5 Forces: Netflix
Power of suppliers: medium
The power of content producers has been greatly increased due to the multiple outlets they have the option of choosing. More content producers are making an effort to expand vertically to decrease any reliance on the companies within this industry. However, the target of the industry may move to smaller content producers which allow for less expensive means of obtaining content.
Power of customers: high
With the advent of streaming technology, the consumers have begun to leave the physical media behind. The only hope for physical media is that internet inaccessibility will not allow them to stream content. However, the spread of the digital infrastructure will ultimately allow for everyone to be able to access their favorite shows anytime and anywhere.
Threat of new entrants: medium
The industry has a handful of powerful firms that take up a majority of the market. These power players are innovating the way the industry distributes and allows for consumers to continue their DVD fixation. However, if a company were to become more creative and convenient way in their delivery of physical media, a new player will immediately emerge.
Power of substitutes: high
Much of the viewers today choose to use streaming capabilities due to its convenience as well as the lower costs. Also, viewers are now able to purchase video on demand at the click of their TV remote. As technology continues to drive these new alternatives, the power of substitutes will continue to rise.
Overall attractiveness:
The market for physical media rental has become un-attractive since the introduction of streaming services such as YouTube and other content streamers. It has allowed the viewer to stay home and enjoy all their shows. However, industry players are fighting back with their convenient delivery methods such as DVD by mail and kiosks. The most innovative players have been able to stay relevant through those methods as well as moving into other industries
The power of content producers has been greatly increased due to the multiple outlets they have the option of choosing. More content producers are making an effort to expand vertically to decrease any reliance on the companies within this industry. However, the target of the industry may move to smaller content producers which allow for less expensive means of obtaining content.
Power of customers: high
With the advent of streaming technology, the consumers have begun to leave the physical media behind. The only hope for physical media is that internet inaccessibility will not allow them to stream content. However, the spread of the digital infrastructure will ultimately allow for everyone to be able to access their favorite shows anytime and anywhere.
Threat of new entrants: medium
The industry has a handful of powerful firms that take up a majority of the market. These power players are innovating the way the industry distributes and allows for consumers to continue their DVD fixation. However, if a company were to become more creative and convenient way in their delivery of physical media, a new player will immediately emerge.
Power of substitutes: high
Much of the viewers today choose to use streaming capabilities due to its convenience as well as the lower costs. Also, viewers are now able to purchase video on demand at the click of their TV remote. As technology continues to drive these new alternatives, the power of substitutes will continue to rise.
Overall attractiveness:
The market for physical media rental has become un-attractive since the introduction of streaming services such as YouTube and other content streamers. It has allowed the viewer to stay home and enjoy all their shows. However, industry players are fighting back with their convenient delivery methods such as DVD by mail and kiosks. The most innovative players have been able to stay relevant through those methods as well as moving into other industries