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Netflix's Latin American Strategy
A deep dive into local content and audience preferences in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru.
BY ANDRZEJ LATKA
Netflix has experienced tremendous growth in Latin America (LATAM) in recent years, with Brazil and Mexico leading the way in terms of local production and subscriber numbers. As the streaming giant continues to expand its footprint in the region, it has invested heavily in producing original local-language content to cater to local audiences. But has this investment been paying off?
Key findings:
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Local-language productions can lead to international breakout hits for Netflix, such as Squid Game, Lupin, or La Casa de Papel.
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Consumers in all seven LATAM markets are shifting to spending more time on Netflix's original programming as the number of originals in the Netflix library has grown.
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Top local titles like Triptych (Triada in Spanish), Eva Lasting (La primera vez in Spanish), Lady Voyeur (Olhar Indiscreto in Portuguese), and Argentinian Community Squad (División Palermo in Spanish) performed well across all seven markets.
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Cumulatively, the seven markets accounted for 10.4 billion total hours watched (THW) in 1Q 23, and a total of 171.2 million unique viewers (UV).
Top local titles performed well across all seven markets
With Netflix determined to expand its footprint in LATAM, the streaming service commissioned fiction TV series, films, documentaries, and reality TV shows. To see what was resonating with audiences in all seven markets, PlumResearch pulled the top 10 local-language series from 1Q 23.
Brazil and Mexico lead the way with local production
According to Omdia, Netflix will reach 40.3 million subscribers in LATAM by the end of 2023, including 14.4 million in Brazil, 12.2 million in Mexico, and 5.5 million in Argentina. By the end of 2027, its subscriber base in the region is forecasted to grow another 15% to 52.3 million.
10.4B total hours watched by LATAM’s viewers spent on Netflix content (1Q 23)
In Mexico, audiences streamed 3.1 billion hours of content on Netflix, with 69% of that time spent on TV series. Comedy and Action & Adventure genres had the biggest slice of the viewership with 22.3% of all series watched being comedy, and 17.8% were action & adventure.
The top three series in the quarter were: Wednesday with 7.2 million UV, Sing (6.9 million UV), and The Glory (6.4 million UV).
In turn, Brazilians watched 3.8 billion hours of programming during the same period, with 73.7% of that spent on series, with a preference for Comedy (22.2%) and Animation (15.8%). Their top three series were The Endless Night (11.4 million UV), You (9.5 million UV), and Outer Banks (8.8 million UV).
Cumulatively, these seven markets accounted for 10.4 billion total hours watched in 1Q 23, and a total of 171.2 million unique viewers. That said, Netflix still has room for growth in the region.
Netflix UV and series THW by country
Brazilians spent the most time watching Netflix original series, with about 55% of their THW going toward these productions. Ecuadorians spent the least time, and consumers in the other five markets fell somewhere in the middle. For context, U.S. viewers spent 51.5% of their time on Netflix’s original series during the same period.
According to PlumResearch, the consumer demand for local-language content is clear. In Mexico, 11.3% of the time consumers spent streaming all series in 1Q 23 went to Latin America-produced content, both acquired and originals. The other six markets show a similar trend. Thus, as Netflix continues to ramp up local production in the region, we expect these viewership numbers to grow markedly.
Data changes: Comparing 1Q 23 to 3Q 22
In comparison to 3Q 22, viewership of Netflix series across LATAM presents two clear trends. In general, the total time spent watching decreased across the board. For example, the 2,829 million hours spent watching series in Brazil in 1Q 23 represents a 5% decrease compared to 3Q 22, while in Argentina this decrease was 17%.
On the other hand, the share of LATAM content in viewing rose, especially for Netflix Originals. Over 20% of time spent watching in Colombia was spent on LATAM content (up from 14%), of which half was specifically Colombian content – undoubtedly driven in a large part by the exceptional performance of Eva Lasting.
What degree has the Netflix clampdown on sharing affected Latin America?
Last year, Netflix implemented limitations on password sharing in Chile, Costa Rica, and Peru. The effect on revenue of this plan is not obvious, but it is certainly effective. We found that the mean number of profiles that were watching per paying account in Chile dropped by 7% between the implementation of these measures and now.
ROI of Netflix's Local-Language Productions in Latin America
Overall, Netflix's local-language productions serve multiple purposes, including creating partnerships with local production companies and talent, adding a layer of localization to the streaming service, and serving as a source of homegrown content that can be recommissioned and built into franchises. With the potential for international breakout hits like Squid Game, Lupin, and La Casa de Papel, local investments in LATAM have the potential for significant ROI.
Andrzej Latka is the Chief Analytics Officer at Poland-based PlumResearch. Prior to his current role, he served as a data analyst at Riot Games in Los Angeles. He holds a Bachelor's degree in Physics from Saint Joseph's University, followed by a Ph.D. from the University of Chicago.
