Overall consumer spending on video and TV entertainment in Mexico grew by 9% in 2013, to reach $4.2 billion. And the market is set to grow again: it’s forecast to reach $4.5 billion in 2014, according to the latest research from Futuresource Consulting.
Pay-TV specifically is expected to reach 75% household penetration by 2018.
"2013 was an extremely strong year for pay-TV in Mexico - growing by almost two million subscribers (+14%), with consumer spend reaching $2.9 billion and a further 10% growth expected in 2014," said Joanna Wright, senior market analyst at Futuresource Consulting.
"This has been driven by an increase across all platforms, as digital cable grew by 790,000, satellite homes 630,000 and IPTV 60,000.”
The packaged video market remains significant in Mexico and has held up relatively well, but it is starting to suffer, with sell-through video witnessing its first double-digit decline in 2013. However, Blu-ray is actually outperforming many markets with one of the strongest growth rates in 2013 (15%), making it the fifth largest market globally (6.5 million units in 2013). in addition, box office admissions grew 6% in 2013, driving revenues up to $900 million.
Digital video performed well in 2013, growing 91% to $86 million, with online video growing particularly well, more than doubling in size between 2012 and 2013.
Looking forward to 2018, Futuresource forecasts that the total digital video spend will hit $360 million, driven largely by subscription video on demand (VOD) services but with increased awareness and availability of other services boosting all platforms.
"SVOD accounted for 66% of overall digital spend in 2013 and with 70% growth expected in 2014,” said Wright. “Key drivers of this growth were the introduction of Netflix in 2011 and new entrants to the market in 2013 helping further raise awareness of the service. As the broadband infrastructure improves, SVoD services have the potential to generate significant consumer spend in Mexico.”
Broadband infrastructure has been applying some inertia to the market but it is improving with all major cities having access and broadband penetration reaching 52% in 2013. The New Infrastructure Program was unveiled in summer 2013 by the Mexican government, and one of its top priorities is to improve broadband access and speeds. That in turn will of course give further wings to digital video consumption moving forward.