Netflix and telcos: unique strategy to maximise SVOD reach in Latin America

Netflix recently partnered with Megacable in Mexico, to bundle its Standard & Ad-tiers offers with Megacable’s 2Play and 3Play offers. Aligning with a tier-1 national operator could drive significant growth for the streaming giant in Mexico. Launched in Mexico and the rest of Latin America in 2011, Netflix has expanded its network of partners, employing a different strategy than its competitors. What’s the rationale behind such distribution strategies and how has it proven to be successful for the Los Gatos’ firm and its competitors ? Bundling between OTT services and telcos, mobile and Pay TV operators is a win-win Looking at the chart above, Max (ex-HBO Max) and Paramount+ appear to be the two OTT services accumulating the highest number of partnerships with Pay TV, Telcos and other SVOD aggregators in the region. Those figures are taking into account unique partnerships, meaning if an OTT service is partnering with an international operator, it is counted as one agreement in total and not one for each country in which the partnership is active. Disney+ and its popular regional service Star+ come right after. Lionsgate+ (ex-Starzplay) totalled 35 partners, boosted by its agreement with Disney+ in each one of its active markets in the region, and its existing deals with Cable TV operators to distribute premium channels. This has been insufficient to revitalise the platform as Starz announced pivoting its strategy in Latin America and closing the service regionally at the end of 2023. Netflix: selective network of partners but highest reach It may come as a surprise: in a battle where every OTT service tries to multiply alliances to boost potential subscription and scale internationally, Netflix comes, last behind its main competitors in terms of unique partners in the region. Indeed, the company has waged a different strategy and has been more selective than its rivals, and yet, successfully. As evidenced by the map below, Netflix ranks first in terms of potential accumulated reach in 3 of the main 6 markets in Latin America, and first regionally. Accumulated reach is the sum of subscribers of each operator that implemented a partnership with the SVOD service. In terms of Accumulated reach in Mexico, Netflix seems to be outpaced by its competitors. But in reality, the service prioritised its distribution with broadband providers and is available within the vast majority of them. In Brazil, distribution agreements are becoming all the more essential as OTT offsets the sharp decline observed in Pay TV. In Argentina, Amazon Prime Video signed a key distribution partnership with the mobile offer of Claro Argentina, enhancing its reach by more than 20M. Paramount+ and Max have multiplied distribution agreements with Telcos, in what appears as a defensive move to...