“In the last month of the year, technological consumption tends to increase and a subscription to a platform is already one of the ‘classic’ gifts in December. This, added to the fact that it is a month in which users have time to consume content, gives an additional boost to the platforms”, comments Radamés Camargo, an analyst at The Ciu consultancy.
OTT service providers (Over The Top, for its acronym in English) are aware of the relevance of the last month of the year in terms of consumption, but come January the challenges of maintaining and adding more consumers are once again among the challenges to face.
Low prices and prepaid cards
Netflix, which lost a million subscribers in the second quarter of 2022, launched a new subscription model with ads for 99 pesos in Mexico in November, which allowed it to drive the activation of new accounts in the last month of the year. While Disney+ maintains its rates of 150 pesos per month.
“Netflix’s new quota has not been very attractive in other countries, but in Mexico, as there is a purchasing power issue due to inflation and a possible recession, added to the diversity of platforms that exist in the industry, the new tariff could give it a push or help keep their customers ”, says the expert in streaming issues.
HBO Max, who is the third player in this industry with a 10.3% market share, launched a promotion at the end of the year to acquire a subscription to his platform, which he still maintains, which represents a saving of three months, that is, instead of if they pay 1,788 pesos they will pay 1,249 pesos.
Another channel that already benefits streaming companies and this year could be a great ally for consumers to maintain a subscription, is the prepaid cards with which users can access their catalogs until the balance runs out.
“Prepaid cards have become popular. This type of access to streaming, on the one hand, solves the difficulties of some unbanked users to access the platforms, and on the other, it is very easy to find them since they are sold in convenience stores”, says Camargo.
Subscriptions with advertising and video games
Another alternative to pay and retain users is the insertion of advertising in the content, in exchange for a lower subscription price.
Although this business model breaks one of the great virtues of the platforms – avoiding commercials for the user to see their favorite content – it is an alternative to access the platforms at a low price and maintain the profitability of the business.
Vixstreaming from TelevisaUnivision, reached the market with two subscription models: free and by fee, which allowed it to increase the company’s revenue from advertising and subscriptions by 6%.
Netflix, which already has an ad-supported subscription in Mexico, will also bet on the video game through a study where it will create this type of content that will be hosted on its platform.
“Players in the video-on-demand industry must find other options, not only in terms of prices, but in terms of new assets that allow them to differentiate themselves from their competitors,” Camargo concluded.