Youtube Case Study

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YouTube, the Internet and the Future of Movies
Question 1:
There are several competitive forces challenging the movie industry. Film corporations are currently facing the challenges of websites offering free downloadable movie torrents along with DVD readers on computers, portable video devices, and the start up of the website YouTube in February 2005. Free online film downloads are four times more popular than legal film downloads that are paid for. This new industry is giving customers power to challenge movie store prices, customers are substituting pricey blockbuster rentals with free online downloads. This is transforming Movie rental establishments into price takers, rather than price makers. The online market is a new market for the movie industry; this is a problem because large film corporations are overcharging for their online products. They do not realize that Twenty dollars for a 24 hour movie rental is not going to appeal to customers. Another problem the movie industry is facing is that 30 to 70 percent of Hollywood derived content has been submitted to YouTube without legal consent. YouTube is profiting on movies that cost major production studios over $129 million to make. These problems are forcing film companies to enter the digital firm where business relationships are digitally enabled. They are entering agreements with online companies such as CinemaNow and Movielink, selling their products online via download. This has transformed the entire way the film industry marketed their movies. The strategic value of entering the online world is basically for mere survival of the industry. The problem of YouTube has also added complication to the creation of films. It has caused companies to resort to hiring more staff in an attempt to monitor the website. It has also forced the development of new technology such as Video ID which has been added to films in order to prevent unauthorized videos from appearing on YouTube. Question 2:

Disruptive...
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