The Netflix model is being copied by multinational companies around the world, because it gives consumer control over what they watch. The only problem other countries face – especially in the developing world – is the infrastructure to support the technology. Mexico has the infrastructure in some locations, and that is why Netflix started a service there last year.
The new player in Mexico is backed by the world’s richest man, Carlos Slim and his telecom company America Movil, Latin America’s largest mobile operator. Telcel (News - Alert), a subsidiary of America Movil in Mexico will be providing the service. By undercutting the price Netflix charges by almost a third, it is entering the market with the goal of capturing market shares with a long term view in mind.
Clarovideo is already offering services in several Latin American markets, operating in beta in Colombia and Argentina. The problem Netflix faced because of broadband related issues is less of a problem for Clarovideo, because America Movil’s Infinitum service is the largest broadband provider in the country. Slim’s companies are poised not only to take over any existing competition, but discourage new players from entering the market unless they have the right backing. In addition to providing the lowest price, the company will be able to offer multiple payment systems as part of the financial services of America Movil.
The company will charge 49 pesos for top or premium movies and 19 pesos for standard movies, in addition to the monthly subscription fee. Other companies providing the same type of service include Walmart’s Vudu, Totalmovie, Bazuca and others. The Latin American market is seeing an explosion in this type of entertainment service, and as more countries invest in infrastructure to deliver this type of content there will be a potential customer base of more than 650 million people in the region.
Even though Clarovideo is entering the market with a competitive price, there are reports claiming Netflix has already captured most of the available customer base in the country. Only time will tell if these customers will jump ship to save some money or stay with Netflix.
Edited by Brooke Neuman