The Entertainment Conundrum: How video content providers and highly demanded products can compete in the future

By Nathan Mass. Stanford University. 

The entertainment industry and its predominant content providers have found themselves in an unusual predicament. Demand for their product is high but innovations in computing and home viewing technologies threaten to derail long-standing industry practices, revenue models, and the sustainability of the industry itself. Major production studios have been noticeably reactionary in response to innovation and, as a result, find themselves behind the curve in capturing consumer surplus while laying minimal groundwork for future expansion. As theatre going audiences dwindle and free online content becomes widely accessible it is obvious that the industry is in need of a strategic overhaul to handle dynamic technology and changing entertainment consumption habits. This paper will outline the historical trajectory of the entertainment industry and draw on contemporary research to posit a viable business strategy that will keep content providers competitive in the future.

The remainder of this paper is organized in four sections. Section 2 provides contextual analysis of standard revenue models, applicable viewing mediums, demand changes, and the advent of the internet and peer-to-peer file-sharing. In section 3, the current challenges facing content providers will be further explored. Section 4 is dedicated to bridging the missing market phenomenon between providers and consumers with particular focus on new revenue strategies to handle dynamic technological and consumer changes. Section 5 concludes the paper.

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