Online video streaming industry is heating up

By Maureen Aylward

Netflix is quickly becoming the largest video subscription service and its competition is racing to catch up. Netflix’s growth over the last year is a sign that something is happening in the online video streaming business. We asked our Zintro experts to comment on what’s happening in the industry, how it might be changing, and what new thing might be coming our way in online video services.

Jay O’Conner, CEO of World Colours Network Television and an expert in social media brandcasting and monetizing streaming video, says that Netflix and its nearest competitors will face challenges from a new breed of independent producers who are savvy enough to understand transmedia brandcasting and the relationship between social networked consumers and advertisers. Transmedia brandcasting involves optimizing brand narratives through multi-format, multimedia, and multi-device content and web services for mobile, print, packaging, signage, and satellite TV. “The company that can provide the technology, content, and mechanism to create a relationship from the audience to the advertiser to the brand will be the key player,” says O’Connor. “Companies like Netflix need to figure this out before Facebook and Google TV get there.  Otherwise, Netflix runs the risk of experiencing the same thing that Blockbuster did.”

To stay competitive Netflix, YouTube’s online service with Sony Pictures, and Amazon’s On-Demand all need be looking at multi-format options. Within five years, online video providers will be gateways for independent producers to release more content, which is what Facebook Social Cinema and GoogleTV are moving toward, O’Connor says.

Christophor Rick, an expert writer specializing in technology, new media and consumer electronics, a social media consultant, and CEO of Gamers Daily News, says that each of the cable operators is starting to work on their own customer-only streaming services; DiSH and DirecTV are going that way too. “It’s going to be a rapidly expanding market,” he says. But there are issues and concerns. “Netflix has 20,000 titles, but a lot of studios are shying away from them, afraid that they will turn into the Apple/iTunes of video and start dictating low prices, undercutting the potential profits of the studios,” says Rick.

However, Rick points out that Netflix has a plan in place that it is beginning to implement: removing the broadcasters and studios from the equation and simply buying content directly. “Netflix has licensed one show (House of Cards), which they could turn around and sell first-air rights to one of the broadcasters if the creators allow it,” he says.

This is how Netflix will survive, by cutting out the middle man and taking their place. Instead of buying rights to stream content from broadcasters, Netflix will buy it from the creators or buy all the rights and shop them around to broadcasters. “While it puts Netflix in direct competition with those they’re trying to license content from, it lets the industry know they’ve got cash to burn on new programs and are in the market to buy,” says Rick. “There is nothing stopping them from making a strategic alliance with a broadcaster, going after new content together, thereby creating a one-two punch of traditional and streaming rights.”

By Maureen Aylward

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