Case Study:

YouTube, the Internet, and the Future of Movies

Question 1

The movie market was deal with with competitive forces that made the industry unsightly. The danger of substitutes was extremely high. This is because the improved levels of high speed Internet made downloading easier and quicker, which built pirating films easier. This kind of increased the threat of substitutes because consumers had been no longer ordering movies, the consumers did start to download films and television shows free of charge. Because option was available fewer consumers paid out to watch films, which helped in the fall of the motion picture industry. The strength of the buyer was high and the power of the seller was low. Because substitutes were available the buyer offers all the electrical power and choice where to observe their videos. They may choose either to shell out or to download movies illegitimately. These competitive forces that was confronted cause a decrease in the video industry. To be able to survive, the movie studios made agreements with sites such as CinemaNow and Movielink to sell movie downloads online. Studios such as Warner Brother built agreements with Guba. com and BitTorrent video downloading sites. The achievements of ITunes showed studios that consumers had been willing to pay to get legal digital downloads.

Problem 2

In such a case, disruptive technology had a superb impact on firms. Disruptive technology is new technology that suddenly displaces an existing technology. DVDs, paid television and video shows were the set up technology, it was how the businesses mentioned built their money. Since downloading films and tv shows became more widespread and simpler to do, these companies were at risk because their very own old technology was substituted by free online movie downloads. Because of the difference in technology, these businesses had to develop a strategic prepare in order to survive. This brought on companies to alter from aged technology and adapt to the brand new technology.

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