With the rise of various media networks and streaming platforms, the consumer is shifting away from the traditional way of consuming entertainment. While some feared that this change would ruin television as we knew it, we have seen more diverse and higher television programs as a result. As Disney comes out with its new streaming platform, it is clear that old models are moving forward and mixing with rising models to build a new marketplace.
In the past, the revenue models of entertainment companies were reliant on advertisements. In the 1950s, media like the Ed Sullivan Show reached over half of the American population and in the 1970s, Happy Days reached over 30% of Americans. These shows offered a huge platform for advertisements and allowed a third party, the advertisers, to finance the program, while allowing the consumer to view the show for little cost.
By the 90s cable TV programs like HBO were able to build large subscriber bases by offering their consumers new movies and sporting coverage that was not available on broadcast TV for a small price. As these companies grew, they began to produce original content. They were not constrained by the regulations and rules that regular channels were subject to. Even though not all Americans paid for this service, they were able to create hit shows that continually led in ratings.
However, it seems that the way we are consuming television is changing again. Companies like Netflix do not have to divide their fees with cable companies. This means that they are able to charge the consumer less while gaining more revenue. Disney seems to adjust to these market changes as they are soon releasing Disney+. This platform will be showcasing its classic content along with Disney+ Originals. Because these streaming platforms allow companies to earn revenue even when charging a small price, they are able to produce content that would not survive in the existing entertainment market. Many of the family movies that Disney produced, like "Old Yeller", would not be made today. They are considered too PG and would have a difficult time standing out against the fast-paced box office movies. The downturn of the DVD market and the rising costs of theatrical releases pushed Disney to shut down the genre a few years ago. However, the new streaming platform has offered Disney the chance to produce smaller films that might not be suited for the theatres.
Although old means of consuming television are falling once again, streaming platforms have been able to offer a wider range of content to audiences.
https://www.forbes.com/sites/aalsin/2018/07/19/the-future-of-media-disruptions-revolutions-and-the-quest-for-distribution/#6e5bb00960b9
https://www.nytimes.com/2019/11/07/arts/television/disney-plus-togo-noelle-lady-and-tramp.html
It is interesting how both marketing techniques and consumers change over time. As modern technology becomes increasingly more innovative and efficient, companies are finding different ways to increase revenue while minimizing loss. This ties back to the central idea of microeconomics, to discover the most efficient way to earn revenue with the resources given. It is interesting to think about how streaming services such as Disney will continue to change down the road in response to market changes.
ReplyDeleteAlthough it is beneficial to the companies branching out and streaming on their own platforms, it almost becomes harder for the watcher to enjoy shows. Personally, I have trouble remembering which providers provide which shows and they're constantly changing what shows they offer too. Just between Netflix, Hulu, Amazon Video, and HBO I cannot keep straight which shows are on which platforms. I wonder if lack of convenience will hurt these platforms in the future.
ReplyDeleteStreaming platforms like Netflix were really disruptive to the entertainment industry at first, since the market model they offered were just more popular than the other ways of watching movies until then. The success that Netflix has had came from their innovative business practices. However, the success that Netflix found seems to be pretty short lived. That's because, while Netflix's ideas were good, they don't have enough original content to survive now that Netflix is imitating their ideas. Basically, what's happening to Netflix's streaming disruption of the media industry is that it's starting to become the new normal as all other businesses are adapting.
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