Youtube and porter 5 forces PDF

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Introduction to YouTube YouTube is an American video-sharing platform headquartered in San Bruno, California. Three former PayPal employees—Chad Hurley, Steve Chen, and Jawed Karim—created the service in February 2005. Google bought the site in November 2006 for US$1.65 billion; YouTube now operates as one of Google's subsidiaries. YouTube allows users to upload, view, rate, share, add to playlists, report, comment on videos, and subscribe to other users. It offers a wide variety of user-generated and corporate media videos. Available content includes video clips, TV show clips, music videos, short and documentary films, audio recordings, movie trailers, live streams, and other content such as video blogging, short original videos, and educational videos. Most content on YouTube is uploaded by individuals, but media corporations including CBS, the BBC, Vevo, and Hulu offer some of their material via YouTube as part of the YouTube partnership program. Unregistered users can only watch videos on the site, while registered users are permitted to upload an unlimited number of videos and add comments to videos. Videos deemed potentially inappropriate are available only to registered users affirming themselves to be at least 18 years old. YouTube and selected creators earn advertising revenue from Google AdSense, a program which targets ads according to site content and audience. The vast majority of its videos are free to view, but there are exceptions, including subscription-based premium channels, film rentals, as well as YouTube Music and YouTube Premium, subscription services respectively offering premium and ad-free music streaming, and ad-free access to all content, including exclusive content commissioned from notable personalities. As of February 2017, there were more than 400 hours of content uploaded to YouTube each minute, and one billion hours of content being watched on YouTube every day. As of August 2018, the website is ranked as the second-most popular site in the world, according to Alexa Internet, just behind Google. As of May 2019, more than 500 hours of video content are uploaded to YouTube every minute. Based on reported quarterly advertising revenue, YouTube is estimated to have US$15 billion in annual revenues. YouTube has faced criticism over aspects of its operations, including its handling of copyrighted content contained within uploaded videos, its recommendation algorithms

perpetuating videos that promote conspiracy theories and falsehoods, hosting videos ostensibly targeting children but containing violent and/or sexually suggestive content involving popular characters, videos of minors attracting pedophilic activities in their comment sections, and fluctuating policies on the types of content that is eligible to be monetized with advertising. Porter’s Five Forces Model of Video Sharing Industry: YouTube hosts a thousand of short films, television episodes and hundreds of full-length movies. It has a massive collection of user- generated content which keeps on growing. It keeps people globally connected and provides them with ways of generating income. With the network so large, YouTube bears a larger responsibility of providing the right content. Competition in the Industry Within the industry, YouTube has many like Vevo, Vimeo, YouKu Inc., Dwango Co. Ltd. But so far it has managed to keep the largest number of clientele than all of these combined. Vimeo has 100 million views per day and provides with quality entertainment however its free package let you see a limited number of videos unless you buy a premium account. YouTube has an advantage of being freely accessible to its uses. (Votta, 2014) Another rival is Dailymotion which is based in Paris and started around the same your as YouTube. However due to lack of its originality, it has not been able to raise its status from being an alternative option to being the only option. (Votta, 2014) Potential of New Entrants in the Industry YouTube has established itself as a largest video hosting engine in a very short period of time. However, the technology, of hosting videos has become so common on the internet that the barriers to entry in the market are quite low. Moreover, due to the lack of restrictions on the type of posted content, some governments put a ban on YouTube for hosting offensive material which makes the company lose its business. It makes the existing rivals strong in that particular region and provides an open field for new potential competitors. However, due to the existence of proxy websites. Youtube manages to penetrate the bans. So the threat of new rivals in the market is low.

Power of Supplier Since google has bought YouTube, it has become its only supplier. YouTube makes use of the Google’s technologies from different companies to provide its best to the users. It uses TureView for video advertisements which let views skip ads after five seconds. It utilizes Google huge databases to manage the data uploaded by its users. It is highly scalable, to better operate with its high traffic, YouTube uses LIGHTTPD which enhances the high performance for such hosts. Similarly, it depends on other software to function best. However these suppliers depend on YouTube much more for their products to be utilized through a mostly visited hub of videos. (Waleed, 2016) Bargaining Power of Buyer YouTube provides the users with easier access to vast information and platform to engage in social activities. So the power of the buyers is less. However, YouTube has a deeper market penetration and most of its content is posted by its consumers. So the power resting in the hands of its consumers is moderate. (Waleed, 2016) Threat of Substitute Products or Services Being a host of the channels, YouTube competes with the age old electronic devices like televisions with a disadvantage of having too many advertisements. YouTube earns it ravens through advertisements too but it is not at the expense of patience of its consumers. Also the TV doesn’t nearly have enough genres of videos as the website and furthermore the access to such large library is free of cost. So, YouTube is facing almost no threat from its substitutes. (Waleed, 2016)

SOWT analysis of Netflix’s: Strengths (Core Competencies/Competitive Advantages): One of Netflix Inc.’s major strengths is its high brand equity, which is the business benefit and value associated with the company’s brand, relative to competitors. In this SWOT analysis case, the brand enables the movie streaming company to maintain its popularity and ability to penetrate its current markets. In addition, its large platform of content producers and consumers is a strength that allows Netflix to maximize its operational effectiveness, service

attractiveness, and business growth. For example, as the platform’s entertainment content creators increase, the service attracts a larger population of consumers, which in turn attract more producers. This kind of business strength is also seen in other platform-type businesses, such as Spotify Technology and its on-demand music streaming operations. Another of Netflix’s strengths is its capacity for original content creation. This means that the company earns from its original movies and shows, in addition to earnings from streaming operations. The strengths assessed in this SWOT analysis are among the core competencies identifiable through a VRIO/VRIN analysis and value chain analysis of Netflix Inc. The company’s value proposition is achieved by using these strengths in the online streaming value chain. Netflix’s corporate culture also affects how these internal factors influence business performance in content creation and technological innovation, via human resource capabilities. 1. High brand equity of Netflix 2. Large platform of content producers and consumer 3. Capacity for original content creation Weaknesses. Netflix Inc. has an imitable business model, which is an internal strategic factor that weakens the business. For example, competitors can copy the same business model to create a platform for on-demand online media streaming. Dependence on content producers is another weakness examined in this SWOT analysis of Netflix Inc. This internal factor makes the company vulnerable to the effects of producers’ strategies. Moreover, the business depends on Internet service providers (ISPs) that determine customers’ connectivity speed, which is a critical factor influencing customer satisfaction in Netflix’s service. With these internal strategic factors, this SWOT analysis reflects the strategic challenge of making the company less vulnerable, given these weaknesses. 1. Imitable business model 2. Dependence on content producers 3. Dependence on Internet service providers Opportunities Netflix’s opportunities include growth through product mix expansion. For example, the company can develop new types of entertainment content that can be accessed through its

website or mobile apps. Considering the other factors in this SWOT analysis, such an external strategic factor is directly related to Netflix Inc.’s generic strategy for competitive advantage, intensive strategies for growth, and business model. Penetration of new markets is another opportunity in this SWOT analysis, especially because of the on-demand streaming company’s lack of significant presence in countries like China. Netflix’s marketing mix or 4P affects how such market penetration is achieved. Furthermore, the online business has the opportunity to diversity, such as by acquiring a complementary firm that could improve overall strategic positioning and success. In the SWOT analysis framework, this external factor is based on market conditions as well as organizational capacity to diversify, thereby requiring Netflix’s corporate structure’s adequacy and support. 1. Growth through expansion of product mix 2. Penetration in new markets 3. Business diversification into other industries or markets Threats Competitors and related business imitation are a strong threat, as can be determined through a Porter’s Five Forces analysis of Netflix Inc. Competition is an external strategic factor that, in this SWOT analysis, is an obstacle toward maximizing the company’s revenues and profitability in the online streaming industry. In addition, piracy threatens Netflix by allowing customers to consume pirated content instead of the ones available through the company’s service. In the SWOT analysis model, this external factor intensifies competition for customers’ viewing time. Moreover, considering the resource-based view, cybercrime is a threat based on the information technologies that Netflix uses. Proprietary and sensitive customer information may be compromised as a result of this external strategic factor in the online streaming industry environment. This SWOT framework application highlights cybercrime, which is a technological trend that shapes the industry, as can be assessed through a PESTEL analysis of Netflix Inc. 1. Competition and imitation 2. Entertainment media/content piracy 3. Cybercrime

Recommendations international business: Ten years after its launch, YouTube has become a household name for online video but faces an array of rivals in the market and lingering questions about its business model. The first video uploaded April 23, 2005 -- an 18-second clip of co-founder Jawed Karim at the San Diego Zoo -- offered little indication the service would become the leader in Internet video and a key part of the Google empire. A decade later, YouTube has more than one billion users, with localized service in 75 countries and 61 languages. Some 300 hours of video are uploaded to YouTube every minute, and "every-day people watch hundreds of millions of hours on YouTube and generate billions of views," according to the YouTube statistics page. Google is reserving its 10-year anniversary celebration for May 10, marking the day the site went public, a spokesman told AFP. But analysts and others were talking about the milestone. "Everyone in the world knows YouTube, even my mom," said Dan Rayburn, analyst at Frost and Sullivan who also writes a blog about streaming media. YouTube played a key role in the Arab Spring uprisings and other political movements. It has faced bans in some countries, notably for the distribution of a film about Muhammad which offended some Muslims, and has faced criticism for being used to distribute unauthorized copyrighted content. Rayburn said that even though YouTube is immensely popular around the world, it is not clear if it has a real business model. Google bought YouTube in 2006 for some $1.6 billion in stock -- raising eyebrows about what was then the Internet firm's biggest acquisition -- and now generates considerable revenue, but also has high costs. "Even today, Google will not say if YouTube is profitable," Rayburn noted. "But 90 percent of analysts say it is not profitable." Rayburn said that even though YouTube popularized the idea of online video, the videos are mainly "user generated content" that does not attract revenue from users or advertisers. "To stream premium content like films and television programs, people go to Netflix or Hulu or iTunes," he said. "YouTube has struggled to find its core business. The vast amount of content on it cannot be monetized." But a report by Morgan Stanley analyst Benjamin Swinburne earlier this year said YouTube is "a high-growth, valuable asset" for Google with tremendous potential. The report said YouTube generated some $4.7 billion in revenue in 2018, and that it can do even better by investing in premium content -- such as the paid video channels it recently unveiled and other

kinds of subscriptions. "Given Google's hefty resources, we have been surprised it has not been willing to invest more directly in premium content," the report said. The research firm Trefis says in a recent report that YouTube represents about three percent of the value of Google but that its importance is growing. "As the explosive growth in online video ads spending continues, YouTube will be able to leverage its popularity to buoy Google's revenue going forward," Trefis said. YouTube may be the most recognized name in online video, but it is being challenged on all fronts: Amazon, Hulu and Netflix and Time Warner's HBO for "premium" paid content, and services such as Facebook for free uploads of user videos.

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