Netflix and the IDB present a study on the financial impact of the audiovisual industry in Mexico

The cultural impact of the audiovisual industry is the most visible consequence of investing in series, movies, and documentaries. However, this industry also contributes significantly to the economic development of countries, and particularly Mexico, which has always stood out for its audiovisual productions. Specifically, for every $10 MXN invested in the industry, an additional $6 MXN are generated, accounting for a multiplying effect of 1.6.

These data were revealed during the Guadalajara International Film Festival with the presentation of the study titled The Financial Impact of Audiovisual Industries, commissioned by Netflix in coordination with the Inter-American Development Bank (IDB). The report seeks to quantify the impact of cinema, video, and television on the Mexican economy and its multiplying effect.

According to the report, in Mexico, for every $200 million MXN in investments to make a movie, an additional $127 million MXN are generated indirectly along the supply chain. That same investment then leads to the creation of hundreds of direct and indirect jobs, including producers, technicians, photographers, editors, costume makers, and animators, among many others. The scope and value of the multiplying effect does not only cover activities surrounding the audiovisual industry –like set building, visual effects, animation, or musical scores– but it impacts other industries, like transportation, raw materials, tourism, publicity, food and beverage, and legal, to name a few. 

The study states that, in 2021 alone, the audiovisual industry in Mexico generated total revenues worth $61.69 billion MXN, of which film production accounted for $14.769 billion MXN. It is expected that such revenues from film production will increase between 6% and 7% yearly until 2025.

In 2015, Netflix produced Club de Cuervos, its first original series in Mexico. Since then, the platform has continued investing in the production of films and series. Recently, the film Where the Tracks End premiered, which was directed by Ernesto Contreras, starred Adriana Barraza, and was shot in the states of Veracruz, Tlaxcala, and Puebla. As mentioned in the report, its production generated investments in other industries, including construction and raw materials. For example: To build the wagons and sets for the town, 5 tons of iron were used, amounting to almost 20 thousand one-meter rods (nearly four times the height of the Pico de Orizaba mountain!). Additionally, 8.5 tons of timber were purchased, equaling the weight of 283 doors; and for the props and scenery in the offices and schools featured in the movie, 480 kg of recycled paper were used, weighing as much as 1,765 books. 

By the end of last year, the Academy Award®-winning film Pinocchio by Guillermo del Toro –which included the participation of El Taller del Chucho, an animation studio based in Zapopan, Jalisco– earned worldwide success. All vendors who provided machinery and materials to build the sets and the stop-motion animated characters made in this workshop, as well as all hardware stores, lumber yards, and paint shops who provided supplies to Taller del Chucho, are local businesses from Jalisco.

These are just a few examples of the economic spillover effect and job creation that may result from the production of films and series in Mexico.

Regarding the study, Alejandra Luzardo, head of innovation and creativity for the Inter-American Development Bank, commented: “The Entertainment sector in Latin America plays a key role in the creative economy. If we put the audiovisual sector under a magnifying glass, we can see two trends draw out: On the one hand, streaming platforms are more and more interested in producing original local content. And on the other, there is a growing global demand for content produced here, both in Spanish and Portuguese. This highlights the potential for Latin America and the Caribbean to become an audiovisual exporting region. These trends have beneficial impacts on the region’s economy and job creation capabilities”.