The entertainment industry: subscription video on-demand platforms

Treball Final de Grau en Administració d'Empreses. Codi: AE1049. Curs 2019/2020This study is going to focus on analyzing the blossoming industry of streaming video ondemand platforms in the United States. These video on-demand platforms such as Netflix or Hulu have transformed the entertainment industry, influencing the production and consumption of films and television. This study aims to look into how these platforms have reshaped the entertainment industry, analyzing the recent history in film and television, and then investigating how the skyrocketing trajectory of these streaming platforms has collided into it. It is becoming less common to watch television and movies through traditional platforms (i.e., TV set through a television connection and movie theaters). According to the Nielsen ratings report for 2018-19, the traditional TV broadcast networks in the United States averaged 28.5 million viewers in prime time, a decline of 20% compared to the previous ratings report in 2014-15. However, there is a clear generational divide regarding TV watching habits. As stated by Omnicom Media Group 47% of adults in the United States between the ages of 22 to 45 do not watch any TV via traditional platforms. In regard to the movie theater attendance in North America, we can see a severe decline in per capita movie theater attendance of 28% from 2002 until 2018 (U.S. Census Bureau & Statistics Canada). Additionally, the ticket sales number is also steadily declining since 2002 until the present moment. The aforementioned drops in television ratings and movie theater attendance have been linked to the rising popularity of subscription video ondemand platforms. It is estimated that 74% of consumers in the United States have been taking advantage of a subscription video on-demand service in 2019 (Leichtman Research Group, 2019a). This means that there has been an increase of more than 20% of video on-demand subscriptions in four years. This data is corroborated by an estimated subscription video on-demand industry revenue of 22.22 billion U.S. dollars (Watson, 2018). Given this outstanding data, this study will highlight the importance of researching this industry’s characteristics and the impact that it has generated in the whole entertainment industry. This study will analyze the major players in the subscription video on-demand industry; companies like Netflix, Hulu, HBO, Amazon Video and Disney +. This investigation will broaden the knowledge in these companies’ insights, strategies and innovations, as well as draw a comparison between these leading companies to be able to understand the intense competition within this booming industry. To achieve this purpose there will be a bibliographic and documentary examination of the contents and news that address the topic, as well as research into articles in specialized databases. This research tackles the following questions: What is the impact of the subscription video on-demand platforms model that has emerged in the film and television industry? Which strategies have been followed by Netflix, Hulu, HBO Go, Amazon Prime Video and Disney +? What actions can traditional entertainment take in order to stay relevant and compete with video on-demand platforms? How are subscription video on-demand platforms competing with each other? What is the future of subscription video on-demand platforms