It could be said that 2020 was the year of the rise of streaming platforms. The pandemic has undoubtedly caused the consumption of content in this medium to increase considerably. Much has happened since then, today we can assure you that they are here to stay, and we have seen an important evolution, considering that most of the large content companies have at least one streaming platform as part of their business portfolio.
In Mexico, streaming has a market value of 1.9 billion dollars(1), and in 2021 it grew by 50%, a figure that reaffirms that it is not simply a circumstantial trend, but a new way of consuming content. If we talk about the subscription model, Mexico already has 19.13 million subscribers, and the expectation is that it will continue to grow.
One of the most relevant news in recent months has been the great drop in the stock market of the great Netflix, after reporting a loss of more than 200 thousand subscribers in its latest results report, and estimating that in the coming months the figure will increase to almost two million lost subscribers, it indicates that it is not only an internal problem regarding shared accounts, but it is clear that the competition is increasing, with greater variety in content, higher quality and yes, also less cost. The company’s reaction to this problem will occur at the end of this year, when they indicate that they will launch a free version with advertising. In fact, in Mexico, Advertising Video on Demand platforms already represent 13% of the market.
Although Netflix continues to be the world leader in its category, it is clear that competes with large companies such as Disney, Amazon and Apple, in which streaming is only a complementary part of their business and in many cases not even the core business.
SVoD (Subscription video on demand): the most popular and well-known in all markets. They are subscription video-on-demand platforms. They require a monthly or annual payment, to have access to content without advertising.
AVoD (advertising video on demand): the user obtains “free” access to the contents, but these contain advertising inserts.
TVoD (transaction video on demand): offers the possibility for users to temporarily (rent) or permanently (sell) the content made available on digital platforms.
TVE (TV Everywhere): Restricted TV companies or convergent operators, offer their users the possibility of seeing the channels, the linear/live programming grid and/or contracted video content on demand.
PVoD (premier video on demand): Large studios offer their productions on digital platforms days or weeks prior to their theatrical release.
In a very forward way and with the clear intention of reaching the largest possible audience by monopolizing the market, Televisa and Univisión launched the Vix platform in March of this year, with free content and advertising, as well as Vix+ as a subscription model without advertising.
Definitely, the challenge lies in building an audience, segments and being able to offer advertisers concise data to market the spaces on their Vix platform. For this it will be very interesting to see how the quality of the content they offer evolves, since on the promotion side, we have been able to see that they have started a very strong advertising campaign to capture that much-desired audience that will make this new business model grow.
Streaming advertising formats are first of all much more friendly to the audience, with generally shorter durations, in many cases open to skip, and generally shorter blocks of advertising than we can find on conventional television. Another important aspect is the relevance of the advertising that reaches us on these platforms, since the way of planning and buying is 100% digital. The communication is much more directed to its audience and therefore it is even more relevant for the consumer.
For three years now, the consumption of content and television has been evolving, we have gone from talking about television to digital, and from digital to streaming. The growth of this market has been spectacular in the last two years, with the circumstantial engine of the pandemic. What we can assure you is that streaming is here to stay, and the challenge that communication companies and advertisers are facing will forced them to adapt to these new changes. They will need to understand how much of the budgets are going to be invested in them and of course how to measure the results.