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Contxto – Netflix has its eye on the prize: the streaming market of Latin America.
And to secure its streaming position, the company will establish its regional headquarters in Mexico City. Netflix made this announcement last Friday. It shall also invest US$200 million in productions from Mexico to create 50 new TV and film projects this year. In addition, these funds shall further finance hits such as “La Casa de Las Flores” and “Diablero.”
Meanwhile, Netflix’s office in São Paulo will remain a regional branch.
Eat your heart out Televisa.
New markets for Netflix
It’s dawned on this streaming service that to go big, sometimes you gotta leave home. That’s why it had opened foreign offices in Tokyo, Singapore, Amsterdam, Paris, London, and a production hub in Madrid.
A byproduct of these efforts was that around 90 percent of Netflix’s growth in 2019 came from international markets.
Correspondingly, its decision to open up shop in Mexico was based on the need to be physically closer to its market and build relationships with key partners in the area.
Nothing like having eyes on the ground.
Latin America, the streaming guinea pig?
Netflix knows the streaming battleground is hot in the US as it’s competing with the likes of HBO Go, Amazon Prime Video, and Disney+. But in order to avoid putting all its eggs into one basket, the company knows it must fight for foreign markets.
That’s where Latin America comes in.
This region’s streaming potential is growing at a fast clip, thanks to its relatively young population, improving internet infrastructure, and diversified payment methods (e.g. via fintech apps or prepaid cards). Top that with content that’s tailored to the local scene, and you’re a rising regional success.
Because of this, some analysts believe Netflix wants to experiment with audiences in Latin America. According to them, by offering curated content that resonates with local audiences, rather than for American viewers, their number of paying users abroad shall rise.
Likewise, if this strategy works, it may be replicated in European and Asian markets.
Now, if only Netflix disclosed the release date for The Haunting of Hill House season two, I’d be at peace with the streaming giant.
I guess I’ll continue waiting for updates in that regard.
Wanna hear more? We recommend you listen to the following podcast episode: Netflix, SoftBank y AWS experimentan con Latinoamérica. You can find the time stamp available in the description.
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