Macroenvironment
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AAADisneyPlay_Chp1-RoughDraft.docxDisney Play Marketing Audit
Chapter 1
Macroenvironment
(Rough Draft)
A. Industry
Once launched, Disney Play will compete in the entertainment industry. Direct competitors will be other streaming services but Disney Play will also face competition from other outlets of entertainment. The entertainment industry is experiencing a massive change with the introduction of streaming services and rapidly changing technology. Comment by Edwin Stafford: Explain what Disney Play will be – a streaming service. But will it include video games? Make sure you offer a comprehensive overview of the service and THEN talk about how it is part of the broader entertainment industry.
B. Demographic Trends
There are X number of important demographic issues facing the video streaming and broader entertainment industry. They include (1) Millennials and their demand for mobile entertainment; (2)… etc. Comment by Edwin Stafford: Need a mapping paragraph to introduce section.
Millennials: Millennials and Generation Y are leading the change within the entertainment industry. Millennials seek out entertainment online unlike any generation before. They prefer providers that give them what they want when they want it.
Millennials are an active audience, not a captive audience. They prioritize value and are unafraid to switch to competitors if the quality is considered insufficient. However, they can be extremely brand loyal. This is especially true of brands that reflect their values and communicate it. Comment by Edwin Stafford: Don’t forget to cite your sources!
In regards to television streaming, millennials know what they want and they will search it out. They are more likely to search for specific shows than to browse for new ones. Millennials want providers that are up-to-date, have viewing quality, and are fast. Less important is personalization and built-in guidance to show them how to use the product. Instead they are more interested in features that impact the quality of the TV experience, like better HD or device shifting (usability across multiple devices). Millennials will likely give up on a program if it is delivered in poor quality.
Cost isn’t an important factor when millennials make decisions. Quality and brand loyalty is more important.
https://www-statista-com.dist.lib.usu.edu/study/26713/entertainment-and-media-usage-among-us-millennials/
Non-Millennials : In contrast, non-millennials are slower to adapt to the changes in entertainment, though they are adapting. Generation X, Baby Boomers, and Retirees are all adopting streaming services while many continue to hold onto older services. While Millennials have largely moved on from live TV, many non-millennials continue their subscriptions. Comment by Edwin Stafford: Is it possible to break this down by Gen z, Gen X and Baby Boomers?
In television streaming Non-Millennials are invested in big name providers, particularly Netflix and Amazon Prime. They are less likely to invest in smaller streaming services, such as HBO GO or ShowTime. Age doesn’t seem to be a factor when it comes to paying for a subscription service, but Non-Millennials want different features out of their streaming services. Non-Millennials are more interested in features that make the TV experience simpler and easier to use. Cost is more likely to be a factor in their decision making.
International Markets: Entertainment trends are largely similar outside of the United States, people are moving to streaming for their music and television. Large American companies are broadening their services into Europe, Asia, and Latin America and are enjoying success in doing so. However, their libraries are often limited. They typically do not offer the amount of programs worldwide that they offer within the USA. As a result, American audiences are more likely to make the switch.
Customers in Europe have less impulse to adopt television streaming. Many viewers prefer their local content because it is often better tailored to their interests and needs. Language diversity is a significant factor for this. Local content will be presented in the native tongue and tailored to the local demographic whereas worldwide streaming typically is not.
Television in continental Europe is typically free, paid completely by TV advertising. In France for example, the number of free channels has risen to 26% in 2016 from 6% in 2005. The channels are very diverse, with some catering to a specific audience. As a result, there is less pressure for users to switch to online streaming that doesn’t tailor to them.
Markets in Latin America face a different challenge. Internet infrastructure is poor in many areas of Latin America which makes at home streaming impossible or very expensive. Less than 40% of Brazilian households have access to broadband internet. While infrastructure is improving the change is slow.
In China there is a lack of willingness to pay for digital media content. China is pushing for entertainment innovation but largely with its own companies which are cheaper and easier for their people to access. China already has separate social media services than the rest of the world. Other markets like Japan, Singapore, and South Korea are more favorable for American streaming expansion.
Some good info here. I would like to see it better organized and more comprehensive by demographic groups – Hispanics? Aging Baby boomers? Etc.
https://www.senioradvisor.com/blog/2015/07/baby-boomers-facts/
https://www.marketingcharts.com/featured-51119
What about types of entertainment? Sports?
https://www.sportsbusinessdaily.com/Journal/Issues/2017/09/18/Opinion/Singer.aspx
These links should get you started. However, what it needs here is a more comprehensive overview of entertainment viewing habits of various demographic groups. The links above should help you fill out this section.
C. Economic trends in the industry
Mapping paragraph?
1. Employment: The employment rate will increase since there will be a creation of new opportunities when Disney becomes fully independent. It will have to hire its own employees and workers who will be assisting in managing the industry. When people get jobs, especially new jobs, it's, therefore, a boost to the economy as the number of taxpayers will increase, and this means that the taxes raised will be high. It will be growing the industry where there may be future investments thus leading the industry to be more marketable. This poses an opportunity for the organization.
Interest rates: When the interest rates are increased, then the profits will also increase, as this is adjusted by setting reasonable prices of products and services. When the prices of services are increased, then more revenue will be generated, and the organization will be able to raise funds to increase the wages for its workers. The registered profits will also be huge and will help in developing the organization. This brings a very big change and makes the organization stronger and able to muscle with rivals in the market. This also boosts the industry where the organization lies. So, it’s also a being step to promote the industry which is a very big boost to the economy of a nation.
Slow recovery from the Great Recession: This impact both the organizational and the industry negatively as this brings slow growth even to the economy. Also, the circulation of money will be very slowly such that the organization's target and goals cannot be achieved in time. So, all plans may fail to work out as there may be high taxation and the revenue raised be very low such that the organization may not be able to raise enough funds for development and paying employees. This is the biggest threat to the industry. So, the impact of this trend is negative.
2. They have avoided direct competition and have focused on the quality of the services and lowering the volume of movies and shows by pricing.
Good info here again, but you want to tie it more directly to how the economy is impacting streaming and/or how the economy is being impacted by the growing streaming market.
https://smartasset.com/personal-finance/the-economics-of-video-streaming-services
D. Environmental/Natural Resource issues facing the industry
Again, you want a mapping paragraph to introduce your section:
“There are X number of important environmental and natural resource issues facing the streaming and entertainment industry. They are (1) …etc.”
Climate change is the biggest natural resource in this industry. When the climate is good, the services of the industry are quite good. The climate can change from better to goo and sometimes can be the vice versa. Climate change can be either a threat or an opportunity for this industry. Since it’s a streaming service where customers have to subscribe, then the climate can be conducive, and the even good network can help reach more subscribers who can enjoy this service. This facilitates the growth of an organization. When the climate changes to worst, then the signals or frequencies might be cut or very weak. Consumers may not risks subscribing to these services, and this is a big threat to the organizations. Comment by Edwin Stafford: Ooooh!
Other organizations are building strong networks for the efficiency of services.
This section is terrible… there are several key environmental issues facing the streaming entertainment industry. They include e-waste (all the gadgets we use to watch streaming) and the emissions from computer farms that house the “cloud” of films. There’s also the impacts of film production.
E. Science/Technology trends in the industry
1. The control of TV stations and streaming services for adults and children. This help to reach more subscribers and every group at their convenience. No new technologies yet.
2. They are taking measures to ensure the existing technologies do not fail and always remain reliable as they get to wait for new advancements in technology. Comment by Edwin Stafford: This needs work… can’t really comment on this as there’s nothing here for me to really review.
Here are a couple of articles to get you started on working on this.
3 CX Innovations You Can Expect from Streaming Services in 2018
https://smartercx.com/3-cx-innovations-can-expect-streaming-services-2018/
1. Cached
Feb 2, 2018 - With millions of subscribers across the world, streaming companies have started to make CX innovations and optimizations for end users.
Netflix: the rise of a new online streaming platform universe – Digital ...
https://digit.hbs.org/.../netflix-the-rise-of-a-new-online-streaming-platform-universe/
1. Cached
Mar 4, 2018 - Netflix is on-demand video streaming platform, that connects video content ... https://www.business2community.com/business-innovation/ ...
F. Political/Regulatory issues facing the industry
Need to start with a mapping paragraph.
1. Pre-existing Regulations: There are very few American regulations on streaming services because it is fairly new technology, and society seems unsure of how to regulate it at this time. The lack of regulation leaves a massive amount of opportunity for Disney Play. Despite the flexibility in America, international regulations tend vary from country to country causing a potential for obstacles. America’s current political climate under the Trump Administration, that has included travel bans and rocky foreign relationships, is likely to force Disney Play to get creative with their global outreach.
Few American regulations have put streaming platforms as kings in the entertainment industry, and we saw this in the 2018 Emmy Awards when Netflix had the most nominations of the night, and the winner for “Outstanding Comedy Series” went to Amazon Prime’s original series “The Marvelous Mrs. Maisel.” Consumers are leaving traditional television services for more affordable and unpredictable platforms such as Netflix, Hulu, Amazon Prime, etc. with Disney Play predicted to become a competitor in 2019.
Opportunities: Disney’s recent $71-billion-dollar deal in the purchasing of Fox Network has given Disney an opportunity for expansion. “Disney alone, will soon offer three stand-alone streaming apps: ESPN+, Hulu, and Disney Play. Disney Play will feature Disney, Pixar, Marvel, Lucasfilm, ABC content, as well as Fox brands and creative assets such as Searchlight, FX, and National Geographic.” This is only a small segment of what Disney owns and could apply in Disney Play, and with little regulation it would be a simple task for Disney to slowly keep collecting portions of the entertainment industry eventually monopolizing the market against few competitors. In addition, this un-regulated control gives Disney and consumers room to bundle and pick-and-choose from what they want - which other services do not currently offer.
Regulations tend to have a negative and binding connotation, but some international regulations put Disney’s wholesome personality in an advantageous position against competitors. For example, in India the “health ministry has written to issue an advisory to online movie and TV streaming firms in 2017 to comply with anti-tobacco rules and display messages and warnings in scenes showing tobacco products or their use.” Disney has a lasting reputation of high morals and behaviors in their content, possibly giving Disney Play more freedom in the India market.
Opportunities based on morals are also available in China with regulations regarding a “prohibition of six types of online content including content containing violence, cruelty, or vulgarity, and content which "infringes others' legitimate interests.” Leaving Disney a gap that competition can’t fill.
Threats: China does offer content opportunities, however, the country also contains several media regulations that are more technical. Per usual, China requires “Streaming Services Providers to obtain a permit from provincial cultural affairs bureaus and display their license number in a prominent place on the website.” This regulation makes sharing complicated and slow apply. Complications rob Disney Play of a heavily populated part of the globe if China were to decide not approve the service, or if Disney Play had to eliminate itself by not being able to employ China regulations.
Ms Gabriela Kennedy and Xiaoyan Zhang. China Tightens Control Over Its Growing Online Streaming Industry By Introducing New Regulations. Mondaq, January 3, 2017 Tuesday. https://advance-lexis-com.dist.lib.usu.edu/api/document?collection=news&id=urn:contentItem:5MJ8-B451-JCMN-Y0YW-00000-00&context=1516831. Accessed October 9, 2018.
Surprisingly, the United Kingdom has started to turn regulations into threats because they aren’t fond of the competition that American companies have on British content.
“The BBC's director general, Tony Hall, will call for tougher measures against video streaming platforms such as Netflix Inc., as regulators face pressure to level the playing field between streamers and traditional broadcasters. Hall is expected to discuss competition rules, advertising, taxation, content regulation and terms of trade as they apply to U.K. companies versus streaming giants at the Royal Television Society's London conference.”
BBC revealed frightening facts that “funding for its U.K. services had fallen 18% in real terms since 2010 as a result of British public service cuts, and that it was losing younger viewers to platforms such as YouTube.” The U.K. is fighting back through regulation because the funding for traditional television is being lessened. This BBC statistic is dangerous to Disney Play’s implementation in the U.K. because Disney Play’s target audience is children, therefore, stealing even more of the “younger crowd” that is already ditching traditional television.
2. The European Parliament's Education and Culture Committee will be meeting with several American technology companies in the future to discuss regulations on the “creative content, fake news and disinformation, digital skills and the impact of technology on young people and education.” Disney Play is not part of this conversation yet, but once established, the added competition of the service may not be appealing to European segments unless Disney Play can present itself as a benefit and not a menace.
Vinjeru Mkandawire. The Week Ahead Europe: UK broadcaster to call for tougher regulation of Netflix. SNL Kagan Media & Communications Report, September 18, 2018 Tuesday. https://advance-lexis-com.dist.lib.usu.edu/api/document?collection=news&id=urn:contentItem:5T9F-XV01-F19Y-C1H7-00000-00&context=1516831. Accessed October 9, 2018.
Net neutrality is the biggest issue facing streaming services. California is now battling the Trump Administration on it, given that California’s tech companies are destined to be hurt by Trump’s overturning of Obama’s policy.
G. Cultural/Social trends in the industry
1. Consumers are looking for entertainment in the easiest way possible. They avoid ads of any kind and often employ ad blockers in order to streamline their entertainment consumption. The use of streaming services feeds that trend as most of the current streaming companies (such as Netflix) offer ad free or minimal ad watching. This allows customers to avoid hundreds of hours of advertising, and thus is in high demand compared to conventional television.
2. Disney has recently been releasing a large amount of movies, sometimes with multiple in one year between Marvel and Star Wars. They have seen a definite reduction in sales revenue from these movies, particularly in the Star Wars franchise. This implies that fans are “tired” or inundated with Star Wars content, and need a rest from the franchise.
3. Disney has also received some pressure to make their movies more culturally sensitive, as shown by their initial response to a trailer for a Wreck-It Ralph sequel. In this an African-American princess was depicted with lighter skin as well as a smaller nose and other facial features not correlative with her original animation. The response from viewers was immediate for them to change her features and skin color back.
Conclusion: Not completed until latet, due to frequent changes and updates.
I’m going to be very candid. This is the worst draft of all that I’ve read so far. My sense is that you’ve not invested significant time in researching or formatting the paper, but you still have time. The course is going to move very quickly as we’re now covering material for chapter two, and this will take some time to whip into shape. My main points are:
1. You need to do more research on the hot issues facing streaming entertainment. Issues like net neutrality are in the news every day, but you don’t mention it. We’ve talked about the energy of the “cloud” and e-waste, and yet, you don’t even mention those issues. In short, you have significant research to do.
2. Need to write in a way that makes your paper easy to read – use mapping paragraphs to organize each section. I’m attached a handout on it
3. Need to use a more formal writing tone. Too much of your writing is “loose” or casual that won’t work for formal business writing. You want your paper to read like IBIS World. That is the format that sophisticated business people expect in business reports.
I’m sorry to say that I can’t really give you more detailed feedback because your draft is so underdeveloped. If you want, you can rework this, and then I can review to give you the level of feedback that I’ve given other teams.
20/20
