IMSC Innovation Management
Innovation, Entrepreneurship and Management Report
Some On-Demand Internet Streaming Media Companies Such As Netflix And Amazon Have Recently Decided To Produce Their Own TV Series. How Likely Is It That This New Business Model Will Become Dominant In This Industry?
The media industry is experiencing significant change and sustained growth. Propelled by digital technology the way television is made and consumed is shifting irreversibly from advertising supported Network Broadcasters to Internet Video Streaming (IVS) providers. Netflix and Amazon are leading IVS’s rise and evolving business models to satisfy an ‘on-demand’ generation. Analysing both companies’ business models reveals Amazon’s superiority. Amazon, unlike Netflix, is able to create revenue streams across its integrated value chain. Yet, business model superiority is not sufficient to generate the subscription numbers that are vital to success. Utilising Rogers (2003), Teece (1989) and Hagiu (2013) this report analyses strategic options available to IVS providers to consolidate their dominance. Amazon and Netflix are equally ‘Adoptable’ but Amazon is better able to profit from innovation as a strong ‘multi-sided platform’. Therefore, despite the challenges of further internationalising its IVS offer, Amazon is likely to dominate the industry.
| Section | Page |
| | |
1. | Introduction | 2 |
2. | The Television Industry | 2 |
3. | Business Models | 4 |
| * Netflix: The discovery channel | 4 |
| * Amazon: Spinning into prime position | 7 |
4. | The Studio Model | 9 |
5. | Why Amazon Studios Can Dominate | 10 |
6. | Strategies For Domination | 10 |
7. | How Likely Is It That This New Business Model Will Dominate? | 16 |
8. | What Of The Future? | 17 |
Propelled by consumer demand, hyper-connectivity and the ubiquity of digital devices the media industry is undergoing huge...