Understand what are the causes and effects of the increased use of “Video on Demand”:
- Internet Access and Audience
- USA Crisis and Cable TV Fee
- Netflix VOD Operation and Content Negotiation
- Cable TV own VOD products and Market competition
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Video on Demand - Cause and Effects
1. M A R C E L A K L E I N
S E P T E M B E R / 2 0 1 3
What are the causes and effects of
the increased use of
“Video on Demand”?
2. Agenda
Video on Demand: Introduction and definition
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
Summary
Discussion
Conclusion and Recommendation
Reference List
3. Agenda
Video on Demand: Introduction and definition
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
Summary
Discussion
Conclusion and Recommendation
Reference List
4. 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
5. 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
6. Agenda
Video on Demand: Introduction and definition
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
Summary
Discussion
Conclusion and Recommendation
Reference List
7. 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
8. 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
9. 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
10. 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
11. Internet Access and Video Audience
Share of Television
Viewing by Device
(18-44 years old)
348 responses
The Multiscreen Marketer, page 15, online
12. 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
13. 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
14. 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)
15. 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.
16. 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
17. Netflix VOD Operation and Content
Negotiation
Netflix background:
Reed Hastings
had to pay $40
in fines due date
returning of the
movie Apollo 13
1998: Founded
NETFLIX.
His clients would
choose the title
online, order the
DVD, receive it at
home, and return by
mail
1999: monthly
subscription.
No due
dates, late
fees, or shipping
and handling -
2007: one
billion
DVDs
delivered
18. Netflix VOD Operation and Content
Negotiation
Now: + than 37 millions subscribers*
Do not disclose the number of titles in its catalog
Was never able to negotiate movie releases with the
content provider
New releases are sold as „gold‟ and they are exhibited
in the premium hour
Netflix subscribers = US$ 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
19. 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)
20. 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
21. 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
22. 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)
23. 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.
24. Agenda
Video on Demand: Introduction and definition
Cause 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
Summary
Discussion
Conclusion and Recommendation
Reference List
25. 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
26. Agenda
Video on Demand: Introduction and definition
Cause 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
Summary
Discussion
Conclusion and Recommendation
Reference List
27. 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?
28. Agenda
Video on Demand: Introduction and definition
Cause 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
Summary
Discussion
Conclusion and Recommendation
Reference List
29. 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
30. 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
31. 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…
32. Agenda
Video on Demand: Introduction and definition
Cause 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
Summary
Discussion
Conclusion and Recommendation
Reference List
33. 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