The market for audiovisual content by subscription on the internet in Mexico and the rest of the world is in a phase of expansion of its offer, with a diversity of platforms, productions, value-added offers and rate levels. On the demand side, consumers continue to be segmented according to their respective profiles, preferences and economic capabilities.
To date, the Mexican consumer has an availability of more than 30 video platforms under demand by subscription (SVOD-Subscription Video On Demand, for its acronym in English), with price levels ranging from $ 49 to $ 299 pesos per month (PxM).
Precisely, in recent days this upper limit was reached in the monthly price of these platforms, with the announcement of Netflix of the increase of more than 10% in its Standard ($ 196 to $ 219 PxM) and Premium ($ 266 to $ 299) plans. Their rent was already at the highest level and with this announced adjustment, the gap widens even more, with the consequent loss of rate competitiveness compared to other players in the market, which offer the same service characteristics (4K / ULTRA quality HD in the contents, up to 4 simultaneous content reproductions) at lower prices.
Tariff levels between platforms. Indeed, when comparing the rate levels between subscription plans and main platforms that mostly include both possibilities, Netflix registers the highest price ($ 299 PxM) in its Premium plan that more than duplicates the average registered in the market ($ 135 PxM) . Its frequent price increases, combined with the aggressiveness and rate promotions of incoming players, as well as the increasing offer of added value from its competitors, test the elasticity of its demand and, with it, its preeminent position in the market.
Among the offers of its competitors is the possibility of accessing two platforms at a lower price for the same rate level (Combo + de + and Star + for $ 259 PxM). Other similar cases are those of Star + ($ 199), Disney + ($ 159) and HBO Max ($ 149). Paramount + and Apple TV + stand out for being in the lowest price range of $ 79 and $ 69 pesos per month respectively, the lowest levels in the SVOD market.
Thus, in this phase of growing offer and diversification of platforms, as well as of competitive rates in the market, the price level has the possibility of becoming an instrument of attraction of audiences for incoming players or a risk to maintain them for those already consolidated. This, predictably, especially in a country with socioeconomic characteristics and budget constraints such as Mexico.
Expansion to other markets. Also, Netflix recently entered the video game market, a strategy with which the platform not only intends to maintain its preference, but also to strengthen its positioning. This ability to expand into adjacent markets has been possible by consolidating itself as the main provider of SVOD content with its global subscriber base that reaches 209.2 million as of 2Q-2021.
This move to create greater added value for its users is part of the trend of other technology, telecommunications and media companies that seek to strengthen themselves by expanding their market footprint to other business segments.
This predicts challenges for competition authorities, when assessing their true power and influence in a market ecosystem in which the supply of devices and services is increasingly convergent.
Twitter: @ernestopiedras
Director General de The Competitive Intelligence Unit
Competitive intelligence
Reference-www.eleconomista.com.mx