Mexico is the 10th most populous country in the world, with 74.3 million internet users and more than 18 million homes connected online. In recent years, Mexico has lead the race in audio streaming, developed a dominant SVDO market, and it has become the leader of the gaming industry in Latam.

According to Digital TV Research, in the next five years Latin America will reach over 48.24 million SVOD subscribers, more than twice the 21.14 million registered at the end of 2017. By then, Mexico will represent 36% of the SVOD subscriptions in the region – with Brazil in second place at 27%.

This will reflect in regional revenues for OTT platforms that are projected to reach 6.43 billion dollars a year at the end of the forecast period.

PWC consultants reported that revenues from OTT platforms in Mexico would grow 11.2 percent each year.

Netflix has grown to become the preferred platform for Mexicans to consume streaming content and it now boasts a market share of 80.8 %, but it is not the only player.

  • Blim, a streaming service owned by Televisa, has 2.7% of the market
  • HBO Go has grown to 1.5 % of the market
  • Fox Premium, recently acquired by Disney, has a mere 0.2 % of the market

Currently, 73% of Mexican homes have at least one “smart” screen, which opens up the possibility of consuming content from other content providers such as Disney + or Amazon Video in a short time. The CIU believes that in the future the competition between these players will continue to rise.

As of Q3 2018, 14.4 million new OTT audio subscriptions were added in Mexico and with a total subscriber count that now reachers over 47.3 million people – this figure represents 57.2% of all internet users in Mexico.

We recommend you read: Growth of OTT in Mexico

Data by NewZoo, a consultancy that specializes in gaming markets, reveals that Mexico is the country with the most profitable gaming market in Latin America and ranks 12th worldwide – above Brazil.

According to The Competitive Intelligence Unit (CIU), the market value of the video game industry in Mexico reached 27.32 billion pesos in 2018, which represented an increase of 9.1 %.

Don’t forget to read: Mexico leads the Gaming market in Latin America

Mexico’s connectivity

The telecommunications sector represents 3.4 % of Mexico’s 2.4 trillion GDP. While the northern half of the country has higher incomes and purchasing power the adoption of internet use at the national level is increasing in a general way, as indicated by The National Institute of Statistics and Geography (INEGI). Here’s a quick look at Mexico’s connectivity:

  • 68.9 million smartphone users
  • 24.2 million laptop users
  • 23.8 million desktop users
  • 13.2 million tablet users
  • 12.3 million tv users with access to a connected device
  • 5.1 million video game console users

The CIU noted that in the first quarter of 2019, each mobile user consumed an average of 2,066 megabytes (MB) per month, 99.3% more than reported in the same period last year.

Why bringing content directly to Mexico is the most profitable option

In some parts of the world, companies turn to IXPs to connect to a wide range of networks from a single point and exchange local traffic quickly and easily. However, in Mexico, it is not yet common to see these types of practices that facilitate the mass delivery of content.

Peering reduces overall IP transit costs and offers improved end-to-end network performance, speed, and reliability. IXPs will take a critical role in advancing the digital economy in which content providers demand increasing levels of interconnection to improve performance.

Once established, an IXP creates a local environment with dynamic copies of a wide range of services, such as domain name servers, root servers, time servers, and web and content caches. These localized services reduce bandwidth requirements, decrease latency, and increase the reliability of Internet access for local users.

Don’t forget to read: The most important FAQs about peering in Mexico

Peering is multi-beneficial for Mexico, reduces the cost of traffic exchange, produces fast connections locally, which is cheaper than interconnecting outside the country or in another city. Local services respond to faster-shorter distance between users.

It is the perfect companion of a cross-connection. Having both options can further improve network performance, if peering sessions fail, transit services through cross-connections will provide backup connectivity to peer networks – and vice versa. Having both connections means greater redundancy.

Operators have visibility into how much traffic is flowing over their port and where it is going, which avoids the frustration of oversold IP traffic routes.

Mexico needs to peering with content providers and other networks and vice-versa because as we have mentioned, this country represents a potential market for the entertainment industry.