TBI Tech & Analysis: Why Lat Am originals are Netflix’s next big growth opportunity

Control Z

In this collaborative report with PlumResearch, Omdia’s Tim Westcott digs into the numbers behind Netflix viewing trends in the Latin American markets.

To stay ahead in the global streaming wars, Netflix has been building its offering of non-English programming, especially in Latin America, where paid memberships hit 39.94 million at the end of 3Q22.

“We want Netflix to be relevant to audiences all over the globe, and our local language titles are a differentiator for us,” reaffirmed the streaming service in the letter to its shareholders in 2Q22.

To make its point, Netflix singled out the success of Pálpito (The Marked Heart), a Colombian series that charted in the top 10 in 81 countries by its second week on the service, according to the Showlabs measurement platform powered by PlumResearch.

In 3Q22, Netflix name-checked Sintonia – season three of the drama generated 38 million hours viewed in Brazil.

Sintonia

According to Omdia, Netflix will reach 41.6 million subscribers in Latin America by the end of 2022, including 13.7 million in Brazil, 11.1 million in Mexico, and 5.3 million in Argentina. By the end of 2027, its subscriber base in the region is forecast to grow another 30% to 52.3 million.

Netflix has ramped up its production around the world with local partnerships. In Brazil, it is planning to produce 50 original series in 2022, and in Mexico, the streamer invested $500m in producing 40 original titles in 2021. These local-language productions serve two main purposes; they add a further layer of localization to the streaming service on top of local currency pricing, partnerships with distribution partners, and acquired content. Additionally, they could also spring international breakout hits like Squid Game and La Casa de Papel.

Unsurprisingly, the two biggest markets for Netflix in the region (here we focus on seven: Portuguese-
speaking Brazil and Spanish-speaking Mexico, Argentina, Colombia, Peru, Chile, and Ecuador) also saw the biggest usage in 3Q22, according to PlumResearch. In Mexico, audiences streamed 3.2 billion hours of content on Netflix, with 73.18% of that time spent on series. The Drama and Action & Adventure genres had the biggest slice of that viewership: 29.7% of all series watched were Drama, and 17% were Action & Adventure. The top three series in the quarter were: Stranger Things with 13.8 million unique viewers (UV), Extraordinary Attorney Woo (7.3 million UV), and Dahmer (6.3 million UV).

In turn, Brazilians watched 4.02 billion hours of programming during the same period, with 73.24% of that spent on series, with a preference for Drama (32.1%) and Action & Adventure (30.9%). Their top three series were Stranger Things (20 million UV), The Sandman (9.6 million UV), and Cobra Kai (9.2 million UV).

Cumulatively, these seven markets accounted for 10.83 billion total hours watched in 3Q22, an impressive increase of 7.55% from 2Q22, and a total of 129.39 million unique viewers. Netflix still has room for growth in the region.

Key takeaways

– Netflix is increasing its commissioning of non–English language content around the world, launching 39 new Latin American series in 2021

– According to data from PlumResearch, Brazilians and Mexicans are the heaviest Netflix users in the region, registering 2,988 and 2,315 million total hours watched (TTW) of series, respectively, in 3Q22

– Brazilians also watched the most Netflix originals, which accounted for 42% of TTW in the period

– Netflix originals accounted for 33% of TTW in Ecuador, where Netflix has yet to produce local content

– In Mexico, 12.5% of the time consumers spent streaming all series went to Latin America– produced content (both acquired and originals)

– Across all seven markets analyzed, the catalog share of Netflix originals was 55%, up from just 14% in 3Q22

– Mexican series Control Z was its most successful local production in 3Q22, featuring in the top 10 in Mexico, Brazil, and five other Latin American markets with a combined total of 12.2 million unique viewers

– However, the global hit Stranger Things was also number one in Latin America, with 51.1 million unique viewers

The excerpt above is taken from the report, ‘Netflix Originals: Making a difference in Latin America’, available here, by Tim Westcott, senior principal analyst for digital content & channels at Omdia, which like TBI, is part of Informa.