Mexico Ott Tv and Video Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Mexico Ott Tv and Video Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Mexican OTT TV and video market is expected to grow at a CAGR of 4.5% over the forecast period. Mexico has been witnessing a rapid development of convergence services of the internet and mobile devices, owing to the development of IT and media technologies and the spike in M&A activity over the past decade. The growth of the internet ecosystem consisting of cheap, powerful devices, communities of web entrepreneurs, and faster internet connections are factors that aid the increasing adoption of the OTT market in the country.

• The shifting consumer preference toward online content due to the increasing proliferation of high-speed internet in Mexico provides an impetus for market growth. Substantial investment flows by video streaming media companies, like Netflix, Amazon Prime, and Hotstar, led to an increase in the number of Pay-Tv subscribers.
• Mexico has become a prime focus for many subscription OTT services because of its improving digital infrastructure and the growing need for indoor entertainment during the coronavirus pandemic. Netflix is one of the most used platforms in the region. Its international competitors, Amazon Prime Video, Disney+, HBO Max, and Apple TV+, as well as local streaming services owned by major TV networks or telecom companies, Claro Video, Blim TV, and Globoplay, have an increasing demand in the region.
• The proliferation of streaming services and the fracturing of content libraries will ultimately force consumers to decide which platforms they value the most, which will create a unique opportunity for cheaper and free ad-supported platforms to gain market share among price-conscious consumers.
• The COVID-19 pandemic increased the time spent on video streaming apps, leading to a rise in growth opportunities for the region's OTT market. For instance, according to WarnerMedia, on average, Mexicans spent 244 minutes watching pay-TV between March 23 and 29, 2020, which is 28 minutes more than the average of 216 minutes between January 1 and March 15, 2020.
• Along with the impact on production, the pandemic took a toll on the consumer demand for display-integrated devices, likely exacerbated by the lockdown. Uncertainty regarding the possible length of the lockdown made it difficult to anticipate how and when a resurgence in the display industry would occur.

• The increasing penetration of high-speed Internet connectivity, wireless data plans, and the rapid availability of public Wi-Fi increased the demand for OTT in Mexico in different applications, including health, finance, e-commerce, education, and others.
• A massive increase in OTT uptake in Latin America is expected over the next five years, with regional revenues expected to increase significantly. Regional service providers, like Telefonica with its Movistar Play brand and Millicom Group with Tigo Star, capture a large share of the region's video market, thereby becoming leaders in quad-play solutions.
• However, the competition for revenues became fierce as global players like Netflix moved in. Amazon Video is becoming a key competitor for Netflix in the region in catching up on the local content.
• Moreover, to encourage and increase the presence of national content on video-on-demand platforms, Brazil's Ministry of Culture offers tax discounts to include Brazilian content. These tax reductions will depend on the number of Brazilian videos added to the catalogs. This will be an incentive for companies to lower their taxes and help the Brazilian movie and film production companies grow simultaneously.

• The main factor responsible for the surge in the popularity of SVOD streaming platforms, like Netflix, Amazon Prime Video, Hulu, HBO, and Disney+, is that the user gets unlimited access to original and high-quality content on the go. This trend is also gaining popularity in emerging countries like India. Both Disney and Apple launched streaming services in recent years as more companies look to compete with Netflix in video streaming wars.
• Further, the growth of fiber infrastructure and 5G networks capable of handling the massive increase in digital traffic caused by increasing mobile use of media offerings is anticipated to powerfully drive the digitalization level of video production processes. Moreover, Apple's bundling of access for its hardware consumers will help ensure that subscriber numbers are high from the start. Instead, the limitations of their impact on traditional TV will be a function of the pace at which SVOD services increase spending on programming.
• In terms of regional penetration, the demand depends on various factors such as internet accessibility, low-cost internet, network infrastructure, preference for regional content, smartphone penetration, competitor brands' dominance, regulations related to allowed media, and spending preferences. With SVoD penetration in Mexico still startling low, there is a massive opportunity for expansion.
• In July 2022, ViX+, the premium tier Spanish-language streaming platform from TelevisaUnivision, launched in the US, Mexico, and Spanish-speaking Latin America. The platform kicks off with more than 10,000 hours of film, TV, and sport, offering more than 70 original series and films in the first year, and will carry live football league and tournament games, including the Champions League. In Mexico and Latin America, members can view live TV channels, including Distrito Comedia, while Mexico subscribers will additionally get Las Estrellas, Canal 5, TUDN, and Nu9ve.

The Mexico OTT TV and video market is fragmented and has some major players who adopt various growth strategies, such as mergers and acquisitions, new product launches, expansions, joint ventures, partnerships, and others, to strengthen their position in the market. Some major players include Netflix, Amazon Prime Video, Moviestar Play, Claro Video, and Blim.

• May 2022: OTTera, a white-label OTT and FAST Channel service, confirmed a partnership with TV Azteca to deliver TV Azteca's Pay TV channels to Samsung TV Plus in Mexico. This strategic alliance with OTTera is expected to provide a greater distribution of the TV Azteca channel portfolio with Samsung and, in the near future, with other smart TV producers in Mexico and LATAM.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support