Netflix and the over the Top Video Streaming Market

Company Industry Analysis- Netflix and the Over the Top Video Streaming Market

Executive Summary

There has been an increase in consumers using over the top (OTT) into existing video streaming technology which has led to the advancement of the market in general. Global demand of video streaming is increasing because of consumers using this technology for everyday things like watching live events and video calling. Convenience of watching the content and increase in the content itself has led the way towards the growth of this market segment. Streaming allows playing a video file without downloading and without a delay. This paper will give a high-level analysis of the video streaming industry, detailing about the OTT market and the position of Netflix.

Video Streaming Market

Video Streaming industry is swiftly observing shift towards digital formats. Rapid internet penetration and increased access to multimedia devices has led the industry to a point where a lot of time is being spent viewing online content.

Video streaming market segmentation can be further done based on solution offered by providers :

1. Pay TV : Subscription cable TV offered by digital and satellite TV providers. This is a highly elastic market because of presence of many cheaper substitutes.

2. Internet Protocol TV: Same as above. Highly elastic.

3. Over the Top Model: This is used to refer to audio, video and media services which are transmitted via internet as a standalone product. This segment is inelastic.

Market Competitors for the OTT video streaming market are:

1. Free Video Streaming Websites: Websites like Youtube, Vimeo, Dailymotion and nowadays even Facebook provide video streaming capabilities for free. A user can just access them without a subscription fee.

2. Illegal Streaming Websites: There are certain websites which host the connect from OTT providers on their servers for their users Illegally. This is not such a big problem in the US, where illegal internet traffic is regulated, but in developing countries like India, video and audio piracy is very prevalent and eats up the revenue stream of the OTT providers.

3. P2P Torrent Networks: Torrents are a very popular way of illegally accessing video content for free. These also, like illegal streams, eat up into the revenue streams of OTT providers.

Some key market drivers leading to rise in demand of video streaming market are :

1. There has been a sharp increase in number of video enabled consumer devices in the market which has led to the growth of demand of OTT streaming.

2. End to end video management, privacy in publishing and reporting is expensive. Increase in number of production