VOD by Sam Huntley

Netflix, Amazon Prime, Hulu all three of these brands have become a household names in the past 5 years more than David Beckham was in the late 90’s through to the mid noughties. Whether you belong to the Netflix clan or the Amazon Prime following, these Video on Demand services have become the dominant players in the Video on Demand market. Both services are continuously growing each day as they evolve from streaming services loaded with old movies and TV shows to producing and creating their own TV Shows and even dipping their toes into the Film industry with recognisable success. To really evaluate how much digital technology has impacted on Video on Demand, I will be comparing how the companies Netflix and Amazon Prime began in 1997 and how they have grown over the past 2 years, how both companies integrated digital technology into their Video on Demand services and finally presenting whether it has had a positive or negative impact upon the Video on Demand market.

As stated in the 1997 Amazon Investor Relation letter to their shareholders ‘Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million’ which by any means is a substantial year for the web service, however the 2015 annual report really cements how much the company has expanded in nearly two decades. Within the first lines of its annual report for 2015 the document states ‘Amazon became the fastest company ever to reach $100 billion in annual sales. Also this year, Amazon Web Services is reaching $10 billion in annual sales’. This gives just a small example of just how big the company has expanded over the 19 year period, namely thanks to the evolution of the internet. Luckily for Amazon Prime they utilised the internet to absorb the streaming service Love Film and are now one of two major players in the Video on Demand market.

The other player in the Video on Demand market is Netflix. Whilst Netflix started in ‘1997 – Reed Hastings and software executive Marc Randolph co-found Netflix to offer online movie rentals not dissimilar to Blockbuster, it was largely based online when it started out providing the service to only the most tech savvy of people in the late 90’s where as in 2016 the company states that ‘the Netflix service…130 countries with over 81 million members’. These figures show just how much has changed for the Video on Demand services in just a 20 year period.

The main question this global dominance raises, is whether this has had a positive or negative impact on the Video on Demand market?

Initially the reaction would be ‘of course it’s positive!’ However many people over look how the emergence of the online video demand services affected the companies which relied solely on the rental or sale of DVD’s, namely HMV and Blockbuster. Back in 2009 the video rental company hadbeen struggling in the States in the face of competition from Netflix, a DVD rental service which operates via the post’[1]and faced closure ‘960 of its 4,400 US stores’ and by the end of 2013 the high street chain had completely disappeared from high streets around the world including the UK, following in the steps of Woolworths. However blockbuster wasn’t the only casualty, the entertainment store HMV also suffered from the increase of Video on Demand as in 2013 the company went into administration and faced ‘the closure of the 66 identified stores’. Whilst the injuries inflicted upon HMV weren’t fatal like the Blockbuster case with some of the stores still standing and slowly recovering the impact that Video on Demand was fatal to many employees of both companies which is the largely negative impact the emergence of Video on Demand has had.

However, there has been an overwhelmingly positive outcome from the increase of the Video on Demand market. Over the past two years there has been an increase of original content created from both Netflix and Amazon Prime. Shows such as Daredevil, House of Cards (Netflix) and The Man in High Castle (Amazon Prime) received overwhelmingly positive acclaim from both critic and fan audiences alike. With House of Cards winning 6 Emmy’s for a range of different categories such as ‘Outstanding Casting For A Drama Series[2] demonstrating how the Video on Demand services are now beginning to permeate through to official award ceremonies challenging the TV shows from big budget broadcasters such as HBO and AMC. Another positive outcome from the uprising of Video on Demand is the surge in original content and the new found freedom that film-makers have over their projects. Filmmakers who make shows for the Video on Demand markets are not restricted to achieving a certain rating or audience as their target audience is already subscribed to the certain On Demand service. This was recently backed up by the British writer/director Ricky Gervais. During an interview with BBC Radio 1 regarding the creation/release of his new film, Gervais said the following remarks you want as many people to watch your film as possible. They [Netflix] have 75 million subscribers…the company offered more creative freedom than a film studio usually allows. This goes on to further cement the positive impact the Video on Demand has had not only on high street stores but on the creation of new shows.

To conclude, the amount that Video on Demand has expanded over the past two decades has been exponential as shown by the statistics of the two largest players in the market. Whilst this evolution of the market had some casualties in the shape of Blockbuster and HMV, the outcome has been overwhelmingly positive. With not only Netflix and Amazon Prime being the only streaming sites, nearly every major channel on British TV has its own Video on Demand such as BBC iPlayer, All 4 and ITV player to name but a few. As this area of the market has grown so rapidly it will be interesting to see where the future takes Video on Demand.

 

[1] http://www.theguardian.com/film/2009/sep/16/blockbuster-film-rental-close-stores – accessed 28/04/16

[2] http://www.emmys.com/shows/house-cards – accessed 29/04/16

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