Welcome to the blog of Dr. Lisa Burns' Media Studies senior capstone class (Section A) at Quinnipiac University. If you're looking for the latest on media industry trends and insightful media analysis, you've come to the right place.
Sunday, January 22, 2017
Media Convergence & Multiple Screens Blog 1, Question 2 (Jan. 31st)
How sustainable are the business models of SVOD services like Netflix,
Amazon, and Hulu? Limit: 8 responses
Last year Netflix saw their largest growth in history. “The company grew its subscriber base by 7.05 million members during the period bringing its total membership to 93.8 million” (Jarvey). During the last quarter of the year in 2016 Netflix released an original drama, The Crown, which won the Golden Globe for best TV Drama. The Crown cost Netflix $130 million in production cost and like we talked about in class, they are not afraid to push the boundaries and spend a good amount of money on content. At the beginning of 2016 Netflix expanded internationally to almost 130 countries and Amazon followed in December to expand internationally. Now they are aiming to increase their international subscribers with Amazon expected to hit 64 million subscribers worldwide by 2020 and Netflix is expected to hit 130 million subscribers by 2020 (Szalai). This is a huge financial step that will pay off for the two companies in the long run as long as they keep providing content that people are excited about. Netflix is selective about what content they will provide and unlike Hulu and Amazon they do not have a deal with services such as Showtime or HBO. Hulu has an advantage over both Amazon and Netflix because they have stacking rights and are able to “distribute programming through pay-TV VOD services” (Sikka) but they still fall behind the curve in user preference. Big media conglomerates such as Time Warner’s, Disney, Fox and Comcast all have large stakes in Hulu. This is gives Hulu the advantage because its able to stream current episodes of TV shows such as Modern Family, The Middle, SNL, The Bachelor and The Daily Show. For consumers who do not have a cable subscription and are not able to access these shows online can subscribe to Hulu and keep up to date and even watch past seasons on demand. Since Hulu is not available internationally, this is a big advantage other SVOD.
With the amount of quality original content that both Netflix and Amazon are putting out, they will only continue to grow and be sustainable. In my opinion Hulu original content is lackluster compared to what Netflix and Amazon have been putting out. Hulu taking control of former Fox show The Mindy Project definitely gained them new subscribers, but their other original content does not seem to target any specific audience or audiences. Netflix is reaching out to specific markets with the reboot of shows such at Fuller House, Gilmore Girls and Wet Hot American Summer First Day of Camp and the adaptation of A series of Unfortunate Events. They announced that they have acquire Jerry Seinfeld successful series Comedians in Cars Getting Coffee from Sony owned Crackle and has paid a reported $40 million for comedy specials from Chris Rock (Jarvey). They have also created successful content from comedian Chelsea Handler. On top of original content Netflix has thousand of popular movies and tv shows that you can not watch anywhere else. Unlike Netflix, Amazon has branched off and offers HBO, Showtime, Starz and more. They have also branched off to include workout-streaming programs. “Amazon has also begun exploring two other business models that, so far Netflix has ignored: sports rights and partnerships with third-party content providers” (Szalai). There have been talks about a deal with national sports leagues such as the NBA and NFL. If Amazon goes through with this deal I think they will gain even more subscribers. All three of these SVOD have advantages that make them sustainable in this fast paced market. Each SVOD reaches a specific audience and offers them a different feature that the other SVOD cannot. This is what allows Netflix, Hulu and Amazon all to be successful and competitive.
Sikka, Puneet. "TV Stacking Rights – Why Netflix’s Loss in Hulu’s Gain," Market Realist 22 June 2015. Web. Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web. Roxborough, Scott and Georg Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon," The Hollywood Reporter 28 Dec. 2016. Web.
There is no disputing that a number of SVOD services such as Netflix, Amazon, and Hulu have been profiting and growing over the past few years. For example, Netflix, the brand leader in streaming services, launched its streaming service in 2007. Their revenue grew from $1.2 billion to $6.8 billion in only eight years (Masters). That being said, it does not mean that SVOD service business models’ are sustainable; they should be looked at on a case-to-case basis. In order to explore the sustainability of SVOD business models, we will look at the industry’s top three streaming services; Netflix, Amazon, and Hulu in order from most profitable to least profitable. Netflix has disrupted traditional business models by creating new norms and new means to an end. What exactly does that mean? Netflix was a pioneer to instill change that would quench the thirst for instant gratification and in-home entertainment. If you can remember, Netflix actually used to ship DVDs to their subscribers’ homes. That was just a small hiccup for traditional business models when looking at the larger picture, although, Blockbuster would probably disagree. Regardless, Netflix still pushed the envelope until they started offering their streaming service I mentioned before (which started in 2007). Since ‘07, they have gained 47 million subscribers in the United States, 36 million subscribers in approximately 190 other countries, and over 30 original series (Masters). The reason? Netflix is cheaper than cable packages (traditional business model) and offers way more content to more than one screen in your house…instantly! Amazon is the second largest SVOD service who is hot on Netflix’s tail. There is a fear that Netflix will have a “content monopoly” over a majority of the industry, but Amazon Prime has been steadily earning a loyal base of subscribers. At the close of 2016, international analysts reported that Netflix will remain the dominant force in Western Europe for SVOD services, but estimates that Amazon Video will be available in 15 Western European countries at the close of 2017. Both Netflix and Amazon would make up for about ¾ of Western Europe’s SVOD subscriptions (Dan). The only reason why I bring that up is because it is scalable to the content control that Netflix and Amazon makeup in the United States. That leaves one remaining player; Hulu. Hulu is failing in the big picture of SVOD services. Currently, Netflix is the top consumer preference for SVOD providers. According to recent study of 1500 people 13 years an older, more than 50% of people use Netflix, around 30% of people use Amazon, and only 11% use Hulu. All three SVOD services have similar business models that reject traditional norms and conform to the new ones, so can we deem SVOD business models sustainable? No. The business that Netflix has created is sustainable, but the SVOD business model as a whole will need to constantly be improved in order to keep creating new norms the same way Netflix did and has continued to do since 2007.
Works Cited Dan. "Netflix and Amazon Account for Nearly 2/3 of Western European SVOD Subscriptions." Netflix and Amazon Account for Nearly 2/3 of Western European SVOD Subscriptions. N.p., 01 Jan. 1970. Web. 30 Jan. 2017. Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History." The Hollywood Reporter. N.p., 18 Jan. 2017. Web. 30 Jan. 2017. Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The Hollywood Reporter. N.p., 14 Sept. 2016. Web. 30 Jan. 2017. Sikka, Puneet. "TV Stacking Rights: Why Netflix's Loss in Hulu's Gain." Yahoo! News. Yahoo!, 22 June 2015. Web. 30 Jan. 2017.
History shows that technology is constantly changing year-to-year, month-to-month, and even day-to-day. The continual changes that we see happening are astonishing, especially in the television industry, where many people don’t watch live television anymore. From personal experience, I always find it aggravating watching live television and having to sit through the tons of commercials during breaks. This has led people to recording their weekly shows and opting to not watch it live. This has also led to the rapid spread of SVOD services such as Netflix, Amazon, and Hulu. Nielsen reported that, “the rise in technology and TV-connected devices has given consumers, marketing agencies and advertisers a vehicle for boundless choice” (Forces of Nature: The Media Universe Moves at the Pace of Technological Change). The reason for this is that these services are easy to use and easily accessible on various devices such as iPhones, tablets, iPads, computers, etc. having endless ways to use the services. After reviewing this weeks readings and looking further into the topic, it is clear that the business models of SVOD services are extremely sustainable and will be around for a long time, even while each service is different in it’s own way. More and more people are using Netflix, Amazon, and Hulu as their only form of television viewing. The Hollywood Reporter recently said that Netflix, one of the services in particular, gained more subscribers last year than they ever have. “The company grew its subscriber base by 7.05 million members during the period, bringing its total membership to 93.8 million. The company also saw its largest year of growth in its history, setting a new benchmark during a year in which it expanded into 170 new territories” (Jarvey). As Netflix grows and expands all over the country, how do we know what will happen to Amazon and Hulu? Well, I did some further research and discovered that Newsweek reported Amazon Prime having more subscribers than Netflix in the United States (Levy). It’s actually interesting to see the similarities and differences between the three services, and figure out why somebody picks one over the other. Netflix and Amazon are somewhat in competition with one another as they each have their pros and cons, as well as premium options.
Newsweek reported that Hulu no longer has free streaming and is now focusing on the premium options (Levy). Everyone has a different opinion on which service to choose, but these on-demand services are taking over, “and it's likely consumer choice will only continue to expand” (Levy). As consumer choice continues to expand, this means that the SVOD services will continue to sustain and take over the television industry even further than it has already. Although we can’t predict the future, these three services are certainly heading in an upward direction. As technology continues to change and transform, there is undoubtedly a positive future for the SVOD services including Netflix, Amazon, and Hulu.
Works Cited
"Forces of Nature: The Media Universe Moves at the Pace of Technological Change. Nielsen, 5 Jan. 2016. Web. 30 Jan. 2017.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History." The Hollywood Reporter, 18 Jan. 2017. Web. 30 Jan. 2017.
Levy, Adam. "Hulu, Amazon Still Looking Up at Netflix." Newsweek. N.p., 11 Sept. 2016. Web. 30 Jan. 2017.
I think its safe to say that SVOD services and providers are on the up and up and slowly taking the television and streaming business by storm. The ability to have such easy access to television shows and movies is the easy way of media that many people are looking for in today’s world. The London-based group IHD Markit, has been studying both Amazon and Netflix and they expect double-digit grown from both of the companies. Amazon Prime has 30.5 million subscribers today and HIS expects that number to grow to approximately 64 million by the year 2020 (Roxborough and Szalai). Rival company Netflix is expected to grow from 86 million subscribers to top 130 million by 2020 (Roxborough and Szalai). These numbers are living proof of the change we are seeing in media and how we prefer to consume our television shows and movies. You don’t see many people sitting down on the weeknights anymore to watch their show that is on once a week. The concept of binge watching is much more simple. Most people like to run on their own schedules, so when we find an hour during the day where we have some down time, we open our laptops and watch an episode of our show on Netflix, Amazon, Hulu, etc… Amazon is slowly going to catch up to Netflix simply because of the price difference. Amazon services are $2 less than Netflix and that alone can attract more subscribers. Another reason why Amazon is slowly catching Netflix is because of their production of original shows and content. Many of Netflix’s top shows are made as originals and only viewable through Netflix. HIS also estimates that Amazon will spend $337 million on original content this year, which is up from $176 million in 2015…but then you see Netflix, and they budgeted an estimated $1.2 billion for originals in 2016 (Roxborough and Szalai). Some of the criticisms for Netflix, Amazon, and other providers is that people still do not see these companies as an alternative for their viewing, it is seen as an add-on or an extra service (Masters). From what I’ve seen at friends houses is most people still have their basic cable provider and still continue to pay for that as well as Netflix and Amazon. These companies obviously figured out a way to combat this issue by striking deals with cable providers that have Netflix and their services automatically installed on the top box and the service provide in your cable bill. Netflix, Hulu, Amazon, and others will continue to succeed and grow, but the question will be which of these companies and services will out last the others. As the years go on, more and more options are becoming available and services are rapidly expanding and competing to gain the most users.
Works Cited: Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web.
Roxborough, Scott and Georg Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon," The Hollywood Reporter 28 Dec. 2016. Web.
Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The Hollywood Reporter. N.p., 14 Sept. 2016. Web.
Today’s consumers of television shows and movies want to be able to view their content whenever, wherever, and in a large amounts. We all like having the ability and knowing that we can watch let’s say Arrow at 2 am off of our tablet because we are watching the latest season online. With consumers having this mentality SVOD services have been on the rise of the last few years, becoming strong competitors against traditional networks and television viewing. One these strong competitors is the SVOD Service Netflix, who has been creating original content as well as gaining rights to stream seasons of network shows. “Nobody really thought they’d be a competitor on the originals market,” (Masters, 2016). However, Netflix is a strong competitor in the original market due to their succeeding efforts to create quality original content that not only viewers want, but that is also attracting big names and various awards. Although having original content is helping Netflix became a global channel they amount of money they are shelling out to produce the content could potentially have a negative effect in future on the company. Netflix is a company that has a business model that correlates to Masters article, “Deep-pocketed buyer that is snapping up an array of material, “ (Masters, 2016). This means that Netflix is a company that is very willing to spend top dollars to produce content that will compete strongly against traditional networks and other SVOD content. For example, Netflix is estimated to spend 6 billion dollars this year for their library and original content and is known for paying millions of dollars for streaming rights. This business model however, can easily fall apart if for two major reasons, one being not a steady or yearly increase in subscriptions, as well as not having a stakeholder. With amount Netflix is shelling on content, “Could become challenging, unless they maintain the steady growth in subscription levels,” (Masters, 2016). Netflix makes a lot of their revenue from people like us, their subscribers. However, if the amount of subscriptions ever comes to lull there is a strong guarantee that Netflix while raise the prices of their monthly subscription. This will have affect on their business due to other competing SVOD services, such as Amazon. Amazon offers VOD services through user’s Amazon prime account. Yes, Amazon prime is a lot more expensive and annually compared to Netflix a subscription, but Amazon has created a strong business model that puts them in a place to become a, “multi-channel network,” due to their, “streaming partnership program…allows Amazon prime members to create their own a la carte pay TV service by adding subscriptions,” (Roxborough & Szalai, 2016).
Additionally, Amazon is not only giving users the annual Amazon Prime option, but they started, “ Offering a new payment option for full Prime membership of $10.99 monthly, with no annual commitment,” (Spangler, 2016). This is a great business plan. I think it will help Amazon compete well with other SVOD services because they will receive a lot more customers because it is a monthly subscription that can be ended at anytime. Ultimately, I believe this addition will push Amazon further as a competitor in the market.
Works Cited Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The Hollywood Reporter. N.p., 14 Sept. 2016. Web. 28 Jan. 2017.
Spangler, Todd. "Amazon Launches Prime Video Standalone Option for $9 Monthly." Variety. Variety, 18 Apr. 2016. Web. 28 Jan. 2017.
Roxborough, Scott, and Geprge Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon." The Hollywood Reporter. N.p., 28 Dec. 2016. Web. 28 Jan. 2017.
Streaming Video on Demand(SVOD) services are becoming more popular then ever. Today’s consumers are becoming accustom to the ability to have the content they want at the click of a button. The idea of appointment television has become a way of the past in many cases. However, people still tune in for sporting events and special awards shows. Though to watch these programs they may not be tuning on a traditional television but using the streaming organizations website.
Over the past years SVOD services have grown at exceptional rates. Netflix, was the first of the popular services originally offering DVD rentals that did away with traditional rental stores and then moved into online streaming of series before getting involved in creating their own content. They are starting to expand quickly and internationally by adding more multli- language options. This past year their fourth quarter grew more and took them to a total of “93.8”(Jarvey) subscribers. Netflix is growing at an exceptional rate and it is unclear to some if they can keep going at the rate they are or if a competitor such as Hulu or Amazon will step in. However, CEO Reed Hastings commented on the concern and stated, “The big picture is remarkably steady” (Javey). However, competitors are coming in and adding to the competition.
Technology is ever changing and growing at faster and faster rates every day. The increase we see technology has also created an increase in impatience. Consumers want their media wherever they are within the click of a button. This has helped to create space for many things, especially SVOD services like Netflix, Amazon and Hulu. “the rise in technology and TV-connected devices has given consumers, marketing agencies and advertisers a vehicle for boundless choice,” (neilson.com). These SVOD services were established during a time of increased technology change and have learned to adapt to it. As these businesses continue to move with the ever changing technology and the desires of consumers, they show promising sustainability.
The instant streaming and little to no commercials that SVOD services provide have cause many people to ‘pull the plug’ and go cable-free. Having instant access to your favorite TV shows is much more appealing than having to wait week to week. According to The Hollywood Reporter, Netflix obtained more subscribers during the fourth quarter of 2016 than any other quarter in their history of being a streaming service. “The company grew its subscriber base by 7.05 million members during the period, bringing its total membership to 93.8 million,” (Jarvey, hollywoodreporter.com). Netflix also expanded their services into 170 new territories. Millions of people are turning to Netflix because of their mix of cable/network shows and original content, “spending $6 billion a year on programming and scored 54 Emmy nominations this year,” (Masters, hollywoodreporter.com).
Amazon, though slightly behind Netflix, has increased subscribers and done very well with its original content. Like Netflix, Amazon Prime has continued to stay on top of technology and the wants of consumers. They have made deals with HBO and Showtime that have allowed Amazon to stream their originals to subscribers. Hulu, though the bottom of the three, has made the proper business choices to create a substantial amount of followers. Hulu gives its subscribers the ability to catch a new show the day after it airs. They do a good job of giving today’s impatient consumers the product as soon as possible.
I think that the main reason these SVOD services will be sustainable, is their ability to work with the ever-changing technological climate. They work with traditional TV media to deliver the desired content and have put substantial amounts of money (namely Netflix) into programming and original content. There will always be a want for this type of television.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web.
Masters, Kim. "The Netflix Backlash – Why Hollywood Fears a Content Monopoly," The Hollywood Reporter 14 Sept. 2016. Web. "Forces of Nature: The Media Universe Moves at the Pace of Technological Change." Nielsen.com. Accessed 10 Jan. 2016. Web.
Last year Netflix saw their largest growth in history. “The company grew its subscriber base by 7.05 million members during the period bringing its total membership to 93.8 million” (Jarvey). During the last quarter of the year in 2016 Netflix released an original drama, The Crown, which won the Golden Globe for best TV Drama. The Crown cost Netflix $130 million in production cost and like we talked about in class, they are not afraid to push the boundaries and spend a good amount of money on content. At the beginning of 2016 Netflix expanded internationally to almost 130 countries and Amazon followed in December to expand internationally. Now they are aiming to increase their international subscribers with Amazon expected to hit 64 million subscribers worldwide by 2020 and Netflix is expected to hit 130 million subscribers by 2020 (Szalai). This is a huge financial step that will pay off for the two companies in the long run as long as they keep providing content that people are excited about.
ReplyDeleteNetflix is selective about what content they will provide and unlike Hulu and Amazon they do not have a deal with services such as Showtime or HBO. Hulu has an advantage over both Amazon and Netflix because they have stacking rights and are able to “distribute programming through pay-TV VOD services” (Sikka) but they still fall behind the curve in user preference. Big media conglomerates such as Time Warner’s, Disney, Fox and Comcast all have large stakes in Hulu. This is gives Hulu the advantage because its able to stream current episodes of TV shows such as Modern Family, The Middle, SNL, The Bachelor and The Daily Show. For consumers who do not have a cable subscription and are not able to access these shows online can subscribe to Hulu and keep up to date and even watch past seasons on demand. Since Hulu is not available internationally, this is a big advantage other SVOD.
With the amount of quality original content that both Netflix and Amazon are putting out, they will only continue to grow and be sustainable. In my opinion Hulu original content is lackluster compared to what Netflix and Amazon have been putting out. Hulu taking control of former Fox show The Mindy Project definitely gained them new subscribers, but their other original content does not seem to target any specific audience or audiences. Netflix is reaching out to specific markets with the reboot of shows such at Fuller House, Gilmore Girls and Wet Hot American Summer First Day of Camp and the adaptation of A series of Unfortunate Events. They announced that they have acquire Jerry Seinfeld successful series Comedians in Cars Getting Coffee from Sony owned Crackle and has paid a reported $40 million for comedy specials from Chris Rock (Jarvey). They have also created successful content from comedian Chelsea Handler. On top of original content Netflix has thousand of popular movies and tv shows that you can not watch anywhere else.
DeleteUnlike Netflix, Amazon has branched off and offers HBO, Showtime, Starz and more. They have also branched off to include workout-streaming programs. “Amazon has also begun exploring two other business models that, so far Netflix has ignored: sports rights and partnerships with third-party content providers” (Szalai). There have been talks about a deal with national sports leagues such as the NBA and NFL. If Amazon goes through with this deal I think they will gain even more subscribers. All three of these SVOD have advantages that make them sustainable in this fast paced market. Each SVOD reaches a specific audience and offers them a different feature that the other SVOD cannot. This is what allows Netflix, Hulu and Amazon all to be successful and competitive.
Sikka, Puneet. "TV Stacking Rights – Why Netflix’s Loss in Hulu’s Gain," Market Realist 22 June 2015. Web.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web.
Roxborough, Scott and Georg Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon," The Hollywood Reporter 28 Dec. 2016. Web.
This comment has been removed by the author.
ReplyDeleteThere is no disputing that a number of SVOD services such as Netflix, Amazon, and Hulu have been profiting and growing over the past few years. For example, Netflix, the brand leader in streaming services, launched its streaming service in 2007. Their revenue grew from $1.2 billion to $6.8 billion in only eight years (Masters). That being said, it does not mean that SVOD service business models’ are sustainable; they should be looked at on a case-to-case basis. In order to explore the sustainability of SVOD business models, we will look at the industry’s top three streaming services; Netflix, Amazon, and Hulu in order from most profitable to least profitable.
ReplyDeleteNetflix has disrupted traditional business models by creating new norms and new means to an end. What exactly does that mean? Netflix was a pioneer to instill change that would quench the thirst for instant gratification and in-home entertainment. If you can remember, Netflix actually used to ship DVDs to their subscribers’ homes. That was just a small hiccup for traditional business models when looking at the larger picture, although, Blockbuster would probably disagree. Regardless, Netflix still pushed the envelope until they started offering their streaming service I mentioned before (which started in 2007). Since ‘07, they have gained 47 million subscribers in the United States, 36 million subscribers in approximately 190 other countries, and over 30 original series (Masters). The reason? Netflix is cheaper than cable packages (traditional business model) and offers way more content to more than one screen in your house…instantly!
Amazon is the second largest SVOD service who is hot on Netflix’s tail. There is a fear that Netflix will have a “content monopoly” over a majority of the industry, but Amazon Prime has been steadily earning a loyal base of subscribers. At the close of 2016, international analysts reported that Netflix will remain the dominant force in Western Europe for SVOD services, but estimates that Amazon Video will be available in 15 Western European countries at the close of 2017. Both Netflix and Amazon would make up for about ¾ of Western Europe’s SVOD subscriptions (Dan). The only reason why I bring that up is because it is scalable to the content control that Netflix and Amazon makeup in the United States. That leaves one remaining player; Hulu.
Hulu is failing in the big picture of SVOD services. Currently, Netflix is the top consumer preference for SVOD providers. According to recent study of 1500 people 13 years an older, more than 50% of people use Netflix, around 30% of people use Amazon, and only 11% use Hulu. All three SVOD services have similar business models that reject traditional norms and conform to the new ones, so can we deem SVOD business models sustainable? No. The business that Netflix has created is sustainable, but the SVOD business model as a whole will need to constantly be improved in order to keep creating new norms the same way Netflix did and has continued to do since 2007.
Works Cited
Dan. "Netflix and Amazon Account for Nearly 2/3 of Western European SVOD
Subscriptions." Netflix and Amazon Account for Nearly 2/3 of Western European
SVOD Subscriptions. N.p., 01 Jan. 1970. Web. 30 Jan. 2017.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History." The
Hollywood Reporter. N.p., 18 Jan. 2017. Web. 30 Jan. 2017.
Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The
Hollywood Reporter. N.p., 14 Sept. 2016. Web. 30 Jan. 2017.
Sikka, Puneet. "TV Stacking Rights: Why Netflix's Loss in Hulu's Gain." Yahoo! News.
Yahoo!, 22 June 2015. Web. 30 Jan. 2017.
History shows that technology is constantly changing year-to-year, month-to-month, and even day-to-day. The continual changes that we see happening are astonishing, especially in the television industry, where many people don’t watch live television anymore. From personal experience, I always find it aggravating watching live television and having to sit through the tons of commercials during breaks. This has led people to recording their weekly shows and opting to not watch it live. This has also led to the rapid spread of SVOD services such as Netflix, Amazon, and Hulu. Nielsen reported that, “the rise in technology and TV-connected devices has given consumers, marketing agencies and advertisers a vehicle for boundless choice” (Forces of Nature: The Media Universe Moves at the Pace of Technological Change). The reason for this is that these services are easy to use and easily accessible on various devices such as iPhones, tablets, iPads, computers, etc. having endless ways to use the services. After reviewing this weeks readings and looking further into the topic, it is clear that the business models of SVOD services are extremely sustainable and will be around for a long time, even while each service is different in it’s own way.
ReplyDeleteMore and more people are using Netflix, Amazon, and Hulu as their only form of television viewing. The Hollywood Reporter recently said that Netflix, one of the services in particular, gained more subscribers last year than they ever have. “The company grew its subscriber base by 7.05 million members during the period, bringing its total membership to 93.8 million. The company also saw its largest year of growth in its history, setting a new benchmark during a year in which it expanded into 170 new territories” (Jarvey). As Netflix grows and expands all over the country, how do we know what will happen to Amazon and Hulu? Well, I did some further research and discovered that Newsweek reported Amazon Prime having more subscribers than Netflix in the United States (Levy). It’s actually interesting to see the similarities and differences between the three services, and figure out why somebody picks one over the other. Netflix and Amazon are somewhat in competition with one another as they each have their pros and cons, as well as premium options.
Newsweek reported that Hulu no longer has free streaming and is now focusing on the premium options (Levy). Everyone has a different opinion on which service to choose, but these on-demand services are taking over, “and it's likely consumer choice will only continue to expand” (Levy). As consumer choice continues to expand, this means that the SVOD services will continue to sustain and take over the television industry even further than it has already. Although we can’t predict the future, these three services are certainly heading in an upward direction. As technology continues to change and transform, there is undoubtedly a positive future for the SVOD services including Netflix, Amazon, and Hulu.
DeleteWorks Cited
"Forces of Nature: The Media Universe Moves at the Pace of Technological Change. Nielsen, 5 Jan. 2016. Web. 30 Jan. 2017.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History." The Hollywood Reporter, 18 Jan. 2017. Web. 30 Jan. 2017.
Levy, Adam. "Hulu, Amazon Still Looking Up at Netflix." Newsweek. N.p., 11 Sept. 2016. Web. 30 Jan. 2017.
I think its safe to say that SVOD services and providers are on the up and up and slowly taking the television and streaming business by storm. The ability to have such easy access to television shows and movies is the easy way of media that many people are looking for in today’s world. The London-based group IHD Markit, has been studying both Amazon and Netflix and they expect double-digit grown from both of the companies. Amazon Prime has 30.5 million subscribers today and HIS expects that number to grow to approximately 64 million by the year 2020 (Roxborough and Szalai). Rival company Netflix is expected to grow from 86 million subscribers to top 130 million by 2020 (Roxborough and Szalai). These numbers are living proof of the change we are seeing in media and how we prefer to consume our television shows and movies. You don’t see many people sitting down on the weeknights anymore to watch their show that is on once a week. The concept of binge watching is much more simple. Most people like to run on their own schedules, so when we find an hour during the day where we have some down time, we open our laptops and watch an episode of our show on Netflix, Amazon, Hulu, etc… Amazon is slowly going to catch up to Netflix simply because of the price difference. Amazon services are $2 less than Netflix and that alone can attract more subscribers. Another reason why Amazon is slowly catching Netflix is because of their production of original shows and content. Many of Netflix’s top shows are made as originals and only viewable through Netflix. HIS also estimates that Amazon will spend $337 million on original content this year, which is up from $176 million in 2015…but then you see Netflix, and they budgeted an estimated $1.2 billion for originals in 2016 (Roxborough and Szalai).
ReplyDeleteSome of the criticisms for Netflix, Amazon, and other providers is that people still do not see these companies as an alternative for their viewing, it is seen as an add-on or an extra service (Masters). From what I’ve seen at friends houses is most people still have their basic cable provider and still continue to pay for that as well as Netflix and Amazon. These companies obviously figured out a way to combat this issue by striking deals with cable providers that have Netflix and their services automatically installed on the top box and the service provide in your cable bill.
Netflix, Hulu, Amazon, and others will continue to succeed and grow, but the question will be which of these companies and services will out last the others. As the years go on, more and more options are becoming available and services are rapidly expanding and competing to gain the most users.
Works Cited:
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web.
Roxborough, Scott and Georg Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon," The Hollywood Reporter 28 Dec. 2016. Web.
Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The
Hollywood Reporter. N.p., 14 Sept. 2016. Web.
Today’s consumers of television shows and movies want to be able to view their content whenever, wherever, and in a large amounts. We all like having the ability and knowing that we can watch let’s say Arrow at 2 am off of our tablet because we are watching the latest season online. With consumers having this mentality SVOD services have been on the rise of the last few years, becoming strong competitors against traditional networks and television viewing.
ReplyDeleteOne these strong competitors is the SVOD Service Netflix, who has been creating original content as well as gaining rights to stream seasons of network shows. “Nobody really thought they’d be a competitor on the originals market,” (Masters, 2016).
However, Netflix is a strong competitor in the original market due to their succeeding efforts to create quality original content that not only viewers want, but that is also attracting big names and various awards. Although having original content is helping Netflix became a global channel they amount of money they are shelling out to produce the content could potentially have a negative effect in future on the company.
Netflix is a company that has a business model that correlates to Masters article, “Deep-pocketed buyer that is snapping up an array of material, “ (Masters, 2016). This means that Netflix is a company that is very willing to spend top dollars to produce content that will compete strongly against traditional networks and other SVOD content. For example, Netflix is estimated to spend 6 billion dollars this year for their library and original content and is known for paying millions of dollars for streaming rights. This business model however, can easily fall apart if for two major reasons, one being not a steady or yearly increase in subscriptions, as well as not having a stakeholder. With amount Netflix is shelling on content, “Could become challenging, unless they maintain the steady growth in subscription levels,” (Masters, 2016). Netflix makes a lot of their revenue from people like us, their subscribers. However, if the amount of subscriptions ever comes to lull there is a strong guarantee that Netflix while raise the prices of their monthly subscription. This will have affect on their business due to other competing SVOD services, such as Amazon.
Amazon offers VOD services through user’s Amazon prime account. Yes, Amazon prime is a lot more expensive and annually compared to Netflix a subscription, but Amazon has created a strong business model that puts them in a place to become a, “multi-channel network,” due to their, “streaming partnership program…allows Amazon prime members to create their own a la carte pay TV service by adding subscriptions,” (Roxborough & Szalai, 2016).
Additionally, Amazon is not only giving users the annual Amazon Prime option, but they started, “ Offering a new payment option for full Prime membership of $10.99 monthly, with no annual commitment,” (Spangler, 2016). This is a great business plan. I think it will help Amazon compete well with other SVOD services because they will receive a lot more customers because it is a monthly subscription that can be ended at anytime. Ultimately, I believe this addition will push Amazon further as a competitor in the market.
DeleteWorks Cited
Masters, Kim. "The Netflix Backlash: Why Hollywood Fears a Content Monopoly." The Hollywood Reporter. N.p., 14 Sept. 2016. Web. 28 Jan. 2017.
Spangler, Todd. "Amazon Launches Prime Video Standalone Option for $9 Monthly." Variety. Variety, 18 Apr. 2016. Web. 28 Jan. 2017.
Roxborough, Scott, and Geprge Szalai. "Why 2017 Will Be Crunch Year for the Global Ambitions of Netflix and Amazon." The Hollywood Reporter. N.p., 28 Dec. 2016. Web. 28 Jan. 2017.
ReplyDeleteStreaming Video on Demand(SVOD) services are becoming more popular then ever. Today’s consumers are becoming accustom to the ability to have the content they want at the click of a button. The idea of appointment television has become a way of the past in many cases. However, people still tune in for sporting events and special awards shows. Though to watch these programs they may not be tuning on a traditional television but using the streaming organizations website.
Over the past years SVOD services have grown at exceptional rates. Netflix, was the first of the popular services originally offering DVD rentals that did away with traditional rental stores and then moved into online streaming of series before getting involved in creating their own content. They are starting to expand quickly and internationally by adding more multli- language options. This past year their fourth quarter grew more and took them to a total of “93.8”(Jarvey) subscribers. Netflix is growing at an exceptional rate and it is unclear to some if they can keep going at the rate they are or if a competitor such as Hulu or Amazon will step in. However, CEO Reed Hastings commented on the concern and stated, “The big picture is remarkably steady” (Javey). However, competitors are coming in and adding to the competition.
Technology is ever changing and growing at faster and faster rates every day. The increase we see technology has also created an increase in impatience. Consumers want their media wherever they are within the click of a button. This has helped to create space for many things, especially SVOD services like Netflix, Amazon and Hulu. “the rise in technology and TV-connected devices has given consumers, marketing agencies and advertisers a vehicle for boundless choice,” (neilson.com). These SVOD services were established during a time of increased technology change and have learned to adapt to it. As these businesses continue to move with the ever changing technology and the desires of consumers, they show promising sustainability.
ReplyDeleteThe instant streaming and little to no commercials that SVOD services provide have cause many people to ‘pull the plug’ and go cable-free. Having instant access to your favorite TV shows is much more appealing than having to wait week to week. According to The Hollywood Reporter, Netflix obtained more subscribers during the fourth quarter of 2016 than any other quarter in their history of being a streaming service. “The company grew its subscriber base by 7.05 million members during the period, bringing its total membership to 93.8 million,” (Jarvey, hollywoodreporter.com). Netflix also expanded their services into 170 new territories. Millions of people are turning to Netflix because of their mix of cable/network shows and original content, “spending $6 billion a year on programming and scored 54 Emmy nominations this year,” (Masters, hollywoodreporter.com).
Amazon, though slightly behind Netflix, has increased subscribers and done very well with its original content. Like Netflix, Amazon Prime has continued to stay on top of technology and the wants of consumers. They have made deals with HBO and Showtime that have allowed Amazon to stream their originals to subscribers. Hulu, though the bottom of the three, has made the proper business choices to create a substantial amount of followers. Hulu gives its subscribers the ability to catch a new show the day after it airs. They do a good job of giving today’s impatient consumers the product as soon as possible.
I think that the main reason these SVOD services will be sustainable, is their ability to work with the ever-changing technological climate. They work with traditional TV media to deliver the desired content and have put substantial amounts of money (namely Netflix) into programming and original content. There will always be a want for this type of television.
Jarvey, Natalie. "Netflix Reports Its Strongest Subscriber Growth in History," The Hollywood Reporter 18 Jan. 2017. Web.
Masters, Kim. "The Netflix Backlash – Why Hollywood Fears a Content Monopoly," The Hollywood Reporter 14 Sept. 2016. Web.
"Forces of Nature: The Media Universe Moves at the Pace of Technological Change." Nielsen.com. Accessed 10 Jan. 2016. Web.
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