Richard Oppenheim, Searcher 20. 8 (October 2012), pp.16-19.
Supports hypothesis
In the Trade Journal Searcher, October 2012, Richard Oppenheim in an article titled “The Video Stream Rises” makes reference to an IHS Screen Digest press release, March 2012 by a senior analyst Dan Cryan, who proposes that “Video streaming will surpass DVD and Blu-ray Discs as American's favourite for watching movies this year” (Cryan, 2012). It estimates that 3.4 billion movies will be watched online compared with 2.4 billion watched on physical media. In this report, Cryan states that “video-movies, TV shows, documentaries, et al. - on physical media is ending” (Cryan, 2012). The driving force behind this change comes from increasing broadband speed, the mobile network and video viewing hardware of multiple sizes. The convenience of watching is made possible through mobile streaming technologies.
Oppenheim goes on further to say that, “issues surround the problem that streaming does not yet have a viable financial model”. The existing services allow users to watch all they want for the price of a subscription, but in the future, technology is looking at improving security through integrating digital rights chips into mobile devices. While the television provides access to major network broadcasts, online steaming is expanding beyond these services. Oppenheim also says, “there is a huge difference between cheap and free” [...] “The psychology of "free" is being redefined” [...] “The most common of economies is built around free has three participants. In this model, a third party - an advertiser, sponsor, or gift-giver - pays for the product or services created by a free exchange between the other two parties”. He also goes on about another model where you give away a product or service for free or at a low cost and once you have your customers you can up-sell the extras, or in other words as he put it, “give away the razor and sell the razor blades”. Whatever service is offered, there is an initial cost to set up and a minimal number of customers to cover this cost. After this more customers can be added at next to no cost.
Oppenheim then went on to quote the research by Gartner. In summary, (from directly accessing this Press Release), it is reported Consumers will spend $2.1 trillion worldwide on digital information and entertainment products and services in 2012. This spending on products and services was for “mobile phones, computing and entertainment, media and other smart devices”. They went on to say that the consumers are willing to pay for content they deem valuable, otherwise they will put up with web advertising in return for free services (Stamford 2012, Jul 26).
Citations:
Cryan, D. (2012, March 22), US Audiences to Pay for More Online Movies in 2012 than for Physical Videos. IHS. Retrieved from http://www.isuppli.com/Media-Research/News/Pages/US-Audiences-to-Pay-More-for-Online-Movies-in-2012-than-for-Physical-Videos.aspx
Oppenheim, R. (2012, October), The Video Stream Rises. Searcher, 20.8, pp.16-19. Retrieved from http://www.tmcnet.com/usubmit/2012/10/06/6631818.htm
Stamford, C. (2012, July 26), Gartner Says Consumers Will Spend $2.1 Trillion on Technology Products and Services Worldwide in 2012. Gartner. Retrieved from http://www.gartner.com/it/page.jsp?id=2094015
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