How Have Online Streaming Services Impacted The Entertainment Industry?

How Have Online Streaming Services Impacted The Entertainment Industry?

By Adam Smith | Finance Contributor on September 27, 2018
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In the pre-internet age, TV and movies were the only primary sources of entertainment for the adults. In the case of the former, the audience had limited control over the content and so, tough decisions had to be made all the time.

For starters, you had few options for the TV shows depending on your schedule. For most working professionals and business owners, your work schedule and appointments calendar grants you 2-3 hours of free time in the night after you came back from work until you had to hit the sack. So, if you had two favorite shows but both were broadcasted on different channels in the same time slot, then you had no option but to drop one of them.

Moreover, if you missed an episode, then there was no way to watch it again unless you had a VCR recorder (maybe also add modern TV recorders etc.). However, that equipment didn’t come cheap and even if could afford one, recording TV shows frequently was simply impractical and a waste of time.

Fast forward to today, TV has a new definition and a whole new target demographic. You can literally binge-watch a full season or season(s) of FRIENDS or Game of Thrones in a single sitting if you want to.

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The Rise of Online Streaming Services

The first livestreaming event was recorded on September 5, 1995, when ESPN SportsZone streamed a live radio broadcast of a baseball game between the New York Yankees and the Seattle Mariners for the subscribers around the world. This was made possible with an advanced technology that was developed by a startup called Progressive Networks. However, that was just the beginning.

By the mid-2000s, the Internet had started to become more accessible and affordable than ever. Thus, the demand for various forms of digital content shot up and new online streaming platforms emerged on the surface which included the biggest video-sharing website ever i.e. YouTube.

Today, online streaming services are overtaking the traditional cable industry and there many ways you can enjoy your favourite shows without distractions and that too in any corner of the world i.e. even if a service is banned in your area. For instance, Netflix which is a huge success in the USA isn’t available in many countries even today. However, the Americans can use VPN services to unlock and watch American Netflix abroad just as they would in their hometown. Thanks to the Internet, if you know where to look, you can find solutions to problems like these easily.

The Demand for “On-Demand”

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Today, the people want everything “instantly”. No one has the patience to wait for a single new episode every week. Even the advertisements that are put in the traditional TV programs are quickly becoming a big “no-no”. This need for instant and uninterrupted entertainment can be easily understood by glancing at some of the informative charts about Netflix which is currently the biggest video-on-demand (VoD) service across the U.S. These show that:

  • Netflix is projected to have over 114 million households subscribing online by 2020
  • With 77% of all VoD services subscribers in the U.S., it is the biggest player in the market
  • Netflix’s online streaming business in the U.S. alone is expected to generate over $7 billion in revenue by 2020

Needless to say, Netflix is dominating the entertainment industry and the standard TV is looking archaic already. All of this because people don’t mind paying a premium price for something that can be accessed or used “now” rather than “later”. This consumer trait is also supported by the online shopping industry in which 61% of shoppers are willing to pay extra for the same day delivery (source: smallbiztrends).

The Power of Exclusive Content

Smart entertainment companies understand the value of exclusive content. For instance, Sony PlayStation’s exclusive titles like Uncharted series, Horizon Zero Dawn, and the much-talked-about game God of War are some of the games that helped PS4 sell 75 million units compared to Microsoft Xbox’s 36 million units which are less than half. This massive disparity in sales is mainly because Sony is literally pumping money into its exclusive titles with no restraints and that’s paying off.

There is no doubt that the idea of offering exclusive content works, granted the content itself is top-notch. It is now actively adopted by online streaming companies too which include Netflix and Amazon. In fact, there are at least 10 original Netflix movies that are simply extraordinary and a must-watch for any movie buff. There are also a number of high production value and original TV shows that are giving other shows a run for their money. These include Netflix’s Daredevil, Jessica Jones, Orange is the New Black, etc. and Amazon Prime’s Bosch, The Tick, One Mississippi, and others.

Conclusion

Saying that the online streaming services have impacted the entertainment industry would be a massive understatement. The truth is that have completely revamped the content delivery system and made video on-demand more of a norm. It’s just a matter of time when the viewers will no longer have any patience to wait for their favorite TV shows or sit through the ads. Besides, at the rate at which high-speed Internet is becoming cheaper and as the competition in the online streaming industry is increasing by the day which is pushing the publishers to lower their prices, almost everyone will be able to afford these services easily in the near future.

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