Case-Study: YouTube, the Internet and the Future of Movies
1. What competitive forces have challenged the movie industry? What problems have these forces created? What changes have these problems caused the movie and television studios to make?
The competitive forces that have challenged the movie industry are YouTube, google and other online sources where customers can download and watch movies/Television shows for free.
The development of the movies and TV shows online has become a major problem for the movie/tv industry. YouTube, which started up in February 2005 quickly made the most popular video sharing website in the world with over 100 million views daily. Soon enough, video clips of copyrighted Hollywood movies and television escalated on YouTube. The media had to go through $1.25 billion in damage and lost battle. In fact, the industry claims that 30-70% of the videos on YouTube are illegally downloaded. Since customers were now watching movies for free, this put a great impact on them. Sales of DVDs were declining while downloading and watching movies online were growing. So, to solve this problem, the movie and television studios decided to do something about this. YouTube has now negotiated with CBS, Universal Music, Lionsgate, Electronic Arts and other media companies who have the copyrights to “claim” their videos and start showing ads alongside them. So now, YouTube and the copyright owners share the revenue. Although even today, not many DVDs are bought because everyone started to watch movies and such online. At least today, the industry got their credit and half of the profit made.
2. Describe the impact of the disruptive technology on the companies discussed in this case.
The disruptive technology had a significant impact on this case. The ability to quickly download material and having it run the web, was really hurting the movie/TV/music industry. Having the videos and songs readily available on YouTube or any other online...