Understanding Economics Through Streaming Services

The way the streaming industry works might seem novel but the basics are just as same as any other market.

Once there was a time when all the channels on the TV were just not enough. Those were the times you had to hope for reruns and keep a track of the right time to catch up on your favorite shows and movies. Enter streaming services and their on-demand content, no one needs to wait anymore and the binging phenomenon only keeps getting bigger every day.

This is also the reason that choosing the best streaming service has become a tough task. Fortunately, there are platforms like Streaming Wars that let you compare varied streaming services while also providing you with amazing discounts.

Market Dependencies

It is an undeniable fact that without the possibility of fast and cheap internet, streaming services wouldn’t be what they are today. The Internet can be compared to the railroads that made transportation possible and brought several markets together.

The Internet provides the essential connection required to bring consumers and content creators together and streaming services build their business on top of this connection. The larger the market, the easier it is for a business to thrive.

Transactions

Does anyone still remember that Netflix used to send out rental DVDs via mail? While those types of services still do exist to an extent, the way the internet has allowed for safer and reliable money transactions has reshaped the entire entertainment industry.

People tend to opt for services that offer convenient transactions that are reliable and secure. Digital transactions have made it much more convenient to make orders, subscriptions, and cancelations such that it has become the norm now. Transactions costs are also much lower than ever, making it easy for both buyers and sellers to come together in a market.

The same concept applies to industries like phone consultations and on-call customer services which are outsourced to countries like India, owing to the lower costs and cheap labor.  The movement of labor-intensive manufacturing industries towards countries like China where you get abundant cheap labor is also made possible because the costs involved in shipping and communications have considerably lowered down in the past decade.

Monopolies

Some markets tend to eventually become a monopoly. In the case of streaming services, large companies like Netflix and Disney will continue to grow as people would prefer to subscribe to services that can provide high-quality content at a low cost.  The one who manages to out win the race could emerge as a monopoly. Apart from this content creators/freelancers have also started streaming on various platforms with tools such as OBS Streaming etc. by hosting it on a cloud desktop to stream without any interruptions.

Monopolies are considered bad for a market as when a large company grows even bigger, it may merge up with its competitors and make any sort of choice vanish. This could lead to exorbitant pricing and a drop in the quality of products. In some cases, governments intervene before a monopoly could arise and might nationalize the monopoly as is the case in industries like electricity and trash collection.

Luckily, that kind of government intervention is so far not considered for streaming services. In a way, free market and competition allow for service providers to come up with creative ways to keep satisfying and enlarging their consumer base. This can be very clearly observed in the streaming industry. We can watch whatever we want whenever we want and contribute to the growth of the entertainment industry thanks to streaming services and their current business model.

Good competition amongst the service providers and consumer interest has been leading to an amazing amount of quality content which should possibly continue for the good of everyone involved.