Saturday, December 1, 2012

Heated competition in the video content business

Regarding the video contents business, there are heated battle going on between Hulu, Netflix, Amazon, and other broadcasting and digital content distribution companies. This industry is growing so fast that traditional television is under the threat. Although driven largely by YouTube, according to comScore, people who view online video on a daily basis has grown by 43% to over 100 million viewers compared to 2011. So, what are the key success factors that will allow these companies to come out as victors? First, it is exclusive deals with content provider/creators. Hulu recently stroke a deal with CBS on rights to stream their shows. Disney and ABC have deals with iTunes, but Amazon has rights to distribute NBC shows along with Hulu. It is critical for these companies to provide wide breadth of contents in order to lock in the viewers and transform them as loyal customers. Second, as these companies are distributor of contents, they are seeking to collaborate with device manufacturers to embed their services to TVs, laptops, mobiles, and even console game players, such as xBox and Playstation. Recognizing the growth of these players and foreseeing customers behavior in purchasing decision based on embedded services, device manufacturers are also keen to partner with these players. Apple and Amazon have a good start in this aspect. Apple, with its Apple TV, laptops, and iPhones, it is providing great compatibility between its devices, contributing to locking in customers. Amazon, with its high presence in online book market and its Kindle, it has advantage over Hulu and Netflix.      
As these online video distributors aggregate various digital contents and provide one-stop shop for the viewers, it will be interesting to see how far they go in terms of crossing the lines of content creator and start developing and providing their own contents.

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