The On-Demand Video Market Threat Of New Entrants Threat Of Substitute Products Medium/Low High Free Media Sources Exist Cable Networks Control Original Content Torrenting / Pirating Content YouTube & Other User Created Content Traditional Cable On-Demand Options Premium Cable Networks: HBO, STARZ, Showtime Multiple On-Demand Streaming Programs: Amazon YouTube Hulu Plus Power Of Suppliers High Good Content Needs Talent Talent Needs Money Bargaining Power Of Consumers Intensity Of Competitive Rivalry Great application of Porter. There are over 400 programs out there. The days are gone when the big studios and the broadcast/cable networks had a lock on TV style programming. High High Popularity Contest & User Makes The Rules High Demand & Fast Consumption Loyalty But System Work Arounds Popularity Contest & User Makes The Rules High Demand & Fast Consumption Loyalty But System Work Arounds

Netflix’s Value Proposition Netflix & MRC On-demand Media Content Streaming Via Internet Low Cost Cable Alternative Flat Rate Pricing For Streaming Original TV Shows With Multi-Seasons Program Loyalty Ability To Quickly Create New Content To Meet Demand No Ads Compatible Technology Following-up on your earlier slide, another value driver for Netflix, which may serve as a future barrier for competitors, is the database at the disposal of Netflix, Amazon, YouTube, etc. Their information takes more of the guess work out of projecting success. Also as markets become more fragmented the firms with business models that can sustain profitability with smaller audiences will have an advantage. Another words, firms will have to learn to scale downward to smaller homogeneous segments.

Netflix’s Differentiation No Original Content. Pay Per Show Model. Prime Membership($80 Year) – High Price Point. Limited Content. Subscription + Ads= YUCK. Technology Glitches. Original Content But Lower Quality & Not Well Promoted. Only HBO Content. Slow To Create More Content. Pay Per Episode Model. Technology Not Compatible With All Devices. Commercials. Cable Provider Required. Only Viewable On Desktop. Bad User Interface. Ads. Cable Network Provider Required. Nice overview of competitors’ weaknesses. I would still be careful with Amazon, they have some interesting programing now and more to come. Also they have very deep pockets. As you noted before, it is about quality content and a firm’s ability to bid on it and find an audience for it.

MRC Should Create More Original Programming High Demand Big Head Start In Industry Loyal Fan Base Talent Award Validation Enabled To Create & Better, Faster Custom Content Artists Are Valued On-Demand Video Market Is Growing Traditional Cable Networks Restrictive & Political Stability In Video Content Demand Netflix Has Reoccuring Revenue Via Subscriptions & Doesn’t Rely On Advertiser Dollars

Potential Broadcasters For MRC Live Broadcasting (Periscope, Meerkat) Podcasting App Video Games Webinars

Sources http://www.marketingcharts.com/television/pay-tv-penetration-rates- 2010-2015-58837/ http://www.tubefilter.com/2013/10/16/video-infographic-statistics-getty- images-istock/ -http://www.marketingcharts.com/television/whos-using-video-on- demand-36645/attachment/nielsen-age-distribution-tv-vod-users- sept2013/ http://www.marketingcharts.com/television/whos-using-video-on- demand-36645/attachment/nielsen-age-distribution-tv-vod-users- sept2013/ http://www.statista.com/statistics/277777/most-popular-us-online-video- catogories/ http://www.statista.com/statistics/271611/digital-video-viewers-in-the- united-states/