In 1987, the beloved movie critic Roger Ebert made the prediction, "We will have high-definition, widescreen television sets and a push-button dialing system to order the movie you want at the time you want it." He compared the accessibility of movies akin to a book, that the revolution of delivery and distribution anyone in any town can see what they choose (Novak, 2011). In 1987, the ability to rent a movie on VHS tape at a brick-and-mortar storefront, such as Blockbuster Video, was in its infancy. It was not until 1997 that Netflix debuted, enabling mail delivery of videos to homes ordered via a web portal. Finally, in 2007, Netflix offered the first web streaming media service (McFadden, 2020). Today, over 200 streaming services exist for consumers to choose from (Cook, 2021).
Multiple factors contribute to how consumers purchase the commercial video (movies, mini-series, television) today. Factors such as resolution, screen display, and commercial-free are examples of industrial and technological forces that enable video distribution. Since modern television's birth, the technology has continuously evolved, redefining itself to an exponentially more significant set of offerings. In the infancy of television, growth followed a linear progression, however over the past several decades, the opportunities for both viewing and creating content have skyrocketed (Sharma, 2016).
The advent of streaming services to televisions in consumers’ homes has disrupted the technology's technological advances. The advancements in the display (widescreen), surround sound, high-definition video are examples of technological forces. However, the industrial forces have not been as constant but instead experiencing a more significant growth curve. The increase in cable channels, web-based delivery, and content options have driven significant impact. An example is a premium cable service; while initially an alternative for narrative storytelling, the subscription-based model quickly led to broadcasting without advertisement interruptions (Sharma, 2016).
Blockbuster video was the market leader in video distribution in
the late 1990s, with over 6,500 store locations worldwide with a market share
of 27%. The competitors in the marketplace were highly fragmented. What was
Netflix able to do in such a short period to completely change the entire
market? The answer is scenario planning.
Netflix focused on the future of video consumers, while Blockbuster focused on the
present time's activity. For example, Blockbuster charged late fees for videos
not returned on time, which was a significant revenue source. Netflix identified
this as a pain-point with consumers and chose not to implement them (Ciccone, 2017).
After realizing the high volume of video rentals in the consumer
marketplace, Netflix offered a subscription plan with mail delivery and
pre-paid return envelopes. Blockbuster was offered a partnership with Amazon,
the leader in retail sales of videos at the time, but refused the partnership. In
the same year, Netflix developed a personalized recommendation system that
compared customer's purchasing patterns with other customers with similar
profiles. In 2007, Netflix released a full-blown streaming service, and in 2011
pivoted their business model from providing videos to producing them. The first
Netflix original series, House of Cards, won three primetime Emmy awards.
Today, Netflix dominates the video streaming market and the television market,
with more award-winning series than any other competitor. Blockbuster’s
inability to plan for the future ended the corporation as all stores were permanently
closed in 2013. While the company still has a small presence in the on-demand
streaming market, it is an addition to Sling TV and no longer the corporate
giant it once was (Ciccone, 2017).
References
Ciccone, E. (2017). Platform ecosystem: an analysis of the business model evolution through Blockbuster and Netflix case studies. http://tesi.luiss.it/20805/1/674101_CICCONE_ELISA.pdf
Cook, S. (2021). The Complete List of Streaming Services in 2021 – 200+ Services. Flixed. https://flixed.io/complete-list-streaming-services-2021/
McFadden, C. (2020). The Fascinating Hitory of Netflix. Interesting Engineering. https://interestingengineering.com/the-fascinating-history-of-netflix#:~:text=Netflix%20was%20first%20founded%20in%20August%20of%201997,opened%2C%20Netflix%20was%20purely%20a%20movie%20rental%20service
Novak, M. (2011). Ebert's Art Film Revolution (1987). Gizmodo. https://paleofuture.gizmodo.com/eberts-art-film-revolution-1987-512626033
Sharma,
R. A. (2016). The Netflix effect: Impacts of the streaming model on television
storytelling. https://pdfs.semanticscholar.org/f110/c0aaf64c08995ee31b70b975d15bb5aefdff.pdf
No comments:
Post a Comment