Consumer entertainment is in the middle of two radical transitions -- the shift from analog to digital, and the shift from physical media to Internet distribution. The shift to digital is nearly complete, but the shift to Internet distribution is still far from over. The first content to make both transitions was music. Though there is still substantial physical distribution of music on CD's, Internet distribution through services such as Apple iTunes is rapidly eclipsing CD sales. Video is now largely digital, but has been slower to make the transition to Internet distribution. There are technical reasons, such as multi-gigabyte file sizes, and multi-hour download times, that contributed to initial delays, but with today's broadband services, and ever cheaper high-capacity hard drives, the real hold-up is now business models. To date, Internet video distribution has followed three basic models: ala-carte pricing in which a fee is charged to rent or buy a show, advertising-funded in which the viewer "pays" for what they watch by watching ads inserted in the program stream, and subscription pricing in which a periodic fee is paid to access a library of content. This paper examines all three, and draws conclusions about which of the three will win in the end.
Ala-carte pricing was the first business model used for Internet distribution of video content, and still dominates today. In this model, consumers pay a fee for each title they download. The fee can be a few dollars for a show they "rent" and only have access to for a limited time, or ten dollars or more for a show they "own" and can watch indefinitely. The studios and content owners like this model because it's a familiar extension of the pay-per-view, video-on-demand, DVD sales and rental models they've profited from for years. Unfortunately, consumers don't like this model very much, and that's clear from the relatively low-take rates for all of these forms of electronic distribution. I believe there are two reasons this is true. First, none of these models provides the "bang-for-the-buck" that a DVD purchase does. When a consumer purchases a DVD, they instantaneously get a show they can play in their living room, bedroom, car, PC or portable DVD player. It's portable, compatible, and it often comes with cool menus and extras. So far, most digital downloads offer only a fraction of this.
Perhaps the optimal solution for Napster’s dilemma is the possibility of a cable TV type payment. Users pay a certain monthly fee for all the downloaded music they wanted. They could chat with their favorite artists, get first claim on concert tickets, and browse possible downloads by genre. The new system would pay the artists their royalties and sell millions of older titles that at present are sitting in vaults because no stores will give them shelf space. This option has the advantages of cooperation between the music industry and Napster. Napster users will have the same type of service as they do now, with extras so they won’t have to turn to no-fee options (Gnutella and Freenet). Music companies will be able to use the Internet for sales of all their merchandise. If music companies can package a better experience people will pay for it. In a recent survey of college students more than two thirds of the respondents would be willing to pay for a $20 dollar monthly fee of a similar service. The only foreseeable disadvantage of this solution is the plausibility of the record companies cooperating in such an effort.
Since 1999 the growth of spending on DVD purchases and rentals has been incredible. According to Alexander & Associates, “Rapidly growing consumer activity and spending has built this industry into a major market phenomenon. The DVD format for enjoying pre-recorded entertainment at home is extraordinarily popular and consumers are changing their behavior to accommodate it.”
Netflix first grabbed the attention of many customers when, unlike the local video rental store, they eliminated due dates and late fees charged by traditional video rental stores. The Netflix model allows customers to pay a monthly subscription fee for which they receive as many movies as they want in a month. The subscribers order DVD’s via the firms website and delivered through the United States Postal Service. Subscribers keep the movie as long as they want and when finished return it to Netflix in a postage paid envelop.
As advance technology of fiber-optic developed and is on the rise, everyday there is another story about entertaining movies on demand and streaming online is with ease. Those developments which let movie’s viewers sit in the comfort of their home or anywhere with access to the internet can stream instance movies with a push of a bottom. They no longer need to make a trip to the movie’s stores for movies rental and return, so that is why movie shops fail and filed for bankruptcy bring a symbolic close to the “let’s go rent a movie” era. Blockbuster LLC, formerly Blockbuster Entertainment Inc., both owned and franchised American-based giant provider of home movie and video game rental services through video rental stores, later adding movies by mail, streaming online and video on demand. Due to the peak of fiber-optic and competition from companies such as Netflix, Redbox, and GameFly, Blockbuster became the victim of digital media and filed for bankruptcy on September 23, 2010 due to significant lost in revenue.[3]
An “analyst” was quoted in the case (in 2002) as saying that “people will pay for music on the Internet, eventually.” This person was skeptical of the willingness of consumers to pay for
§ Emerging competition from digital cable and satellite companies that offer movies on demand. Time Warner digital cable offers video on demand library consisting of a few hundred selections and growing. Users can purchase a movie with the touch of a button for about $4.00. Customers have access to the movie for up to 24hours. Many video on demand services are now offering technologies that allow users to pause, fast forward and rewind the movies they purchase. Though the selection offered by cable companies is extremely small in comparison to Netflix, it will only be a matter of time before the number of selections will increase drastically.
Home Box Office service began to use satellite in 1974 and was profitable by 1975, by 2014 “subscription revenue up 4 percent, to $4.9 billion. Operating income jumped 8 percent in the last year, to $1.68 billion. Netflix, meanwhile, had just under $4.4 billion in revenue, with $228 million in operating income last year” (Bachman, 2014).
2.What should peer-to-peer (P2P) networks do to grow their business? P2P providers should look for new ways to legalize file-sharing. P2P companies should convince the music industry by presenting feasible solutions that economically can benefit the music industry, like charging users fees to access files. Placing a system to assist file-sharing users to open retail accounts, whereas retailers allow other P2P fans to download songs for small fees, then a percentage of this money is handed in to copyright owners. Applying a filtering system to prevent sharing the music that is a subject to copyright law. Offering the music labels flat fees to get music licences.
Disney’s Miramax films decided to make twelve movies which people will be able to see on pay-per-view downloads through SightSound.com. Miramax is the first major studio to show full-length movies on-line. They have decided to show twelve movies but they feel this could catch on and have potential to expand. Miramax feels the time is right, they are trying to get ahead of other film companies. Miramax feels that showing movies on the Internet will bring in new audiences. The big concern with web movies is piracy Hower Antipiracy technology is becoming much more reliable. SighSound.com will use Microsoft’s digital rights-management system with encryption technology. Users will be able to download the Miramax titles; the user can view them for 24 hours before they disappear from the hard drive. Miramax has not yet come up with a price for the movies. The movies have not yet been decided either but most likely there will be movies out on home video.
A movie theater has its advantages and disadvantages. One advantage is that people can see the showing of different movies that have been newly released. The disadvantage is that, that is all there is to it and nothing more. At home, you can control the variety and ways to watch a movie. People buy many movies to watch at home and it can be anything at any time even at any place. The only bad thing about it is that they cannot see any of the newest released movies that recently came out in theaters. There are two types of ways people watch movies at their homes. One way is people already own DVDs or have bought many of them and start watching them in their DVD players. The other ways are streaming a movie through the internet. For this to happen, people would mainly buy the monthly subscriptions such as Netflix, Hulu, or Amazon Prime. Through this subscription people do not only watch movies in their homes but they also watch television shows. The only downside is there is a very limited number of movies added onto these
In today’s technology boom, the new waves of doing business have transformed the way people shop and live. The same happened the way people access personal entertainment. With Internet, people can stream movie online without have to go theater, or the rental movie box.
There is strong competition with other companies that offer video streaming at no extra charge. Additionally, Netflix and its competitors are attempting to enter the digital world. Digitally offering television shows is an area of competition that has previously been controlled by
The Industry gets its revenue from selling this content whether it’s online or in stores, this funds new projects and allow for better products in the future. The public should be aware of this, downloading the content for free, and not buying it will decrease revenue for the companies stopping them from undertaking future projects.
The music industry started in the mid 18th century with Wolfgang Amadeus Mozart. Through the decades there has been a great increase in this industry; however, the revenues for this industry have declined by half in the last 10 years. This has been caused by music piracy, which “is the copying and distributing of copies of a piece of music for which the composer, recording artist, or copyright-holding record company did not give consent” . After 1980’s, when the Internet was released to public, people started to develop programs and websites in which they could share music, videos, and information with...
This paper includes the process of online business; how to sell a product, advertising, various ways to create awareness and how to become a reseller. Laws and conditions for an online business.