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American Entertainment Industry: Digital Transformation Term Paper


Introduction

The advancement of technologies has affected various aspects of people’s lives, as well as different industries and associated social and economic areas. Thus, at a current stage of the technological development of the world, it is possible to speak about the digital transformation of the entertainment industry (Poniewozik). This process can be observed not only in the United States but also globally. However, the focus on the American context is important to explain basic trends related to this change (Crawford 138).

While speaking about the most significant transformations in the entertainment industry associated with changes in the digital content, as well as changes in technologies of distributing information and gaining revenues, it is important to focus on the recent competition between streaming services and broadcast television networks or systems (Irwin; Poniewozik). The purpose of this paper is to examine the aspects of the current competition between streaming companies and television networks with the focus on observed digital transformations in sharing information and to discuss what further changes can be expected in the entertainment industry with reference to the increased popularity of streaming resources.

Origins of the Competition between Television Networks and Streaming Services

Television networks are viewed today as traditional ways of broadcasting information. Still, the spread of such streaming companies and services as Netflix, Amazon, HBO Now, Hulu, and Showtime has created a new experience for viewers, and their interest in streaming channels can be discussed as constantly increasing (Jenner 258). Therefore, it is important to pay attention to discussing the origins of the developed competition between streaming companies and television networks.

The availability of such digital devices as computers, smartphones, laptops, and tablets, as well as the availability of the Internet, has created resources for developing streaming services in the 2000s (Irwin; Poniewozik; Rodriguez-Gil et al. 6). Thus, “today, viewers can watch football, drama, news and the latest cat video at will, sometimes simultaneously with their tablet or smartphones” (Montpetit). From this point, the shift of viewers’ focus from TV sets to different wireless devices and gadgets as sources to watch shows and programs became a result of a prolonged transformation in the media industry which is associated with the technological progress.

Thus, it is important to draw one’s attention to the fact that researchers identify three eras in the technological development of television in the United States: TVI (1950s-1980s), TVII (1980s-1990s), and TVIII (1990s-present) (Irwin; Jenner 258). The period of TVIII is characterized by the progress of technologies and the spread of digital distribution platforms which influence the development of the entire television market (Poniewozik).

According to Jenner, “One significant marker of TVIII is its move towards multi-platform forms of distribution and storytelling, but it has always kept some (however tenuous) link with the technology, branding and programming strategies, and social connotations television traditionally carries” (259). As a result, the connection between streaming services and television networks can be viewed as a logical consequence of developing innovative information technologies in the field (Irwin; Poniewozik). From this point, the progress of technologies allows for creating new approaches to streaming and sharing videos, without depending on television networks.

Entering and Changing the Television Market and Entertainment Industry

Such streaming companies as Netflix, Amazon, HBO Now, Hulu, and Showtime can be discussed as pioneers and leaders in the newly created market of streaming technologies which should be discussed as a segment of the television market (Jenner 258). In addition to these well-known actors of the streaming market, Apple, Google, and Microsoft are also interested in entering this field while focusing on selling TV services because of a range of opportunities to attract even more users (Nocera).

Furthermore, this sphere attracts even those companies which are not associated directly with developing alternatives to television networks. From this perspective, it is important to note that not only such giants in the sphere of streaming services as Netflix and Amazon can compete with television systems. One more category of competitors includes YouTube and Vimeo among others platforms. These services are traditionally selected by Millennials who pay less attention to television programs which seem to be oriented to the older audience (Doyle 696). As a result, the progress in the digital sphere becomes directly associated with different changes in society.

Still, it is important to focus on the fact that streaming companies are interested in spreading their services not only because of the progress of technologies. According to the researchers, the development of new platforms creates new opportunities for gaining revenues and succeeding in the market (Jenner 259). For instance, Netflix has won about 81 million subscribers during the recent years, and the company’s revenues increased from $1.2 billion in the 2000s to $6.8 billion in 2016 (Nocera).

On the contrary, during the period of 2010-2016, “cable has lost 6.7 million subscribers” (Nocera). From this point, researchers are inclined to provide a lot of evidence in order to state that the number of persons who choose to watch television or cable channels continuously decreases (Doyle 695). As a result, it is possible to state that technological companies and those companies which provide streaming services not only have entered the television market, but they also plan to conquer it while making broadcast television networks choose new digital approaches to sharing information.

As it is observed with reference to the case of Netflix, the important reason for technological companies which provide opportunities for streaming videos to enter the television market is the financial one. Moreover, the streaming services focus not only on subscription fees but also on wide possibilities which are opened for advertising while using advanced technologies and recent innovative resources (Doyle 695). For instance, Amazon and Netflix pay much attention to investing in the development of their original series which can become popular among the public in order to increase the proportion of advertisements shared with the help of these streaming services (Rodriguez-Gil et al. 22; “Streaming on Screens Near You”). As a result, streaming platforms become significant resources of revenues which can be viewed as more advantageous in comparison to such traditional sources of advertisements as television and online user-oriented ads.

Benefits of Using Streaming Services

It is still important to answer the question on why digital transformations in the entertainment industry attract customers, and why broadcast television networks need to adapt to new realities of the media market. Thus, more people choose to watch news programs and shows while using streaming services because of the absence of cable television channels (Doyle 694). Streaming services allow users to watch different shows after providing a comparably low monthly subscription fee. Consumers receive an opportunity to choose the most efficient and innovative options to watch shows and news while setting preferences, using their own convenient devices, and paying attractive fees (Rodriguez-Gil et al. 5). The only limit at this stage can be the Internet access. The absence of dependence on a linear transmission of data and schedules that are typical of television networks also contributes to influencing viewers’ choice (Rodriguez-Gil et al. 5).

From this point, more benefits of streaming services include possibilities for viewers’ control and possibilities for choosing models to follow: linear or advanced ones. Thus, it is possible to pay attention to the fact that digital transformations in delivering data resulted in increasing viewers’ control of their watching shows (Jenner 258; Rodriguez-Gil et al. 5). During the recent years, many people with the free access to the Internet received opportunities to use VCR, DVR, and VOD among other technologies in order to control their choice of programs and shows (Montpetit; Stenovec). As it is stated by the researcher interested in examining these trends, “viewers are in control, creating personal playlists while digital recorders, applications and TV web sites accommodate binge-watching” (Montpetit). All these aspects demonstrate advantages of streaming services in comparison to traditional television networks and their proposed options.

Furthermore, it is necessary to refer to the fact that streaming services are focused on developing different release models in order to address viewers’ needs and expectations. Currently, streaming companies release original series and shows using various models: while providing access to a full season or while releasing episodes weekly (Crawford 138). These approaches often combined with the remote control provide more choices for viewers, and they are discussed as benefits of using streaming services (Rodriguez-Gil et al. 14). In order to address these changes in the sphere of broadcasting information, television companies also focus on using innovative approaches to presenting their programs. As a result, television companies plan to increase the attractiveness of their services with the focus on different target groups and their specific needs (“Streaming on Screens Near You”).

Predicted Changes in the Entertainment Industry while Focusing on Television

From this point, it is possible to state that some further changes can be expected in the entertainment industry as the reaction of television networks and systems to current trends in the field. Thus, “all TV will move to the Internet, and linear TV will cease to be relevant over the next 20 years, like fixed-line telephones” (Nocera). Furthermore, according to the experts in the sphere of media, “it seems as if a new streaming service comes out every few weeks” (Stenovec). From this perspective, it is possible to predict the further development of the market according the latest tendencies in the field. Different television companies will focus on addressing current changes and digitization of the market with the help of using the multi-platform concept (“Streaming on Screens Near You”). More networks will choose to broadcast information using online channels in order to present the audiovisual material in the most appropriate manner for potential viewers who choose using the Internet instead of cables.

The example of the streaming business will potentially attract television companies and make them change their regular models of operations with the focus on adapting the innovative technologies. Therefore, “these streaming services will make it so TV will no longer be limited by geographical boundaries” (Stenovec). The use of HTTP, HTML, and TCP/IP protocols, as well as other approaches to streaming the information, can be viewed as prevalent in five or ten years because of the availability of online technologies which are discussed by many experts as more advantageous than traditional cable networks which are rather limited in terms of location (Rodriguez-Gil et al. 12). Thus, television companies can choose to unite their traditional approaches to sharing data and innovative digital methods of exchanging the content.

Nevertheless, in spite of obvious benefits of streaming services which are accentuated by supporters of this technological progress in the sphere of distributing information, there are also some disadvantages associated with using streaming resources. For instance, “live online streaming services are just not as reliable as cable or satellite,” and moreover, “streaming services can’t compete when it comes to live sports” (Stenovec). In addition, there are also legal and ethical issues related to the topic. The problem is that entertainment and streaming companies are only developing protocols to protect the rights of the providers of information and their subscribers (Crawford 139; “Streaming on Screens Near You”). As a result, risks of copyright violations are high. The number of illegal downloads regularly increases, and this aspect needs to be addressed by streaming companies in order to protect their intellectual property.

One more issue is the absence of standardization in the sphere of streaming technologies in order to provide television companies with resources to develop their online streaming channels (Crawford 138; Rodriguez-Gil et al. 4). Furthermore, it is important to draw one’s attention to the fact that broadcast television companies have not lost their positions regarding ratings associated with releasing episodes (“Streaming on Screens Near You”). However, viewers continue to discuss the levels of their control in relation to TV as limited in contrast to options proposed by online platforms and streaming services. Therefore, in spite of the fact that it is possible to predict significant changes in the sphere of television in five or ten years, it is important to address a range of issues at a current stage.

Conclusion

Today, broadcast television networks seem to compete with new entrants in the entertainment industry, which include such streaming companies and services as Netflix, Amazon, Showtime, Hulu, and HBO Now. However, in spite of the developed competition, it is possible to predict that television networks will also choose the path of streaming services in the near future because of obvious advantages of using the Internet for the data distribution. Furthermore, the digital transformation of the market and industry can also lead to the development of a unique platform which will combine benefits of both television networks and streaming resources in order to address viewers’ needs and provide the high-quality content in the most efficient and attractive manner. In this context, it is possible to expect that television companies will focus on changing their linear models of releasing shows and series in order to respond to the recent changes in the industry. Still, in spite of the observed changes and tendencies, it is possible to expect that the process of shifting from television to more advanced platforms will be rather prolonged because of the impossibility to develop more innovative digital resources for completing this task.

Works Cited

Crawford, John E. “Cutting the Cord—A Marketing Case: An Examination of Changing TV Viewership.” Atlantic Marketing Journal, vol. 5, no. 2, 2016, pp. 137-150.

Doyle, Gillian. “Resistance of Channels: Television Distribution in the Multiplatform Era.” Telematics and Informatics, vol. 33, no. 2, 2016, pp. 693-702.

Irwin, Neil. “.” The New York Times. 2014.

Jenner, Mareike. “Is This TVIV? On Netflix, TVIII and Binge-Watching.” New Media & Society, vol. 18, no. 2, 2016, pp. 257-273.

Montpetit, Marie-José. “.” The Guardian. 2014.

Nocera, Joe. “The New York Times. 2016.

Poniewozik, James. “.” The New York Times. 2015.

Rodriguez-Gil, Luis, et al. “Interactive Live-Streaming Technologies and Approaches for Web-Based Applications.” Multimedia Tools and Applications, vol. 2, no. 1, 2017, pp. 1-32.

Stenovec, Tim. “.” Business Insider, 2015.

.” The Economist, 2016.

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IvyPanda. "American Entertainment Industry: Digital Transformation." September 6, 2020. https://ivypanda.com/essays/american-entertainment-industry-digital-transformation/.

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IvyPanda. 2020. "American Entertainment Industry: Digital Transformation." September 6, 2020. https://ivypanda.com/essays/american-entertainment-industry-digital-transformation/.

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IvyPanda. (2020) 'American Entertainment Industry: Digital Transformation'. 6 September.

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