The Movie Streaming Industry

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ADVANCED STRATEGY

Industry Analysis

Entertainment – Movie Streaming

Group members:

Filipa Pintassilgo, 3669

Joana Caramba, 3671

João Fonseca, 3398

Marta Fiolhais, 3421

Miguel Rocha, 3425

The Movie Streaming Industry

Nowadays, with the constant use and need for media, we see emerging industries with the potential to outgrow existing giants in the market. One sector in which this is happening is entertainment - more specifically, movie streaming. The increase of interest in watching movies at home rather than in the cinema, paired with the boom of online piracy, created a huge growth in the movie-streaming industry. They are becoming more concerned about the content provided and not about its ownership. In fact, in the US, nearly 40% of the households that are subscribing to a movie streaming service, subscribe to at least two in order to have a wider range of choices. Some of the different services include Netflix, Hulu and Amazon Prime, which all serve in-home consumers through a number of different segments, providing them with high-quality, fast, and cheap services.

Biggest Players in the industry

The two firms we decided to focus on were Netflix and Hulu, as they are direct competitors and two of the three biggest in the market. Netflix is an internet television network that provides its customers series, documentaries and featured movies (including originals) for a monthly fee. Netflix is the current market leader, owning 53% of the market. Hulu is a TV streaming platform that offers current season programming, original series, and movies. It is owned by a joint venture of The Walt Disney Company, 21st Century Fox, Comcast and Time Warner, and holds 13% of the market. Although they are not comparable in market share, Hulu is an interesting case to study as it is a younger company, only operating in the US market yet, but that offers very promising features that might present a real threat to the other players in future years. Studying the different approaches of these two companies will likely give us a good look into the future of this industry.

Why we chose this industry

It is a relatively new industry, which is growing at a very fast rate - it’s predicted that the total value of the global online movie streaming market will reach $4.4B in 2017. It presents interesting challenges, such as legal issues (related to copyright law infringements) and other entry barriers. For these reasons, and because it's already a constant presence in the daily life of the majority of the millennials, including ourselves, we are motivated to study this industry.