UK Market for Streamed Video on Demand | A Level Economics Application Examples

Описание: In this video we explore the fast-growing market for streamed video on demand, dominated by scaled businesses such as Netflix, Disney, Amazon, Hulu, Sky and others.

The video asks a number of revision questions to help Economics students understand some of the dynamics of the industry focusing for example on costs, pricing strategies and the impact on other sectors such as cinemas.

#netflix #amazonprime #disneyplus

VIDEO TIMESTAMPS
00:00 - Introduction to the market for streaming services video on demand
02:13 - Netflix's rise to become the biggest streaming service
03:22 - Discussion on price elasticity of demand for streaming services
04:27 - Factors affecting price elasticity of demand for Netflix
05:00 - Reasons for Netflix departing from pure profit maximization
06:36 - Examples of non-price competition in the video streaming market
07:38 - Examples of price discrimination used by video streaming businesses
09:10 - The concept of social tariffs as a form of price discrimination
09:44 - Discussion on fixed and variable costs for growing businesses like Netflix
10:56 - Examples of internal economies of scale for Netflix
11:27 - Impact of video on demand on the UK's cinema industry
12:31 - Responses from cinemas to the growth of video on demand
13:32 - Consideration of Netflix's growth and its impact on internet traffic
14:46 - Conclusion and closing remarks

VIDEO SUMMARY
The market for streaming services, specifically video on demand, has experienced significant growth, with revenues surpassing $6 billion in 2023. Major players in this oligopolistic market include Amazon Prime, Netflix, Disney+, and Apple TV+. These companies employ price discrimination and product differentiation strategies to attract customers. Netflix, with the largest subscriber base globally, has been highly profitable, earning over $4.5 billion in profit in 2022. Price elasticity of demand for streaming services varies due to factors like competition, consumer loyalty, and the quality of original programming. Netflix focuses on long-term growth and market share rather than pure profit maximization, aiming to achieve economies of scale.

Non-price competition in the industry revolves around streaming quality and exclusive content. Examples of price discrimination include discounted rates for students, family plans, and country-based pricing. Netflix incurs high fixed costs due to server-side infrastructure, but its variable costs, such as streaming content and loyalty fees, remain relatively low. The company benefits from internal economies of scale through monopolistic purchasing power, vertical integration, and investments in server-side infrastructure. The rise of video on demand has affected the UK's cinema industry, altering consumer behavior and prompting cinemas to enhance the cinema experience and explore alternative revenue streams. The dominance of streaming services like Netflix and YouTube has led to a significant portion of global internet traffic.