The Impact Of Digital Technologies On The Paid Content Market: Examining the Netflix Paradigm
The arrival of digital distributors such as Hulu, Netflix and iTunes to the digital media landscape has brought about substantial changes to the television and movie industry. While the observed growth of the new streaming models is definitely encouraging, the question remains as to whether the new media companies will be able to deliver a significant return on investment.This technical note attempts to summarize the advances of the television and movie distribution market that were motivated by the emergence of platforms like Netflix and Amazon Instant Video. The note identifies the major companies dealing in online paid content and analyzes the consumer shift from traditional media to digital consumption. This note also examines the demand for streaming and VOD services, focusing specially on the rise of Netflix.The presented conclusions are the results of a four-year project studying the impact of emerging platforms and the development of a digital consumer segment willing to pay for streaming content. It provides a better understanding of the digital distribution scenario, taking into account an economic and a legal perspective, as well as audience measurement and impact on the media landscape. It includes quantitative measurements of the TV and film markets, descriptions of the streaming video industry, and interviews with several industry leaders and several U.S. scholars. Finally, the note suggests strategies for the industry in terms of economic viability, marketing and consumer policies.