on content creation.

We'll also discuss the rise of digital advertising and the trends shaping the future of this vibrant industry.

Growth and Projections of the Streaming Market in Brazil

The streaming market in Brazil is rapidly expanding, with revenue projections expected to reach R$ 206.5 billion by 2027. This growth is driven by a young, connected base that increasingly consumes digital content.

According to the Global Entertainment and Media Survey, the sector promises annual growth of 4.1%, surpassing the country's overall economic performance.

At the same time, digital advertising, a vital element in this ecosystem, is expected to rise from R$1.44 billion in 2022 to R$1.46 billion in 2027, highlighting the growing role of models such as AVOD and FAST.

The rise of this market highlights key moments essential for Brazil's economic advancement:

• Significant investments in original content, increasing from R$116 billion in 2022 to R$132 billion in 2023
• Expansion of generative artificial intelligence as a content development and advertising tool
• Digital video advertising will surpass linear TV investments by 2027

Thus, the audiovisual sector in Brazil not only adapts to global trends, but also creates a promising space for consumers and companies to invest in new technological and commercial opportunities.

Spending and Subscription Comparison: Brazil vs. the USA

In the streaming scene, Brazilians stand out for having a higher number of platform subscriptions compared to Americans.

Brazilians spend, on average, R$1,400 per month subscribing to 3.8 platforms, while in the United States, the monthly cost is R$ 212 for just two subscriptions.

This difference is due to cultural and economic factors.

The variety of local content and the growing presence of affordable services like Amazon Prime, which offer lower prices, attracts Brazilians to subscribe to various platforms.

Additionally, advertising in AVOD and FAST models increases interest without significantly increasing costs.

Relevant is that in Brazil, the advancement of artificial intelligence and investment in original content also encourages a young, connected base to seek out a variety of options, thus shaping consumer behavior in streaming.

Annual Streaming Growth Rates: Brazil vs. the US

The streaming market in Brazil is booming, with entertainment and media revenues expected to reach an impressive R$206.5 billion by 2027. This annual growth rate of 4,1% reflects a much more intense movement compared to the United States, whose advance is only 2.6%.

These numbers are impacted by several factors.

First, demographically, Brazil has a young and highly connected population, while the US is relatively more mature.

This means that there is a faster adoption of new digital platforms by Brazilians.

In economic terms, the average monthly expenditure of a Brazilian on streaming services is just R$1,400,118, approximately half of what is spent in the US, enabling greater market expansion as the population's purchasing power increases.

The innovative environment in Brazil, combined with growing investments in original content – which went from R$ 116 billion to R$ 132 billion between 2022 and 2023 – demonstrates a continuous commitment to expanding the local catalog.

The growing presence of digital advertising, especially through AVOD and FAST models, is another factor driving this prosperity.

Technically, Brazil has seen significant technological development, with generative artificial intelligence shaping the future of content.

This translates into more advanced user interfaces, personalized recommendations, and increased user engagement.

To illustrate, see the graph below, which shows the comparison of rates:

2022 |———-|
BR: 4.1%
USA: 2.6%
2027

Expansion of Digital Advertising and AVOD and FAST Models

Digital advertising in Brazil has shown significant growth, expected to increase by R$ 44 billion in 2022 for R$ 56 billion by 2027. This movement is due to the advancement of digital technology and a young and connected population, which drives media investment strategies.

As media consumption habits change, brands are turning to innovative formats to capture consumers' attention.

This context favors the AVOD (Advertising-Based Video on Demand) and FAST (Free Ad-Supported Streaming TV) models, which stand out for their ability to effectively reach a wide audience.

The AVOD and FAST models offer a number of valuable features and benefits:

• Extended reach: Allow brands to reach a larger and more diverse audience.
• Cost-effectiveness: They offer cost-effective solutions compared to traditional models.
• Content personalization: Enable brands to tailor ads to specific audience segments.
• User experience: They offer content at no cost to the user, increasing engagement.
• Format flexibility: Cover a variety of devices and platforms.

According to research, Brazil is becoming one of the main markets for these formats according to the website Live Screens, with rapid growth in consumer adoption.

Investments in Original Content and the Role of Artificial Intelligence

Amid growing investment in original content in Brazil, which has jumped from R$ 116 billion in 2022 for R$ 132 billion In 2023, generative artificial intelligence will play a crucial role in personalizing and optimizing content and ads for streaming platforms.

This significant increase in the budget reflects the relentless search for innovation and competitiveness in an already thriving market.

Generative AI, as seen in innovations in Global X ETFs, enables the creation of personalized content by using user behavioral data, allowing platforms to adapt their offers according to consumer preferences and habits.

This personalization not only drives audience engagement, but also translates into a more enriching and intimate viewing experience.

Furthermore, the application of AI in the sector also brings benefits to advertisers, who are able to reach their target audience with greater precision, optimizing returns on advertising investments.

According to Netflix, which already uses generative AI to produce original films and series, marketing campaigns become more assertive and adapted to the nuances of specific interests.

However, this technological advancement also presents challenges, such as the need to ensure that the use of this data is ethical and protected by robust privacy policies.

The pressure to constantly innovate and maintain production costs also challenges producers to balance creativity with the efficiency afforded by technology.

Young and Connected Base: Engine of the Brazilian Market

In Brazil, young audiences are emerging as one of the main drivers of the streaming market.

This group, composed of users between 16-34 years old, represents a significant portion of the connected population, responsible for a large part of the consumption of digital content.

According to research, around 75% of Brazilians watch videos daily, demonstrating the deep involvement of this age group with digital platforms.

Access to multiple platforms is a notable feature, as many young people use services like Netflix, YouTube, and Disney+ regularly.

With an average of 3.8 subscriptions per user, flexibility in consumption provides a fertile environment for segmenting and personalizing content, maximizing engagement.

Furthermore, the interactivity and ease of access to the internet mean that young people prefer to consume content on a variety of devices, such as smartphones, tablets, and connected TVs.

This connectivity offers streaming platforms the opportunity to capture the interest of this audience at different times of the day, increasing the average time spent consuming media.

This scenario attracts the attention of advertisers looking for young audiences to insert digital advertising.

With the advancement of artificial intelligence, advertising strategies are becoming more refined and aligned with young people's consumer behavior, generating an even greater impact on the Brazilian streaming market.

As a result, the influence of this young, connected base is likely to grow, shaping future trends in the industry.

In summary, Brazil is consolidating itself as an innovative hub in the streaming sector, driven by a young and connected population.

Opportunities for growth and investment are expanding, reflecting a promising future for the market.