Big Media's "On-Demand" Entertainment: What's the Business Model?



IBS CDC IBS CDC IBS CDC IBS CDC RSS Feed

Code :BSM0033

Year :
2005

Industry : Entertainment

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

Buy This Case Study
OR
       

<< Previous

On-Demand Entertainment In the 1950s, when television became popular, television viewing was a scheduled neighbourhood event. Later it became a scheduled family event, where the whole family huddled around the television in the living roomto watch prime time programmes. Gone are those days, when there used to be one television per household. In 2005, the average American household had 2.7 televisions - nearly one television for each member of the family. With sophistication in programming and technology, programmes too had become more focused on the individual needs of the viewers. The traditional broadcast television limited the customers' choice to implicit programming and strict schedules dictated by the network. The customers were forced to watch the programmes. The need for being able to enjoy programmes at the customer's choice of timewas partially fulfilled by the use of Video Cassette Recorders (VCRs)...

The Challenges "Today's audience is amuch tougher crowd to excite. They have somany entertainment options and they have gotten used to getting everything on demand". For customers the control over the programmes they watch is not enough. They reason that when they are ready to pay for the programmes, why do they have to wait for the programmes to be broadcast before they could view or record them. Servicing customers' needs comeswith cost. As analysts point out that the "20-120 Rule" which governs much of the communications and entertainment service provider business holds good for the on-demand service business too. The rule states that 20% of a service provider's customers generate 120% of its gross profit margins. The ability to attract and retain these customers is critical to the service providers'profitability. Hence bundling of services offered to the customers by companies. Peter Winkler, director of entertainment and media practice at the consulting firm PwC says, "The rapid growth in on-demand viewing will accelerate the battle for bundles. Companies will need to create themost conducive environment for on-demand consumption"...

For Case Books Click Here >>

For Case eBooks Click Here >>

Contact us: IBS Case Development Centre (IBSCDC), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad-501203, Telangana, INDIA.
Mob: +91- 9640901313,
E-mail: casehelpdesk@ibsindia.org

2020-2025 IBS Case Development Centre. All rights reserved. | Careers | Privacy Policy | Terms of Use | Disclosure | Site Map xml sitemap