An individual Executive Report Assignment Sample

Introduction - An individual Executive Report Assignment

Microeconomics is the study of individual, consumer and behavior of firms in decision-making as well as allocating resources. The essay based on competition among the streaming service providers industry. Currently, competition is prevail in each industry and streaming service industry is highly competitive with the variety of streaming platforms. In this industry, content is crucial to become successful in the industry, greater emphasize on providing diverse range of quality content aids in get competitive advantage in the industry. The report with the help of several microeconomics concepts and theories outline current competition trend among streaming service providers and to represent obvious edge over others.

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MAIN BODY

Overview of streaming service providers

Streaming service providers is an online platform that provides effective services to users to listen and watch to content including TV shows, music, movies or podcast over the internet. The increasing digitalization and cost-effective internet services leads to increase demand for online streaming services (Giertz et al, 2022). Some of online streaming service providers includes Netflix, Prime, Amazon, Discovery, Apple TV, Spotify, Hulu, this all furnish paid streaming services. Contrary to this, Amazon Freedive, Roku channel, Sony Crackle. Tubi TV provides free services. Presently the increasing demand of customers towards online streaming platforms brings more companies in this industry, leads to increase competition more (Chase, 2020). The High quality content is one of the factor that attracts customers towards the platform, also this service providers use various tactics to attain and retain the user including providing free trials, increase the livelihood to convert the user into paid subscribers, personalized recommendations increase chances of long-term subscriptions, regular content update remain engage the user with platform and so more.

Current competitive trends

Current competition trends among streaming service providers are as under:

Probability over subscribers: In UK, Netflix is one of the popular streaming service during December 2023 16 million user subscribed it, it is more than half of household of UK (The most popular streaming services in the UK, 2024). The statistics increase to 17.21 million in second quarter of 2024. Amazon Prime has, second place with 12.4 million subscriber increase to 13.7 million in 2024. In addition, Disney+ is third one with 73 million subscribers. In UK several major players also include BBC iPlayer, Apple TV, Briti Box, Now TV and so more. The rate of subscribers provides competitive edge to the platform as compared to less subscriber’s platform because most of customers purchase subscription considering the subscription rate.

Source: The most popular streaming services in the UK, 2024

Ad Tiers and Pay-Per View: Currently several leading streaming services are moving towards feature of broadcast television and cable to maintain the profitability. As a result, each top streaming service introduced a lower-priced ad-tier in its subscription options, allow the platform to earn more money from ads as well as capture more price-sensitive customers. For instance, Netflix generate approximately $1 billion in net revenue on the other hand Disney generated $ 1.7 billion (Key Trends in Streaming,2024). Contrary to this, some streaming services operate via pay-per view model, in which platform charge an additional fee for premium content. Thus, the different charging model provides leading streaming service providers more competitive edge as compared to others. Ad-supported tiers are more profit- making, as allow the platform to make money off new subscribers whereas pay-per view content aloe maximizing revenue from existing subscribers.

According to the microeconomic theory of economics ly demand theory, the increase in the price declines the demand for the commodity. In the streaming service industry, due to availability of various substitution when price increase by the one platform it leads to significantly decline demand of the platform among the customer. The availability of various platforms makes easier for the customer to switch to another platform easily. Therefore, due to intense competition in the industry, the providers not significantly increase their prices due to fear of losing the subscribers.

AI, Customization and Personalization: AI plays significant role in each industry. Highly successful streaming companies are aware about the fact that to retain subscribers they need to create a unique and personalized experience for each customer. Therefore, currently to remain competitive leading streaming service provides such as Netflix, Prime, Disney significantly invest in AI algorithms to gather data about each viewer`s behavior as well as to provides customized recommendations that suits user`s preference (Rane, 2023). In addition, to create original content for streaming platform AI and data analytics used to evaluate what is popular among customers so that incorporate the evaluated preferences into their future productions. In addition, Netflix use AI to recommended suggestion of movies, series to customers, aids in increasing views on content. Thus, use of AI, customization and personalization effectively provide competitive edge over others. For instance, recently entering streaming platforms such as Paramount Plus, Max face harder time in this area. Adopting digital transformation and new AI solutions will be critical for them to remain competitive in the industry. It leads to aids service providers to increase its market share.

Sources: Market share of service provider. 2024.

Sports appeal: One of the major competitive trends driving the streaming industry is sports programming. Most of the streaming platforms identified that a large pool of subscribers are interested in streaming live sporting events. Adding sports streaming aids the platform to get competitive edge over others because it simply allow the platform automatically attracts more sports lovers, helpful in increasing subscribers rate (Meneses et al, 2022). In addition, adding sports streaming grab attention of advisors leads to boost revenue. For instance, Amazon provides streaming of WNBA, NFL and NHL as well as Champions League games. The inability of smaller platforms to offer streaming of sports events led them behind in the highly competitive industry.

Original content: Each streaming platform provides high-quality content, recently this platforms produce original content to grab the attention of customers or to make their services unique as well as differentiate from others. Platform that not produce own original content find difficulty in remain in the competitive environment (Pakula, 2020). Subscribers’ rate based on original content, therefore plays important role to provide competitive edge over other.

Use of microeconomics concepts and theories

Competitive Advantage

Apart from this, one of the microeconomic concept i.e. competitive advantage outline that quality of content, number of shows provides advantage to the platform to increase their prices even when the industry is highly competitive. The reason behind this includes that in current time customer prefers to pay more when they get high-quality content to watch. The competitive advantage in the industry aids some platform to increases their platform price without losing subscribers.

Market Structure

In the streaming and entertainment industry the market structure of Netflix, Prime, Hulu defined as a oligopoly. It clearly means that few companies controlled the whole market as compared to another smaller number of companies within the industry. It is the main competitors in the industry and act as a market leader. The oligopoly market structure in the company shows that some companies like Netflix, Prime have obvious edge over the other. The obvious edge of Netflix over others includes it has more diverse and high quality content considering the demand and preference of the customers. The platform provides foreign entertainment as well as independent films in all language as a result large amount of user prefers it more rather than other platforms. In addition, original content of Netflix, user-friendly interface as well as personalized recommendation is some of factor that provides competitive edge to Netflix over others.

In addition, some of feature of Netflix also furnish it competitive advantage over other platforms such as assistive listening, screen readers, audio descriptions, voice commands, keyboards subscription, playback speed controls, access of network up to 5 profiles on home. Also, user on premium and standard pans can buy extra member slot for $ 7.99 per month each and 4 user simultaneously stream the platform with premium subscription. This all feature aids the platform to grab the attention of wide range of users among the competitive industry which is helpful in provide competitive advantage over the others.

The platform provides better option for the movie buffs, families as well as differently-able viewers. Due to the immense and excellent features of the platform, it is preferred by the younger audience, comedy lovers as well as fans of original, independent and foreign content. Additionally, the one of the reason of Netflix to get competitive advantage in the highly competitive industry is its marketing strategy (Rohn et al, 2021). The company use digital marketing strategy to market its new content as well as attract wide range of potential customer. In this regard, company tends to make focus on do post about their new movies and content with the motive to attract customers. It helps the company to increase its subscribers in the significant manner. Moreover, the value-based pricing of the Netflix provides three different subscription options to its customers in which each option has different value related with various cost. Due to this, the brand has obvious edge over competitors who charge per movie or episode with the subscription based approach. Unlike some other streamlining platforms, Netflix uses algorithms to suggest shows and movies according to the personalization of individual. These personalization remains engaged the users and decline chances of reducing number of subscribers.

Price Discrimination

Based on microeconomic theory of price discrimination, the streaming service provides used price discrimination policy for their platform. Price discrimination is a strategy in which organization charge different prices from the customers based on some facts. For example, Netflix charges different prices to different customers according to their device, location as well as plan. The platform adjust its price based on market condition, competition as well as consumer behavior in different countries and regions (Gershon, 2020). The platform provides diverse plans for different levels of services including standard premium and ultra HD with diverse prices and characteristics. It enables the customer to pay for the streaming services according to the willingness of customers. Thus price discrimination strategy provides competitive edge to the platform as compared to the other smaller streaming service providers.

In addition the streaming services providers get competitive edge over other with the help of economics of scale. The term defines as a cost advantage experience by a organization when it increase it level of output. The benefit arises because of the inverse relation between the per-unit fixed cost as well as quantity produced. The more the quantity of output produced, the less the per unit fixed cost (Segoro and Rifaldi, 2021). For example, Prime a streaming service provider significantly invest in the production of original content as well as use of digital technology for personalization and customization. The increasing production of original content aids the platform to attract and grab number of customers towards the platform, leads to provide cost advantage. In addition use of technology including AI and data analytics aids Prime to predict about what is popular among the user as well as in deciding what to create. Tailoring content based on data permits Prime to spread the content creation cost over more user as a result aids in attain economies of scale.

Porters five force

Porter`s five force aids in identify competitive forces in industry.

Product differentiation

Apart from this in microeconomics, the product differentiation is the procedure of differentiating a product or service from others to make the product more attractive in a specific target market. In the highly competitive industry, several numbers of streaming platform furnish similar services making the industry price sensitive. Thus, to get competitive edge over other service providers product differentiation plays crucial role (Dibra and Braholli, A., 2024). It can be done via the quality of original series, content and movies that are not available on other platform. For instance, Netflix due to its original content able to grabs large amount of subscribers globally. Even the audience prefers to pay more for the better and high-quality content which makes the platform more competitive. The lack of product differentiation in smaller platforms creates difficulty in gaining competitive edge in industry.

CONCLUSION

As expressed, microeconomics usually applies to markets of products and services and deals with economic and individual issues. The essay outlined that streaming service providers have obvious edge over others because of their original content, marketing strategy, price policy and so more. The essay explains current competition trends among streaming service providers such as Probability over subscribers, AI, Customization and Personalization, Ad Tiers and Pay-Per View, sports events and so more. In addition, Netflix, Prime and Disney are leading platforms get competitive advantage due to its oligopoly market structure, production of original content that aids in get economies of scale and so more.

RECOMMENDATIONS

• It is recommended to the streaming service providers to focus on more original content to get competitive advantage in the competitive industry.
• It is advised to the streaming platforms to make focus on using AI tools to update the user with right information regarding new series, movies, content as well as price related offers, leads to furnish accountability and customer satisfaction.
  REFERENCES

Books and Journals

• Chase, B., 2020. Strategy First: How Businesses Win Big. Greenleaf Book Group.
• Dibra, R. and Braholli, A., 2024. NATIVE DIGITAL ADVERTISING, A PROPER TOOL FOR DIGITAL MARKETING EFFECTIVENESS. NETFLIX BRAND. SUSTAINABLE INTELLIGENCE IN THE DIGITAL LANDSCAPE, p.95.
• Gershon, R.A., 2020. Media and Telecommunications Economics: Principles of Market Structure, Business Conduct, Supply and Pricing. In Media, Telecommunications and Business Strategy (pp. 3-26). Routledge.
• Giertz, J.N., Weiger, W.H., Törhönen, M. and Hamari, J., 2022. Content versus community focus in live streaming services: How to drive engagement in synchronous social media. Journal of Service Management, 33(1), pp.33-58.
• Meneses, J., Souto, L., Sil, S., Silva, T. and Au-Yong-Oliveira, M., 2022, April. Sports Streaming: Transition from TV to Digital: An Analysis of Traditional and New Media Companies in the Online Environment. In World Conference on Information Systems and Technologies (pp. 220-232). Cham: Springer International Publishing.
• Pakula, O., 2020. The streaming wars+: An analysis of anticompetitive business practices in streaming business. UCLA Ent. L. Rev., 28, p.147.
• Rane, N., 2023. Enhancing customer loyalty through Artificial Intelligence (AI), Internet of Things (IoT), and Big Data technologies: improving customer satisfaction, engagement, relationship, and experience. Internet of Things (IoT), and Big Data Technologies: Improving Customer Satisfaction, Engagement, Relationship, and Experience (October 13, 2023).
• Rohn, D., Bican, P.M., Brem, A., Kraus, S. and Clauss, T., 2021. Digital platform-based business models–An exploration of critical success factors. Journal of Engineering and Technology Management, 60, p.101625.
• Segoro, W. and Rifaldi, M.R., 2021. The Influence Of Price, Product Quality And Service Quality On Purchase Decision Of Netflix Applications. International Journal of Science, Technology & Management, 2(5), pp.1705-1711.

Online

• Key Trends in Streaming.2024.Online. Available through: < https://www.alpha-sense.com/blog/trends/streaming-platforms-key-trends-and-outlook/>
• The most popular streaming services in the UK. 2024.Online. Available through: < TV streaming statistics: The most popular streaming services in the UK>
• Market share of service provider. 2024.Online. Available through: < https://www.statista.com/statistics/1487721/uk-svod-to-tv-streaming-usage/#:~:text=In%20the%20third%20quarter%20of,content%20to%20their%20watch%20lists.>

Author Bio

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