Mexico. The market for access to audiovisual content over the Internet through the payment of a monthly subscription, better known as subscription video on demand (SVOD) platforms, registers an accelerated dynamism in the possession and acquisition of users, as well as a transformation in the model of provision of film and television productions to audiences.
In Mexico, SVOD platforms reached an accounting of 7.4 million subscriptions at the end of the second quarter of 2017, this is 25.6% than a year earlier and more than 12 times the figure of just five years ago. This growing user base results from the incessant penetration of the internet among the population, the affordability of the service compared to pay TV, as well as the preference for exclusive original productions and ubiquitous access from a diversity of connected devices.
On the other hand, this market identifies changes in the content distribution model that have impacted the configuration of the competitive ecosystem. In their nascent operation, these platforms focused on the distribution of content with proven recognition among audiences, to quickly become generators of original productions exclusively and in some cases, transition to a model of value-added offer to telecommunications services and the addition of platforms through billing agreements.
It is precisely in this transition that the launch of new SVOD platforms with original content offered by platforms of digital origin such as Netflix and Amazon Prime Video is identified, together with the offer from the content generators themselves (HBO, Fox, Televisa and soon Disney), and also that provided by telecommunications operators (Izzi, Movistar, Totalplay, Axtel and Claro) that have found an additional route of income generation with the launch of these platforms.
Therefore, today's competitive ecosystem of SVOD platforms differs dramatically from that of two years ago and even from last year.
With figures for the second quarter of 2017, Netflix continues in its position as the main provider of SVOD content (63.6% of subscriptions), although with a lower market share, as a result of the entry of new players with competitive and attractive content for audiences.
Claro Video reaches the second place with 24.9% of subscriptions, climbing a position with respect to previous figures, due to the incorporation of the platform from the basic packages of Infinitum of Telmex, as well as the recent offer in Telcel tariff plans from $ 300 pesos per month. With the high customer base registered by the Telmex/Telcel conglomerate in the telecommunications market, this platform reaches a marked potential for generating subscriptions compared to its competitors.
With a smaller market share, there are the platforms of content generators with a marked experience and recognition: HBO Go (2.3%) and Fox Premium (0.9%), whose productions are now available to audiences without the need to hire a pay TV package.
From the above, it is possible to infer that we are facing a market that registers an upward competition between platforms, with the incursion and support of infrastructure and billing of telecommunications operators, for example, with the launch of Axtel Play; as well as from the announcement of upcoming releases from major providers of original content such as Disney.
The distribution of original content from unique platforms is the name of the game in this market of SVOD platforms that is consolidated as the route to gain ground among the preferences of consumers, constitute a base of subscriptions and consequently, generate a revenue stream for bidders.
Text written by Radamés Camargo of The Competitive Intelligence Unit.
