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Why the networks can’t beat Netflix: speculations on the US OTT Services Market

Eun-A Park (Institute for Information Policy, Pennsylvania State University)

Digital Policy, Regulation and Governance

ISSN: 2398-5038

Article publication date: 9 January 2017

9642

Abstract

Purpose

This paper aims to examine the dramatically different markets for over-the-top (OTT) TV services that have emerged in the USA, and other leading markets such as Japan and Korea. Whereas OTT TV services emerged as extensions of mainstream audiovisual providers in Korea and Japan, further entrenching their dominance, they emerged in the USA as market-disrupting newcomers such as Netflix. This paper seeks to explain why, putting forward four explanations: lower resistance to disruptive innovation in public TV dominant systems; higher production costs; lower penetration of broadband-capable devices; and more expensive mobile pricing plans.

Design/methodology/approach

This comparative case study examines news and trade press articles, industry surveys and government reports to identify the reasons behind these contrasting experiences of Japan, South Korea and the USA in the deployment of OTT TV services.

Findings

To explain why events in the three countries took such dramatically different paths, four explanations were put forward, all complementing one another: lower resistance to disruptive innovation in public TV dominant systems; higher audiovisual production costs in the USA making market-disruptive moves to new technological platforms more risky; lower penetration of broadband-capable devices reducing the profit potential of new OTT-based platforms; and more expensive mobile pricing plans, making it harder for users to access OTT content.

Originality/value

The global trend in the growth of OTT TV services masks significant differences in growth trends and business initiatives at the national level. This paper aims to examine and understand why OTT TV services have shown such different patterns across countries.

Keywords

Citation

Park, E.-A. (2017), "Why the networks can’t beat Netflix: speculations on the US OTT Services Market", Digital Policy, Regulation and Governance, Vol. 19 No. 1, pp. 21-39. https://doi.org/10.1108/DPRG-08-2016-0041

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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