Media and Entertainment - Digital Content Providers - Group Post

We analyzed the key players in digital content distribution: Amazon, Comcast, Hulu, Netflix, TiVo and Youtube.

As depicted in the chart, the content providers range from Big Studios to individual users. These companies distribute the content via different channels to end users. There are areas of overlap as evident from the multiple arrows to the same box. This in effect places each of these companies at the juxtaposition of many markets (Content Distribution, Advertising, Market Research et al).

Emerging Trends

As we have discussed in class, the speed of communication is doubling every two years. This trend has had significant impact on the video content distribution business, allowing digital video content to be widely distributed across the internet. The Bandwidth law is not slowing down and we believe that this driver will continue to reshape the industry.

The three major industry shifts we see are:

1 - Renewed Fight for the T.V.

2 - Data Analytics

3 - Mobile video

1 - Renewed Fight for the T.V.

Increasingly, users are bypassing their cable companies television offerings and using the internet to recieve their video content. The shift is towards Video On Demand rather than schedule based service provided by cable operators. Internet video quality is approaching the level which is achieved on the traditional cable network. There are plethora of set-top boxes offered by different companies such as Roku, Boxee, Tivo, AppleTV and Google as well! These new boxes "cut the chord" and use the internet to download or stream content to the user. With the recent shift towards IPTV, the streaming of content and Video On Demand will be even more appealing.

2 - Data Analytics

Unlike the initial stages when many of these companies were focused on innovative offerings via set-top box, the shift is towards mining data to attract advertisers. The two way nature of the internet allows video content distributors to learn more about their users and their users viewing habits. This vast amount of data combined with improved algorithms and processing power, will allow advertisers to drastically improve the ad targeting. The data and the ability to extract valuable information will drive a business model shift for many content distributors.

3 - Mobile video
According to a recent Morgan Stanley report, mobile video distribution is set to increase 66x its current levels. Mobile video traffic will account for 64% of the total mobile bandwidth. Video content owner and distributors will be fighting to monetize this new market. The key players do not want to miss the huge opportunity and are all set to provide their services on the Mobile phone (e.g. Youtube on mobile, Comcast mobile, TiVo mobile etc). Considering the small size of the mobile screen the offerings are limited. However, the term mobile may mean different to different people (with Steve Jobs statement on more mobile devices sales than sales of Nokia)!