Mexico. The growing offer and diversification of alternatives for access to audiovisual content over the Internet under the subscription model (SVOD-Subscription Video On Demand, for its acronym in English) has detonated a dynamic of competition in prices between the different players of the market with the aim of attracting and / or maintaining users and consolidating their market positioning.
This strategy has been undertaken mainly by incoming bidders who, in addition to differentiating themselves by their catalog of historical content and original productions, advertising investment and user experience development, seek to generate an incentive through the tariff route to attract audiences to subscribe to their platforms on a monthly or annual basis.
Although the streaming war was triggered by the differentiated offer of content from major studios worldwide, today a new battle is looming in the field of prices to consumers of audiovisual content, specifically in the Mexican market.
Price Comparison between Platforms
Today we can find alternatives of SVOD platforms in different price levels that adjust to the variety of availability of resources of the audiences. In this regard, they can access audiovisual content from $ 69 pesos per month, with availability of simultaneous transmission up to 6 devices or users and 4K / ULTRA HD quality.
To make the different tariff levels comparable in the analysis, subscription plans were used, which mostly include both possibilities: simultaneous viewing and high resolution in audiovisual content. Thus, the average monthly price that is registered among the 11 main SVOD platforms is $ 132 pesos per month, considering the following players, in order of tariff from highest to lowest: Netflix, Star+, Disney+, HBO Max, YouTube Premium, Claro Video, Blim, Prime Video, Starzplay, Paramount+ and Apple TV+.
It highlights that the main and incumbent player in the market (Netflix) is the one that registers the highest tariff level among the players analyzed, with a monthly price of $ 266 pesos in its Premium plan, which more than doubles the average referred. The aggressiveness of its competitors, by offering even two platforms at a preferential price at a lower cost ($249 per month) than this player, threaten its position in the market.
Precisely, incoming bidders offer the same quality in the transmission of content (4K/ULTRA HD) and the same number of devices in simultaneous playback (4) at a significantly lower price. This is the case of Star+ ($199 pesos per month), Disney+ ($159 pesos per month) and HBO Max ($149 pesos per month). Paramount+ and Apple TV+ stand out for being in the lowest price range by providing subscriptions for $ 79 and $ 69 pesos per month respectively, the lowest levels in the SVOD market.
This warns of an upcoming reconfiguration in the ecosystem of platform preferences by audiences, who can even save resources and / or obtain greater added value by hiring in a packaged way or through promotional prices.
Tariff Promotions and Value Added Offers in SVOD
With the proliferation of new platforms, consumers will have to opt for those that venture with a lower launch cost, offer greater added value, special promotions and / or higher quality of content.
Precisely the incoming platforms and some others already consolidated have implemented special offers in the contracting of their services. These are the cases of Disney+, Star+, Starzplay and Paramount+ that offer a preferential price in the contracting of their platforms for six months or a year, in addition to having savings when contracted jointly, Disney+ and Star+ in Combo+ and Paramount+ for free by having Claro Video.
Other ways of saving and greater added value are identified in the purchase of new Apple devices, which enable limited-time access to the Apple TV + platform, or in the acquisition of free shipping membership, access to games and playback of music and streaming video content offered by the e-commerce giant Amazon Prime. Also, by reaching the maximum level of user for the number of purchases and use of the Mercado Libre platform that allows access to discounts of up to 50% on different SVOD offers.
Also the launch offer of 50% for life in the monthly price at the launch of HBO Max and its offer packaged at a lower rate level or even free for a limited time when contracting other content services (online or Pay TV) and connectivity (fixed broadband internet), are among these strategies of attraction and audience acquisition for these platforms.
However, although the confinement and social distancing caused by the pandemic crisis detonated a boost in the hiring by SVOD platforms in Mexico, in this second chapter it will be the competitiveness and aggressiveness of tariffs, together with the promotions of launch and packaging of offers, which will again accelerate the preference and demand for access to audiovisual content online via subscription. This, with the potential to reconfigure the competitive scenario between platforms in the short term.
Text written by Radamés Camargo of The Competitive Intelligence Unit, CIU.
