sundaridevi - 9:20 am on Apr 27, 2011 (gmt 0)
Where is the new revenue going to come from?
Many people today pay a cable company for their media. Fast Forward only 5 years and we can imagine a world where most people consume media without the container (e.g. DVD, VHS) and it is streamed or downloaded from somewhere without the cable middleman, or with a cheaper middleman (the streamers). Maybe people will consume more paid media at home when it costs $2 or $3 rather than $15 or $20. People under 30 already laugh at me for buying blu-ray discs, DVDs or CDs...say I'm old fashioned and stuff! I wish I could still buy a double album and read the liner notes for an hour while I listen!
Today online video revenue for free streaming sites comes from in-video ads (like Hulu) or from on page ads (like AdSense or other traditional banner type ads), but that revenue is pretty small compared to what you get for VOD or paid downloads. So I imagine it will soon be more like cable, subscription fee with Pay Per View for recent release movies, or in some cases just Pay Per View.
Hollywood is better off with more competing streaming services (Yahoo, Amazon, NetFlix, ITunes) because then the margins of those services will fall as they compete to sign deals with the major studios. How can the streaming services differentiate themselves? Distribution (here that means which hardware platforms are they on), product offering, including what is their free offer and what else does their site offer to make VOD an impulse purchase? So here NetFlix's only advantage is their vast offering. Amazon and YouTube are everywhere that NetFlix is and YouTube has the biggest free offering, even if it is often quirky...So this will get interesting, and cheaper for us and less profitable for the streamers.