Mexico’s digital video market – including subscription (SVOD) and transactional (TVOD) video on demand – grew an estimated 39% in 2016, establishing Mexico as Latin America’s second-biggest online video content distribution market, according to a recent report published in IHS Technology’s Media & Technology Digest.

Total online video consumer level spending in Mexico last year came in at 3.5 billion pesos ($218 million), according to the study, Competition and New OTT VOD Strategies in Mexico, made by IHS Markit analyst Laura Aguilera.

That figure pales before TV ad spend in Mexico. This was $2.9 billion in 2016, according to Jonathan Barnard, head of forecasting at Zenith.

But Mexico’s digital video sector still offers considerable growth potential as TV ad spend contracts. Growth is being driven by the launches of international (Netflix, HBO Go, Amazon Prime) and new local digital video services (Blim, ClaroVideo), the latter carrying large amounts of local and Spanish-language content, said IHS Markit’s Mathieu Yulzari, who works with Aguilera on IHS Markit coverage of Latin American online video.

Netflix is the market leader, followed by ClaroVideo and Blim, Yulzari added, saying that the robust uptick in VOD revenues is also buoyed by significant strides in smartphone adoption and, critically, broadband penetration rates; plus more affordable pricing for data plans which have been stimulated by 2014 Mexican telecoms reform that have greatly increased competition and investment in Mexican market.

Broadband household penetration, at 42% by the end of 2015, will rise to 54% by 2020, the report forecast. By 2020, digital video consumer spending in Mexico will rise to $500 million, with more than $400 million of that coming from SVOD services.

That doesn’t make Mexico the biggest VOD market in Latin America. That crown belongs to Brazil, which has become the sixth largest online video market in the world, valued at R$2.5 billion ($745 million) in 2015 and forecast to grow 25% in 2016 alone.

The robust growth of Mexican VOD services, though from a low base, will explain the assiduity with which VOD services, especially Televisa’s Blim, are ploughing into localisation, commissioning Mecican original services. This November, at Los Cabos Festival, Blim announced full details of its latest series project, “The Last Dragon,” written by Arturo Perez Reverte,  one of whose novels was adapted into “Queen of the South.”

Netflix has renewed “Club de Cuervos” and commissioned a second original series from Mexico, “Ingobernable,” starring Kate del Castillo.

“Economic growth will be a significant factor in improving the willingness of consumers to spend on media services,” Aguilera writes.

So the big question hanging over OTT growth in Mexico is how much it might be whammied by Donald Trump’s U.S. election victory.

Since Trump’s triumph, Mexico’s peso had slid 20% against the dollar.

“The population suffers the depreciation of the peso by cutting services such as pay TV or OTT (Netflix, Spotify) or delaying the renewal of devices such as smartphones or computers to a better economic scenario,” said Jorge Bravo, editorial director at Mediatelecom, a Mexico City-based telco-internet focused consultancy and news agency.

Bravo added: “We think the worst is yet to come, but we do not know how or in what way.”

But,  Bravo argued, “the depreciation of the peso affects the entire communications sector.” For example, pay-TV signal distributors charge pay-TV operators in dollars per subscriber. Contents become more expensive. The debts of the audiovisual and telecommunications companies are mostly in dollars, he added.

Beyond that, “on-demand or streaming content is also made more expensive by subscription. In general, an app download is also priced according to the dollar price,” Bravo observed.

If Mexico is anything like Brazil, in recession since mid-2014, it may be pay TV in general which suffers more than VOD services, however. According to another IHS Technology report, Latin American Pay TV Set Back by Economic Frailty, satellite service Sky Brazil lost 101,480 subscribers in first quarter 2016, though it clawed back 5,880 in second quarter by offering payment in local currency and a TV-Internet packages. Despite economic woes, however, Brazilian VOD growth remained “vibrant” last year, the study observed.