video on demand - cause and effects
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MARCELA KLEINSEPTEMBER/2013
What are the causes and effects of the increased use of
“Video on Demand”?
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and Cable TV Fee Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and Cable TV Fee Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Video on Demand: Introduction and definition
Video consumption
Free access - Youtube
Video On Demand known as VOD is a process that enable users to watch videos whenever they wish to.
Required: Device (TV, Mobile, Tablet, Computer) + internet connection + content provider
Video on Demand: Introduction and definition
Entertainment business
Do not need to: follow the schedule of the TV channels move physically to a certain place to watch or rent a
movie
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and Cable TV fee Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Cause and Effects:
Internet Access and AudienceUSA Crisis and Cable TV feeNetflix VOD Operation and Content
NegotiationCable TV own VOD products and
Market competition
Cause and Effects:
Internet Access and Video Audience
USA Crisis and Cable TV fee Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
Internet Access and Video Audience
Changed how to communicate and get entertained: habit of watching TV
The total video
audience was concentrated
on the big screen
Internet Access and Video Audience
Internet changed how to communicate and get entertained: habit of watching TV
Computers, notebooks and smartphone are now little televisions accessing websites that provide videos
Internet Access and Video Audience
Share of Television Viewing by Device
(18-44 years old)348 responses
The Multiscreen Marketer, page 15, online
Internet Access and Video Audience
Public consequence: TV programs were recorded and upload on Youtube Find it online its favorite show or news
Business consequence: New scenario could affect advertisement revenue
(Advertisement) Build a Youtube channel uploading their own content
Cause and Effects:
Internet Access and Audience
USA Crisis and Cable TV fee
Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
USA Crisis and Cable TV fee
USA economic crisis - 2007 - peak in 2009. Consequences:
Financial arrangements Identify other possibilities to access entertainment
“A sharp rise in housing vacancies due to the
mortgage crisis alone has led to five million fewer U.S.
households viewing pay-TV services”.
(The NPD Group, para. 2, online)
USA Crisis and Cable TV fee
Netflix was already known in the market by delivering DVD’s.
The company saw in this scenario the opportunity to grow its business in a niche not yet explored: online.
Cause and Effects:
Internet Access and Audience USA Crisis and Cable TV fee
Netflix VOD Operation and Content Negotiation
Cable TV own VOD products and Market competition
Netflix VOD Operation and Content Negotiation
Netflix background:
Reed Hastings had to pay $40 in fines due date returning of the movie Apollo 13
1998: Founded NETFLIX.
His clients would choose the title
online, order the DVD, receive it at home, and return
by mail
1999: monthly subscription.
No due
dates, late fees, or
shipping and handling -
2007: one billion DVDs
delivered
Netflix VOD Operation and Content Negotiation
Now: + than 37 millions subscribers*Do not disclose the number of titles in its
catalogWas never able to negotiate movie releases
with the content providerNew releases are sold as ‘gold’ and they are
exhibited in the premium hourNetflix subscribers = US$ 10/month - full access to a “second hand” content
Cable TV subscribers = more than US$ 100/month – some new releases + scheduled “second hand” content
*Netflix.com – 2013
Netflix VOD Operation and Content Negotiation
With the healthy business situation content providers started to “coming to Netflix for deals instead of vice versa.”
Content providers had to start to consider a new business model to sell content. Studios “are considering them a viable distribution partner. ”
(Fitzgerald, qtd in Foley, para. 2, online)
Cause and Effects:
Internet Access and Audience USA Crisis and Cable TV fee Netflix VOD Operation and Content Negotiation
Cable TV own VOD products and Market competition
Cable TV own VOD products and Market competition
After watching the VOD trend cable TV consider creating their own VOD
Client subscribe for regular Cable TV + have access to content by others devices
Cable TV own VOD products and Market competition
“Foxtel Play gives even more Australians who might not be able to access the core service the freedom and flexibility to enjoy Foxtel across multiple connected devices and at price points to suit different budgets and
tastes.” (Freudenstein, qtd in Griffith, para. 19, online)
Cable TV own VOD products and Market competition
Consequence for clients when a market competition exist:
prices became more affordable the quality of the product and service improves companies start to create ever better business option to
hold consumer loyalty.
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and “expenses” on Cable TV Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Summary
Different areas had to develop before Video On Demand became a possibility
Economic aspects that happened during the last 6 years had an important role
Although cable Tv seemed to have had a solid empire, the emergence of Netflix shook the business structure
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and “expenses” on Cable TV Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Discussion
Do you have the habit of waiting for a TV program to start?
Do you watch video online? Are they legal? (from a provider, such as Foxtel) or illegal? (For a Youtube channel)
Would you pay to for a Video on Demand product?
Do you have Netflix in your country?
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and “expenses” on Cable TV Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Conclusion and Recommendation
VOD is winning a fixed position in the society New habits will probably be irreversible
The sensation of having the power of choice will increase even more in the following years
The convenience of reaching any content anytime and anywhere will became regular
Conclusion and Recommendation
All parts of this market will need to adapt and improve their service:
devices industry - updated to video trends to produce devices capable to support the upcoming features
content producers and provider - develop a suitable scrip for the online viewer
telecom companies - provide high internet connection advertisement agencies – create campaigns avoiding
the traditional TV advertisement language
Conclusion and Recommendation
In a close world where options to get
entertainment will not be the main issue perhaps the next
challenge will be how to help the audience to choose what they will
watch…
Agenda
Video on Demand: Introduction and definitionCause and Effects:
Internet Access and Audience USA Crisis and “expenses” on Cable TV Netflix VOD Operation and Content Negotiation Cable TV own VOD products and Market competition
SummaryDiscussionConclusion and RecommendationReference List
Reference List
‘The Multiscreen Marketer’, 2012. IAB. Retrieved 25 August 2013 from http://www.iab.net/media/file/The_Multiscreen_Marketer.pdf
‘The NPD Group: Average Monthly Pay-TV Subscription Bills May Top $200 by 2020’, 2012. NPD Group. Retrieved 25 August 2013 from https://www.npd.com/wps/portal/npd/us/news/press-releases/pr_120410/
Fitzgerald, B., qtd in Foley, M., 2013. ‘Here’s Why Content Providers Suddenly Adore Netflix’, Wall St Cheat Sheet. Retrieved 25 August 2013 from http://wallstcheatsheet.com/stocks/heres-why-content-providers-suddenly-adore-netflix.html/?a=viewall
Freudenstein, R. qtd in Griffith, C., 2013. ‘Just hit play: Foxtel launches broadband internet ground-breaker’, The Australian. Retrieved 25 August 2013 from http://www.theaustralian.com.au/australian-it/personal-tech/just-hit-play-foxtel-launches-broadband-internet-ground-breaker/story-e6frgazf-1226687739169
Netflix, 1997 (updated 2013) Retrieved 25 August 2013 from https://signup.netflix.com/MediaCenter/Overview
THANK YOU.
Contact maklein87@gmail.com
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