Sep. 22, 2020
With uncertainty forecasted for almost every sector, there is one sector that surely has a guaranteed its own future: entertainment streaming services. Its potential for growth is especially of note in Latin America, with video streaming subscriptions in the region estimated to reach 51.1 million by 2024, according to forecasts from Digital TV Research. Mexico is of significant importance, thanks to its large population. While many international streaming services have entered the Mexican market with success, they face a heavily saturated market: over 20 relevant enterprises operate today in Mexico's TV streaming market. In fact, Mexican consumers invest the most in web-based television more than any other country in Latin America, dominating 40.5% of the market, according to 2018 data from Dataxis. And OTTs' revenues in Mexico prove this: According to Competitive Intelligence Unit (CIU), OTTs operating in Mexico made MXN3.314 billion in revenue in 2017. That is why it comes as no surprise that Netflix has announced the opening of its second Latam office in Mexico City, bringing with it the opportunity to develop the country's film scene and entertainment sector.
According to a company statement, there are 50 projects in various stages of production currently being produced in Mexico, including four full-length films. Furthermore, Netflix has pledged to invest USD200 million in Mexican productions in 2020. Not only will its new regional office create jobs in the production and content-side of the entertainment industry, it will also help kickstart a generation of movie makers, as funding through artistic channels grows. “With Mexico City as our base, we will be even closer to the creative community as well as members all across the region as we continue to invest in best-in-class content that is loved in Latin America and all over the world," the statement continued.
This approach to new markets reveals a new trend for media service-provider-turned production companies like Netflix are following: the creation and production of local content for new markets around the world. To grow its offerings, Netflix is looking to expand into foreign markets through creating local offices so as to produce more relevant content to encompass its diverse markets. And Netflix isn't the only US-based streaming company ramping up its offerings in Mexico.
Tubi, a free ad-supported streaming service, has announced plans to launch in Mexico in 2020, as part of a pact with TV Azteca, one of the largest producers of Spanish-language TV. These types of partnerships that bring together regional content creators with international streaming services may be another future path going forward in Latin American entertainment programming. Current services available in Mexico include Amazon Prime Video, AppleTV+, HBO Go, YouTube Premium, Google Play movies, and Bilim TV. Meanwhile, Mexico-based Televisa is still a main content producer, both in Mexico and the greater region. But not all is roses. OTTs still face relatively low broadband penetration and speed, and data-limited prepaid plans, which a majority of consumers in Mexico subscribe to, as barriers to growth. And while subscriptions may not grow as fast as some predict, due to COVID-19-related fallout, the entertainment industry will certainly experience growth in terms of jobs and productions. What streaming services do offer Mexico is a way to create locally produced content, not only for local markets, but also for the wider global market.