Mexico. The subscription video on demand or SVOD market is experiencing an accelerated growth dynamic due to the incursion of new players, the growing access to connectivity in homes, as well as the deepening in the preference for these home entertainment alternatives.
Thus, in the fourth quarter of 2020, the accounting of subscriptions to SVOD platforms in Mexico amounted to 11.1 million, a figure equivalent to an annual growth of 18.2%, a level that doubled that reached the previous year (9.0%).
Since the arrival of Disney+ in November 2019, a wave of new efforts and strategies has led to participate and take a share of this market in clear growth, both in revenue and subscriptions. Which has detonated a kind of 'streaming war' or streaming wars in English.
Its arrival in Mexico, in November 2020, has detonated a new dynamic in the market in terms of preference and contracting of SVOD platforms.
Competitive Ecosystem of SVOD Platforms in Mexico
Today, the SVOD market ecosystem is more competitive than ever, with one player continuing to hold the top spot (Netflix), but with a growing number of competitors looking to gain market share.
The growing diversification and specialization of alternatives for access to audiovisual content by subscription has resulted in the availability of more than 30 platforms for Mexican audiences.
From those with a focus on the mass market or for all segments of the audience, to those specialized in adult audiences, with preferences for premium content, those focused on the sports niche and children; all seek to attract and captivate consumers through increasing investments in original content and advertising, unique user experience, diverse creative products, simultaneous releases in cinemas and on their platforms, among other features and functionalities.
However, in the current competitive ecosystem, as of the fourth quarter of 2020 (Q4-2020) we find that Netflix continues to categorically lead the SVOD market in Mexico with a total of 74.6% of subscriptions. While this player continues to lead since its launch in 2011, it has been losing share to competitors such as Prime Video (8.5% of the total), newcomer Disney+ (5.3%), HBO Go (4.0%), Claro Video (3.9%), Blim TV (1.9%), YouTube Premium (0.9%) and other players (0.8%).
It highlights that in a month and a half of its entry into the Mexican market, Disney+ already reaches a participation close to and even higher than that held by platforms that have been serving audiences for four years, this is the case of Prime Video and HBO Go, respectively.
Even in the coming months this competitive dynamic will be strengthened with the addition of new players and the relaunch of existing ones.
Market Foresight: Arrival of New Platforms and Adoption Potential
For example, in June the HBO Max platform will be launched that will consolidate a diversity of premium creative products owned by WarnerMedia, in addition to integrating a new catalog of local and international original content, with the possibility of seeing the linear programming offered by this media conglomerate. This player already available in US territory decided to offer its entire roster of premieres for 2021 simultaneously on its streaming platform, to compete more assertively with those players already consolidated and growing evolution in subscribers, such as Netflix, Amazon Prime Video and Disney +.
Also in June, Star+ will arrive in Mexico, the new offer of The Walt Disney Studios that consolidates the content of 20th Century Studios, Searchlight, ABC, Freeform, FX and Hulu for mature audiences. With the inclusion in addition to live and on-demand sports, through ESPN, its offer will join Disney+ to compete in this segment of the market.
However, the most recent rich offering available was the relaunch in March of a comprehensive packaging of content for all audiences, Paramount+, whose international streaming service is available in the US, Mexico and the rest of Latin America, integrating the ViacomCBS catalog.
Undoubtedly, this is a very dynamic market in its adoption trajectory but also in terms of investment in content, advertising, user experience and consolidation of catalogs on a single platform, which have been and will continue to be allocated by large media conglomerates to compete.
Of the total number of Internet users without access to an SVOD platform, 9% are interested in being users in the coming months, which indicates that this market will continue its accelerated growth dynamics during 2021. This, by consolidating itself as a main source of entertainment due to the continuity of the pandemic crisis and the confinement.
Given the proliferation and diversification of audiovisual content platforms via streaming, the big winner is the Mexican consumer who will have within reach a growing diversity of alternatives to meet the increasingly complex plurality of their preferences and integration into different market segments.
Text written by Radamés Camargo of The Competitive Intelligence Unit, CIU.
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