Internet Streaming and its Impact on the TV Industry

The emergency of new technologies has brought a change in the media industry. The digital media has brought a change that is affecting the entertainment industry. In the past, the Television network was the leading entertainment channel with almost 90% of people across the world using this platform. This has changed today as new services have been introduced in the market that are more affordable and offer a flexible way of watching any channel that you want. They offer specific options that are able to meet all the consumer desires and needs. Majority of the citizens are considering using these services as a source of entertainment, an act that has led to a drop in the viewership of the Television network.

Internet streaming is leading today in the entertainment industry. Among the most common and known companies are Netflix, Hulu and Amazon Prime that are offering lower prices for one to watch any type of film that they want. These internet streaming services has changed the manner in which people view TV while at the same time it affects the economy of the cable TV which is doing poorly in terms of viewership. The main point that is driven here is that Internet streaming has changed the ways in which the entertainment industry works.

A drastic change has been experienced in the number of TV viewers ever since the introduction of streaming services such as Netflix. Internet streaming has given the people especially the youths a chance to watch films on their own pace, at any time they feel like and on which ever platform they feel is more affordable in terms of cost of viewership. With this change experienced by Television network, it will be important to determine how some of the big networks like NBC and CBS adapt to this change and their future plans as the internet streaming platform continues to dominate the entertainment industry. It is also important to consider the factors that have led to the drop in the TV ratings over the years. The most important aspect of this issue is the economic impact that the shifts from the cable TV to internet streaming have, taking into consideration the future of the TV industry.

The introduction of internet streaming has made it easy for people to watch movies across the world especially those who have access to the internet. Today, anyone can watch or download video from their homes or the comfort of their office. Various internet streaming websites decided to take advantage of the fact that several people have access to internet and are using this platform to watch various films. Companies such as Netflix and Hulu have transformed the consumption methods within the entertainment industry. These online companies offer small charges for live streaming or downloading of various video contents.

When compared to the cable network, majority of the viewers has stated “the internet streaming is more reliable and cheaper compared to cable network thus the reason for their shift in the mode of entertainment.” According to a number of audiences that were interviewed regarding internet streaming, majority replied that “it was all about mobility and immediacy; we want content which is just a click away that will meet our needs without limiting us to be in specific place in order to be entertained.” Some claimed that the internet streaming has enabled them to catch up with their favorite programs while they are travelling or when at home and everyone wants to watch the television they can get a chance to see what they want without fighting over the remote.

However, as the internet streaming network is becoming more popular across the world, the cable TV is deteriorating in terms of viewership, something that would affect the cable industry. For instance, according to a report released by New York Times magazine, by the end of last year, the cable TV industry had lost about 2.2 million customers to internet streaming. The report stated that the consumers of cable TV were “cutting the cord” at the same time stopping to subscribe for their services.

According to a report released by the Experian Marketing Services, those individuals in the world who has high-speed internet stopped subscribing to satellite TV. The number of those who cut the cord rose to 5.1 million by the year 2013 with more than 7.6 million homes not watching the cable TV. The report showed that in the near future, majority of adults across the world would not spend their time watching the cable Television and instead will prefer online streaming method.

Untitled4

There are those analysts who however believe that with time, internet streaming will go down and companies such as Netflix will decline in regards to ratings. Ted Sarandos, who is the Chief Content Officer at Netflix, was quick to brush off this claim stating that “we have witnessed the company and the internet streaming network viewership increase in ratings with majority of the entertainment fans preferring to watch films and news on their tablets; we are hoping that the online streaming industry will continue to grow as the world continue to become computerized.”

Nevertheless, regardless of the difference in views on whether the cable TV will be totally overtaken by the internet streaming or not, the fact is that with time, people will get bored of subscribing to particular streaming services. This may lead to a decrease in viewership in various online streaming networks, but the truth is that the industry will continue to exist and be used by those who prefer flexibility when it comes to entertainment. It means that online entertainment industries such as Hulu and Netflix will continue to function in future. The demand for these online streaming networks might go down, but just like the cable TV, they will continue to exist.

The shift to online industry has greatly affected the economy of selling and producing TV shows. However, in order to protect the cable industry, the broadcasters and the producers are guarding the financial details so that their online streaming competitors cannot acquire the information. The Canaccord Genuity Group Corporation stated that “despite the huge competition coming from the internet streaming industry, the cable TV will continue to survive in the entertainment industry through provision of grants and loans to maintain the industry.”

The CEO of the Netflix Company agreed with this fact stating that “the cable company still has power and more advantage over the online streaming because of the strong relationship that the industry had built with the studios and video producers of the network television programs which are aired online.” This relationship will enable the cable TV company to demand for a right to own some programs, something that will force the viewers to watch television in order to catch up with their favorite programs.

However, while it seems that the viewers have seized control and power on how and when to watch TV, they should be aware that the cable network is getting curved up to meet the economic demands from the distributors. This will make accessing various shows online complicated and next to impossible. The viewers will be left with no choice but to pay more for multiple services, something that most of them will not be ready or willing to do. While the cable TV will be looking for people to fund their services, they will tend to be strict. Several analysts have suggested that this move could create a network snowball that would in the long run affect the viewers.

Untitled3

It is true that a stiff competition has been set between the cable TV and online streaming industries such as Hulu, Netflix, HBO, and Amazon among many others. The competition is contributed by various economic forces that are active in the current situation. For instance, the value of the dollar has affected the cable TV which today is charged highly. In developing nations, in order for a person to comfortably watch their cable television, they have to pay for it monthly. Majority of the people consider the cost of paying the cable TV plus the programs being aired on the channels and weighs it against downloading movies through various online networks and watching them at any time or at their homes or in the bus while travelling. After this careful evaluation, most people tend to prefer the internet streaming because it is cheap and affordable.

Majority of the online streaming websites charge less than 10 dollars to download movies for a specific period of time. On the other hand, the cable TV charges are always fixed and in some nations where the rate of the dollar is high against the nation’s currency, the charges on watching television also increases. This has made several people to shy away from the cable television thus the reason for the lower ratings in watching the cable television.

The other factor that has changed the pricing in the entertainment industry is the oil prices across various regions in the world. Today, the prices of oil are low, but the citizens pay for the low costs indirectly. Economic analysts believe that it is the major cause of rise in particular products in the nation such as the price of watching cable television. It means that the price of oil change has the power to change the game for an industry or a region.

However, in order for the government to keep the economy of a nation rising, they may consider shrinking city budget which may not only hurt businesses, but also families at large. The family and the business will have less money to spend thus continued to deteriorate in performance especially for the businesses. The federal government can consider recovering the dollar by increasing the taxes; something that economic analysts believe will have no impact on the cuts.

Sources:

http://www.wsj.com/articles/pay-tvs-new-worry-shaving-the-cord-1412899121

http://www.experian.com/blogs/marketing-forward/2015/03/06/one-million-households-became-cord-cutters-last-year/

 

 

 

Leave a Reply