Yo, what it is! You know what it is, it’s your man Kingmusa— and welcome to The Study Guide! I'm here to break down today's class notes and help us learn together. Today we are going over New Streaming Services and we will be focusing on Module 6: New Streaming Services" Let's dive into our module on New Streaming Services. We're exploring the world of OTT, how it's changing media consumption, and what it means for advertising.
Key Concept of the Day:
Today, we're focusing on understanding what Over-The-Top (OTT) media is, its impact on traditional TV, and how advertisers are using it to reach audiences. We'll also touch on the pros and cons of streaming services for consumers. This week’s module introduces new streaming services and their impact on media consumption. We’ll explore Over-The-Top (OTT) media, the shift from traditional media to OTT, and strategic advertising on streaming platforms like Netflix and Hulu. OTT advertising, like regular ads, reaches a large audience and targets specific groups. Cross-channel campaigns enable content access on various devices. View-through attribution (VTA) and click-through rate (CTR) measure effectiveness. OTT advertising delivers content over the internet, offering greater freedom and personalization in entertainment access.
Streaming services involve content providers, distribution networks, and device manufacturers, with video, intellectual property rights, revenue, and data flowing through these systems. Determining their media or tech status is challenging due to reliance on other companies and technology. This research aims to understand streaming services’ processes and activities, using Netflix as a case study. Netflix, a media and tech company, impacts content delivery and user satisfaction, revealing preferences and changing TV viewing habits. There’s a debate about whether companies like Netflix, which use technology for content delivery, should be considered media or tech companies, affecting regulation and taxation. This paper explores Netflix’s complex technology and its potential impact on the media industry. Streaming video services grew rapidly in Europe and the US due to exclusive content and user-friendly interfaces. Streaming services have become a dominant force in media consumption, and understanding how they work, how they're changing the industry, and how they're used for advertising is essential in today's digital age.
Here are the main points:
- OTT refers to content delivered over the internet, bypassing traditional cable or satellite TV.
- OTT offers users flexibility, personalized experiences, and a wide variety of content.
- The shift to OTT has led to "cord-cutting" and new opportunities for advertisers.
- OTT advertising allows for targeted campaigns based on viewer data.
- The streaming industry is continuously growing, with more streaming services available every year
OTT, short for over-the-internet content, delivers media without cable or satellite TV. Streaming services like Netflix and Hulu, music platforms like Spotify, and messaging apps like WhatsApp are examples of OTT. The rise of OTT has led to cord-cutting, as people opt for streaming over traditional TV. Netflix, a streaming service, offers movies and TV shows anytime, anywhere. As of April 2018, it had over 125 million subscribers in 190 countries and plans to spend $8 billion on content in 2018, including 700 original shows. Netflix’s success lies in connecting people and providing entertainment, driving its rapid growth. To ensure a great experience, Netflix prioritizes ease of use, compatibility across devices, and personalized recommendations. They invest heavily in content acquisition, marketing, and technology to streamline operations. Data analytics plays a crucial role, analyzing viewing habits to deliver tailored recommendations. Netflix’s streaming service comprises five key components: content acquisition, encoding, delivery, display, and data analysis. They collaborate with studios to create original content and utilize viewing habits for better recommendations. Transcoding ensures smooth video playback on various devices and internet speeds, utilizing Amazon’s AWS cloud computing service.
Data analytics employs machine learning, algorithms, and human intelligence to analyze viewing habits and provide personalized recommendations. This approach sets Netflix apart and contributes to its profitability. Content Delivery Networks (CDNs) deliver videos globally, ensuring quick and smooth delivery. Netflix’s CDN utilizes significant computing power and energy to maintain high video quality and speed. You access content through broadband internet, typically managed by your ISP. Netflix supports various devices, including phones, computers, smart TVs, gaming consoles, and set-top boxes. Most phones have higher resolution than TV screens, requiring smooth resizing for video playback. Streaming services follow five steps: content creation, service setup, content sharing, sharing with other services, and delivery. Netflix collaborates with copyright holders to pay for streaming rights. Data collection and analysis drive content discovery, creative decisions, pricing, and personalized recommendations. Subscription fees fund Netflix’s operations, including content acquisition, partnerships, and Amazon Web Services computing. Metadata from content providers and viewing habits enhance recommendations. Other companies collect data for content payment and new content creation. Streaming services use data to optimize services and generate revenue. Despite shared functions and content, streaming media companies differ due to their media and tech sectors. Netflix connects people and content sharing, bringing together actors, creators, service providers, and device makers. Despite its size, Netflix relies on others to manage operations and ensure smooth functioning.
New media players like Netflix differ from traditional media companies and require separate study. Netflix uses user data to stay competitive, setting it apart from old media companies. Regulatory challenges arise due to the diverse nature of new media players. A non-binary approach to regulation and taxation is needed. Media scholars, regulators, and policymakers must understand streaming media’s role and power in national media systems. Streaming media providers operate differently, necessitating rule adaptations to ensure diverse voices. Netflix exemplifies streaming media’s complexity and importance in the TV and movie industries. Anders Fagerjord, an expert in streaming media, convergence, multimodality, mobile media design, design theory, and digital humanities, provides the knowledge needed to analyze this. Lucy Kueng, a professor, author, and advisor with expertise in media strategy, has a Ph.D. in Media Studies from the University of Oslo and is affiliated with the Department of Linguistics, Literature, and Aesthetic Studies at the University of Bergen. Lucy Küng focuses on how digitalization affects strategy, innovation, and leadership. Küng, with a Ph.D. and Habilitation from the University of St Gallen, an MBA from Ashridge/City University, and as former President of the European Media Management Association, co-edited “The Netflix Effect” with K. McDonald and D. Smith-Rowsey. Evans, Hagiu, and Schmalensee explored platform economics, Donders discussed platform changes in television markets, and Finn examined how algorithms shaped imagination and culture. Gawer and Gillespie discussed platform studies and their political implications, while Gimpel and Grece analyzed video platform trends and the future of video platforms and streaming video-on-demand (SVOD) market trends.
Netflix uses taggers to analyze and categorize content, as discussed in a 2012 Los Angeles Times article. K. Hosanagar’s article explored CDN pricing, while M. Jenner’s examined TVIV, Netflix, TVIII, and binge-watching in the context of new media and society. C. Johnson’s article explored how television has evolved online, especially the impact of VoD interfaces, ITV Hub, and other streaming services. Netflix’s business model aims to disrupt Hollywood’s production and distribution model by partnering with studios to create original content and distributing it through its platform, collaborating with internet service providers to ensure a great viewing experience. Netflix, a two-sided platform connecting content creators with fans and generating revenue through subscriptions, has revolutionized entertainment viewing. It obtains content through licensing agreements and original shows, competing with studios while providing them with a large audience. Netflix’s rise has forced studios to adapt their business models, leading to increased competition for content and distribution. Streaming services raise prices to fund original content and new technology, enabling better shows and movies. The recent price increase in the streaming industry has prompted consumers to seek premium, well-curated content.
Several streaming services, including Disney Plus, Netflix, Amazon Prime, Apple TV+, and Hulu, have raised their subscription prices to fund content creation and rights acquisition. Streaming services’ growth has increased costs, straining budgets. Netflix faced subscriber growth slowdown and even lost subscribers in 2022. Initially, Netflix offered password sharing, but Hulu realized the need for paid subscriptions. Hulu maintains both ad-free and ad-supported tiers, with the latter being more profitable. Streaming services lower ad-supported tier prices due to success. Most offer ad-supported tiers to attract new subscribers and boost revenue, but these don’t guarantee profitability due to upfront costs and competition. Some users subscribe to multiple services, while others choose a few and their content.
Subscription management strategies, such as forever subscriptions and service switching, are gaining popularity. Streaming services offer flexible pricing, potentially saving users money compared to cable TV. Rising prices like Hulu’s have prompted users to reconsider their subscriptions. Streaming services’ popularity stems from the increasing cost of traditional TV and the vast array of options. Streaming technology transmits audio and video files over the internet. Streaming services deliver video, music, and other content directly to screens or headphones. Netflix, Hulu, Amazon Prime, and Spotify are examples. Streaming media existed before the internet but gained popularity with faster and more reliable internet speeds. Cable TV was expensive and of poor quality, while streaming offered access to any content at any time, without storage space or device compatibility concerns.
Streaming services provide a customizable viewing experience with no ads, a wide variety of genres, and original programming. However, binge-watching can be unhealthy, distracting, and lead to social isolation. Streaming services can be expensive, and content may be removed. While streaming offers convenience and flexibility, it’s essential to consider potential drawbacks. Streaming platforms have democratized entertainment by bringing international content and giving creators more freedom to explore unique topics. They’ve revolutionized TV viewing, making it easier to access international shows like “Narcos” and “Dark,” and offering more options and lower prices. Initially, streaming services displayed ads, but now they primarily generate revenue through monthly subscriptions. Binge-watching has become popular, allowing viewers to watch entire seasons of their favorite shows in one sitting.
Niche streaming platforms cater to specific groups, ensuring a diverse selection. Streaming services experienced rapid growth during the COVID-19 pandemic, with over a billion subscribers in 2020 and a 21% increase in the third quarter. Africa saw the largest jump, with a 273% increase. Other regions also experienced growth. The future of streaming is uncertain, but it could involve established players or a mix of services offering more choices and lower prices.
In a nutshell, this module introduces you to the world of new streaming services, explaining OTT, its impact on media, and the evolving dynamics of this industry.OTT advertising has revolutionized advertising, offering mobile and CTV advertisers direct reach to users. It enables precise targeting based on viewer preferences, demographics, and behavior, unlike legacy media ad buying where impact measurement is challenging. OTT provides view-through attribution (VTA) and click-through rate (CTR) measurement. Streaming services, prevalent in the entertainment industry, are expanding rapidly. By 2028, they are projected to reach $330 billion with billions of global users. YouTube leads with over 2.6 billion active subscribers. 85% of US households have at least one streaming service, with most having multiple subscriptions. 50% of Americans spend over $50 monthly on streaming services, with 35-49-year-olds being the most likely subscribers.
The video streaming industry generated $72.2 billion in 2021 and is expected to continue growing. Streaming services aim to reach 1.3 billion subscribers by 2024 through fresh content and popular platforms like Netflix, Disney+, and Discovery+. Multiple subscriptions are common, with 58% of customers subscribing to multiple services for diverse content. The streaming industry is projected to reach $330 billion by 2030, with 85% of US households having at least one video streaming subscription and 60% having at least one paid music streaming subscription. Streaming services are here to stay.
That wraps up today’s episode of The Study Guide. Remember, we teach to learn, and I hope this has helped you understand Module 6: New Streaming Services better. Keep studying, keep learning, and keep pushing toward your academic goals. Don’t forget to follow me on all platforms @Kingmusa428 and check out more episodes at kingmusa428.com. See y’all next time!
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