In his book “Over the top: how the internet is slowly but surely changing the television industry, published in 2015, Alan Wolk takes a look at the television industry and examines the changes which the industry has already undergone and will undergo in the future because of the internet.
One major question of Wolk’s book are the current trends in watching television are. The most significant trend is the rise of streaming services and video on demand This development is important for media economics since this success endangers the existing revenue models and leads to a disruption of the dual market system. Timeshifting is one significant trend. With the help of Netflix and co, viewers became accustomed to watching TV on their own schedule.
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A particularly important issue with regards to media economics is the shifting value of the ownership. This affects the whole media industry, not only television. Since ownership of media goods was a very important source of profit in the past, the disappearance of consumers wanting to own media products is a very relevant change for the industry. Wolk explains the shift by stating that the basis of the idea of ownership is the concept of scarcity. In the past, media was always scarce and owning media was the only way to ensure consistent access. These days, however, TV and movies as well as music are available everywhere. Among others, this is due to the popularity of streaming services like Netflix or Spotify. Rather than buying DVDs and CDs, consumers started to pay a monthly subscription fee to gain access to a close-to-unlimited library of movies, TV shows or music. According to Wolk, the idea that there will always be a way to access any type of content on any device and at any time, means that consumers value convenience over quality. For the television and the media industry as a whole this means that future systems and businesses should be based on this …show more content…
Thus, the advertisements will be based on the individual taste and interest of the consumers. While the trend already goes to fewer and better targeted commercials, many advertisers still prefer broad-based targeting that encourages brand awareness, individual accounts make it easier for them to know the needs of consumers. One thing that should not be forgotten by the advertising economy, is that by getting used to enjoying ad-free streaming services, it is going to be increasingly harder for the younger generation to go back to a model that relies on commercial blocks with a length of four or five minutes. Hence, the model the networks already partly used with fewer and shorter blocks will be a chance. Especially if the ads get more relevant for the consumers due to
The first excuse is economics. The business of TV is ruled by a simple declaration: Get the audience the advertisers want. The consequence is that major networks forgo the mass ...
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.
Last October, one of the largest multiple system operators (MSO), Time Warner, was purchased by the telecommunication company AT&T for $85.4 billion. Michael Merced, a contributor of The New York Times, writes about the continuing consolidation of media and its potential effects. In Merced’s article “AT&T Agrees to Buy Time Warner for $85.4 Billion,” he explains that this deal creates “a new colossus capable of both producing content and distributing it to millions with wireless phones, broadband subscriptions and satellite TV connections” (Merced, 2016, par. 3). This statement indicates to me that both companies are thinking toward the future. Both companies are trying to best prepare themselves for the continued erosion of the television audience due to the allure of the internet.
Americans watching more tv than ever; web and mobile video up too. (2009, May 20). Retrieved
27 Jan. 2012. Greenblatt, Alan. “Television's Future.” CQ Researcher, Vol. 17 (2007, February 16): 145-168.
The Digital Video Recorder used in modern entertainment systems can now be replaced with an easy to use streaming video devices. As the online video libraries grow to include more content, eventually streaming set top boxes will provide this functionality, without the need to schedule recordings or manage space used by previous recordings. One additional advantage, often referred to as TV Anywhere, allows viewing of online content from a variety of devices, as long as an Internet connection is available. Now the real motivation that drives many Americans to consider these alternative options is money.
The outlook for Netflix has developed a trend of continuous growth with subscribers and providing products with a substantial cost advantage by distributing a wide variety of titles that appeal to different customer groups (Anthony, 2005). The success of Netflix was simply listening to consumer’s feedback regard...
Roscoe, J 2010, ‘Multi-Platform Event Television: Reconceptualizing our Relationship with Television’, The Communication Review, vol. 7, issue. 4, pp. 363-369.
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
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.
Video Rental and Streaming has partly been of the most significant avenues of the general home entertainment industry in the United States for many years. It promotes constructive development through various channels such as Information Technology, Public Multimedia and it also has a huge impact on people’s lives and their entertainment on demand. One of the best companies which provide this high-advanced service is Netflix, Inc (Netflix). It was incorporated on August 29th in 1997 in California by Reed Hastings & Marc Randolph; listed on NASDAQ as NFLX in 2002. Netflix is the world’s largest Internet subscription service streaming television shows and movies with over 40 million members in 40 countries (Netflix, 2013).
There are many contradictory arguments about cross-media ownership. Some people said it is an effective way to manage media company. Also, some people argue that a media company can offer high quality information and product since they have broad network and huge capital. This information and product cannot be made with small capital. However, there are concerns that media concentration affects our society negatively.
Advertising can mean many different things in today’s world. When advertising first was developed it was done by would of mouth and the classic flyer or poster, which is the traditional media. Then it moved up to using broadcast media such as radio to help capture a bigger audience. After that it moved towards the television where an even bigger audience could be reached. Lastly companies started to realize the shear amount of traffic that was generated by the Internet.
Advertising in the digital era has evolved and is continually adapting to the changes. Just like the print industry, music industry, television industry, they all have to conform to the digital era. Ad agencies that continue to use the Internet as one of its main sources will see continual growth due to the rises in users. Internet continues to fuel ads via websites, videos, applications, etc. Social media also will continue to help ad agencies grow with them establishing relationships with communities who fit the ads they are showing. Mobile technology will continue to grow and more people will gain access to smartphones. Ads on mobile will boost the business for ads and awareness of the ads. Advertising is a large business and will change more as the years continue.
In the following text I am going to answer this questions focusing on television and movies in the near future.