NMIMS School of commerce , Navi Mumbai

Created by:
G.Dinesh Reddy - 74052100346

Porter’s 5 force analysis Pakshal Sakariya - 74052100226

Damini Nandi - 74052100507
Harshit Mahajan - 74052100184
Vipasha Jain - 74052100319
Video Streaming Service
Bargaining power of buyers
By Damini Nandi
 Bargaining power of buyers
By Damini Nandi

The bargaining power of buyers, refer to the pressure that buyers can put on
businesses to get them to provide higher quality products, better
customer service and lower prices. It is important to keep in mind that the
bargaining power of buyer analysis is conducted from the perspective of the
seller.
❖ Bargaining power of buyers
Difference between competitors
By Damini Nandi
The low price of streaming services and abundance of content , which
are on- demand, creates competitive advantage over traditional media
services.
 Bargaining power of buyers
By Damini Nandi

❖ Switching cost.
There are minimal switching cost in streaming services. Viewers are not
tied to any contracts so many viewers are paying on a monthly basis
with the option to cancel subscriptions at any time which increases the
bargaining power of buyers.
 Bargaining power of buyers
By Damini Nandi

❖ Price sensitivity

Customers are highly price sensitive. They tend to switch to a

new or alternate service whenever the cost is increased. For
instance, in 2011, Netflix divided their DVD-by-mail service
and streaming service into two separate services, which was
earlier priced $10 per month for both together. They increased
the cost to $7.99 per month for each and in less than 3 months'
time, they lost around 800,000 customers. This increases the
bargaining power of buyers
 Bargaining power of buyers
By Damini Nandi

❖ Buyer’s ability to substitute

With traditional broadcast
television on the decline, especially
among young adults , who are
switching to streaming services, the
buyer’s ability to substitute is low.
 Bargaining power of buyers
By Damini Nandi

In conclusion, the current business model implemented by streaming services

gives its buyers low bargaining power. Low bargaining power makes an
industry more attractive and increases profit potential for the seller.
Threat of substitute services
By Pakshal Sakariya
 Threat of substitute services
By Pakshal Sakariya

❖ Number of substitute services available

The substitute products pose moderate level of risk in the media and entertainment
industry. Netflix faces threat from substitute service which are offering similar products
through rental DVDs and online streaming. In addition, the traditional media content
providers constitute another example of substitute product. Customers can also engage
in other sources of entertainment and leisure activities than online streaming and
watching media content. YouTube accounts for a large part of total video viewing as
12% of all time spent watching video is on YouTube, who offer live streaming as well as
recorded content
 Threat of substitute services
By Pakshal Sakariya

❖ Buyer propensity to substitute

With traditional broadcast television on the decline, especially among young
adults, who are switching to subscription video services, the threat of a substitute
product is low for Netflix. To handle the high level of threat from these
substitutes, Netflix has to update its content library by adding the TV shows,
movies etc. which are in demand by the customer base. The company also has to
engage in marketing to maintain the profitability and further expand the
customer base.
 Threat of substitute services
By Pakshal Sakariya

❖ Relative price performance of substitute

Netflix must also consider the bargaining power that their customers have. Many of the
newer streaming services can be obtained for less than half the price of a Netflix
subscription. It is unclear how long customers will be willing to pay significantly more
for the services when existing competitors like Hulu and Amazon Prime offer cheaper,
comparable services. Hulu and Amazon Prime also produce award-winning original
content which is an excellent substitution for Netflix. A customer can obtain both a Hulu
and Amazon Prime subscription for the same price of a Netflix subscription.
 Threat of substitute services
By Pakshal Sakariya

❖ Perceived level of service differentiation

Streaming content is the way of the future, and Netflix is at the forefront of the movement, but they aren’t going to be
the only ones who want in on the action. Competitors like Amazon prime Video and HBO are exploring the potential.
If we look at the Vennli results for each competitor (say Amazon and HBO) we see that Netflix dominates on most
choice factors, but differentiators in the eyes of customers depend on the competing offering.
• HBO specialises in exclusive TV show content. To steal HBO customers, Netflix might target perceptions of their
timely availability of new movie releases- an unmet need with this crowd .
• Amazon has comparable libraries and original content. To capture Amazon’s market share, Netflix will have to
differentiate when it comes to original content and timelines of releases.
This is a fast moving market . Netflix will need to monitor customer perception of these factors over time to see how
market changes as both Netflix and these competing offerings make movements.
 Threat of substitute services
By Pakshal Sakariya

❖ Switching costs
Switching costs for the products that Netflix offers is relatively low which increases the
threat of substitutes, since consumers don’t incur any detrimental costs from switching
between the sources of product. The subscription prices between Netflix and their
competitors don’t drastically differ making it easy to switch from one subscription to
another. The most significant substitute for online streaming media is the physical form
of DVD’s. Some people prefer to own a physical copy of a movie or television series
rather than rent it in digital form. The movie theatres is another form of substitute as
you can access the movies as soon as they are released rather than waiting for them to
be uploaded on Netflix.
Bargaining power of suppliers
By Harshit Mahajan
 Bargaining power of suppliers
By Harshit Mahajan

The supplier to streaming services are production houses who produce a show/movie/series,
However, if we look how the production houses worked on releasing in the past, we see that, They used to produce, for a example a movie and
it used to stream in theatres and used to last 90 days maximum on average and for a show it had fix timing to air on televisions, this gave rise
to streaming services which provided customers with attractive options to consumers.

But with the introduction of streaming services with major companies like Netflix , Amazon prime , etc. Now a customer can watch any
movie/show/series anytime anywhere. This was a gave the production House another reason to make a contract with streaming service
providers.
However everything comes with a threat and counterattack
 Bargaining power of suppliers
By Harshit Mahajan

❖ Threats and bargaining power of suppliers

Currently there a lot of streaming service provider which got global and national popularity, But with so
many service providers, suppliers has bargaining powers on selling the streaming rights. These streaming
rights give exclusive right to stream that particular show/movie which other streaming service providers
cannot offer which would gain more customers who wish to watch the show/movie/series, for example-
Star tv is exclusively only available on Disney+ Hotstar, Amazon prime getting exclusive rights for
Universal's live-action theatrical releases.

The suppliers currently has also started their own streaming platforms which provides their content to be
used by the customers. This gets production houses 100% of the stream income, however this is a threat to
other streaming services as they lose customers on that content. There are many examples to this like
Discovery channel starting their own streaming services Discovery+, Zee tv starting their own Zee 5,Sony
tv with Sony liv, etc.
 Bargaining power of suppliers
By Harshit Mahajan

❖ Counter measures by streaming service providers

Streaming service providers in order to counter the supplier threat have started producing their own
show/movie/series this content which is exclusively available only on their platform. The attracts more
Customers as it has no runtime on theatres and television. Currently globally and nationally every 
Streaming service provider is producing content, for example Netflix original series like sacred games,
Delhi crime which are exclusively only on Netflix.

Streaming service providers in order to counter the supplier threat have started producing their own
show/movie/series this content which is exclusively available only on their platform. The attracts more
Customers as it has no runtime on theatres and television. Currently globally and nationally every 
Streaming service provider is producing content, for example Netflix original series like sacred games,
Delhi crime which are exclusively only on Netflix.
Threat of new entrants
By Vipasha Jain
 Threat of new entrants
By Vipasha Jain

Threat of new entrant refers to the threat new competitors pose to

existing competitors in an industry. Therefore a profitable industry will
attract more competitors looking to achieve prifits. When new
competitors enter into an industry offering the same service a company
competitive position will be at risk.
 Threat of new entrants
By Vipasha Jain

❖ Barriers to entry
Barriers to entry are high for a new entrant who doesn’t already
produce their own video content due to the extremely high
investment needed in either producing new content or
acquiring content from big players.
For established organisation in the entertainment industry the
barriers to entry are fairly low as they will be also to
immediately launch the service with their own content and can
already have a fan base for the organisation as a whole or for a
specific series.
 Threat of new entrants
By Vipasha Jain

❖ Customer loyalty
Ownership has been largely replaced with so-called
subscription commerce in streaming services.
While convenient this approach depends on
consumer loyalty streaming services have to retain
customers who might only subscribe to particular
show when that show ends some might flee or
change services. Netflix customer satisfaction
dropped by 1% from 79% to 78% when Disney new
streaming service to launch. Netflix announced a
drop in US customers
 Threat of new entrants
By Vipasha Jain

❖ Capital requirements
Another barriers facing new entrant to the
market is acquiring the network capacity to hold
a significant amount of video content as well as
support substantial website visit without
crashing. This capability is expensive and this
high capital expenditure will prevent loss
established competitions from entering the
business. Streaming services also spend too much
on advertising to attract new subscriber.
 Threat of new entrants
By Vipasha Jain

❖ Government policies
In in the streaming service, syndication deals,
licensing agreement and other streaming services
makes it hard for broadcasters to offer exclusive
content. To major impediment to becoming an
online video streaming service is acquiring, creating
and licensing content.
In India over the top (OTT) streaming services like
Prime video , Netflix, Disney+ Hotstar are regulated
by ministry of information and broadcasting.
 Threat of new entrants
By Vipasha Jain

❖ Switching costs
Switching cost for the product in streaming service is relatively low
which also increase the threat of substitute. Since consumer doesn’t
 Incur any determinant cost from switching between the sources of
product Netflix manage to prevent customers from ditching it service
due to high stitching cost
 Threat of new entrants
By Vipasha Jain

In conclusion the threat of new entrants is high for streaming services

and must be monitored carefully.
Rivalry among existing competitors
By G.Dinesh Reddy
 Rivalry among existing competitors
By G.Dinesh Reddy

❖ Number of competitors
Over the past few years, competition among video streaming services has increased rapidly,
and COVID-19 pandemic has supercharged this competition. There are many competitors in
this industry, all providing different types of content. One of the major one being Google’s
YouTube, which has around 2 billion users out of which 30 million are paid ones.
High number of competitors is a boon for the end consumer and a curse for someone who
wants to enter this industry without having an existing traditional broadcasting service.
 Rivalry among existing competitors
By G.Dinesh Reddy

❖ Diversity of competitors
Competitors are very diverse, some of them are traditional broadcasters, like HBO, NBC peacock,
BBC, Disney+, etc. Some of them produce their own content, like Amazon and Netflix. And finally
there are those who merely buy streaming rights.

For example, Amazon not only allows its users to watch movies and TV shows, they also provide
additional services like music streaming, fast deliveries and commercial offers for their “prime
members”.

One of the major reason behind this diversity is the quality difference among the competitors
 Rivalry among existing competitors
By G.Dinesh Reddy

❖ Switching costs
Switching cost is relatively low because, the servers on which the
content is stored are often times leased form another company. For
example Netflix uses Amazon web services for providing their own
service.
Hence in the event of closure, servers can be repurposed and streaming
rights can be sold to some other vendor.
 Rivalry among existing competitors
By G.Dinesh Reddy

❖ Industry growth
The global video streaming market size was valued at
$50.11 billion in 2020. It is expected to expand at a
compound annual growth rate (CAGR) of 21.0% from 2021
to 2028. Innovations, such as blockchain technology and
artificial intelligence, to improve video quality are
expected to boost the market growth. AI is playing an
essential role in editing, cinematography, voice-overs,
scriptwriting, and several other aspects of video
production and upload.

The COVID-19 (Coronavirus Disease) pandemic has

placed more than 1/4th of the world’s population under
lockdown. As millions of individuals stay locked into their
homes, opt for online streaming and entertainment
services. The video streaming services have experienced a
rise of around 10% in viewership during the lockdown.
Conclusion
Thank You.