Telefonica signs Sony Pictures deal in Latin America, watch out Netflix

Spanish telco Telefonica has closed a deal with Sony Pictures to offer the studio’s content on its VOD platform in Latin America, the company announced.

The agreement includes catalogue movies and TV series, but also new film releases over the next few years. While the companies didn’t release the exact number of licensed titles, they confirmed that recent blockbusters “Girl with the Dragon Tattoo,” “Moneyball,” and “The Smurfs” were part of the deal, as well as future releases such as “Men in Black III” and “The Amazing Spider-Man.”

This isn’t the first time Telefonica has partnered with Sony Pictures; both companies signed similar agreements in Spain, the Czech Republic and Germany. Yet, they didn’t have a deal in place for Latin America, despite the fact that the region now accounts for almost half of Telefonica’s revenues.

Following this week’s announcement, Sony’s content will now become available through multiple devices (TV, tablets, PCs, smartphones and game consoles) in the Latin American countries where Telefonica’s and Terra’s VOD platforms operate.

Telefonica, a VOD player in Latin America

At the moment, two-thirds of Telefonica’s 3.2 million paid TV subscribers are from Latin America, where they access the service via DTH, cable and IPTV. Part of this user base already has access to Telefonica’s VOD programming on their TV sets via set-top boxes and on PC – the service is available in Argentina and Brazil, with expansion plans to Chile and Peru in the coming months.

Besides this offer, the group has also launched an over-the-top (OTT) store in Brazil, Chile and Colombia. Called Terra TV Video Store, it will become available in other Latin American countries later this year.

Telefonica’s VOD services follow a hybrid business model, offering both transactional VOD and subscription plans. Things won’t be different for Sony; users will be able to rent or buy the studio’s feature films – including new releases – on a pay-per-view basis. As for monthly subscribers, they will have access to “a wide selection of library films and series,” Telefonica said.

Competing on content

Sony’s content will come in addition to the movies Telefonica already offers – both Telefonica Argentina and Terra Latam already have agreements in place with other Hollywood studios such as Disney and Warner Bros.

As a matter of fact, content is becoming critical for VOD services to succeed. While it’s too early to tell how Netflix will perform in the region in the long run, part of the negative feedback it received after its launch in Latin America had to do with the lack of depth of its catalogue.

The streaming service is currently working on beefing up its offer; according to Gizmodo Brasil, its catalogue in Brazil has recently reached the milestone of 1,000 movies. However, this figure is still quite modest, especially when compared to the volume of pirated content users may access through controversial portals like Argentina’s Cuevana, which are very popular across the region.

In this context, Netflix’s competitors are hoping to differentiate themselves by signing premium content deals with Hollywood studios. As for these, they’re keen to ensure Netflix doesn’t become the sole player in Latin America, which explains why Miramax has recently closed a streaming deal with the Brazilian service NetMovies.

Compared to subscription-based players like Netflix and NetMovies, Telefonica has several assets; besides its studio deals and its hybrid offer, it can also count on its large Internet and paid TV subscriber base, not to mention the popularity of its web portal Terra. However, it will still face competition in the VOD segment, which the cable TV and Internet operator Net is also eyeing.

Who do you think will win the VOD battle in Latin America? Let us know in the comments.