Analysis of the TV/Video Streaming Industry

This assignment examines the TV/video streaming industry through a PESTEL analysis. It explores the impact of political and legal factors, economic trends, social-cultural shifts, technological advancements, environmental concerns, and legal regulations on the industry's growth and development. The analysis highlights both threats and opportunities present in the macro business environment, including the potential for mergers, vertical integration, and expansion into new markets.

Running head: TV/ VIDEO STREAMING INDUSTRY
TV/ VIDEO STREAMING INDUSTRY
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TV/ VIDEO STREAMING INDUSTRY
TV/ VIDEO STREAMING INDUSTRY
INTRODUCTION
The TV/ video streaming industry coordinates the operations of studios, sets
programs that support audial visual content and facilitates over the air transmissions. The
global online television and the video market are growing rapidly. The US industry is
growing the fastest and offers such providers such as NETFLIX and NOW TV (Kovacs and
Jansen, 2015).
Advantages of macro business analysis
A macro business analysis involves the analysis of the external business
environment and it essential for it helps a business to analyse and understand the threats and
opportunities that it may encounter. These factors are beyond the control of the business and
therefore managers should be aware of the risks so as to know how to mitigate the business
risks and also to take advantage of the prevailing opportunities.
Disadvantages of macro business analysis
The macro business analysis is a time consuming process which requires
expensive resources like expertise, money to cater for the analysis process and other expenses
for example acquisition of the necessary tools. It requires a lot of research work so as to
establish the exact external issues that face business.
PESTEL analysis for the tTV/video streaming industry
The PESTEL analysis is a suitable framework that will be used to analyze and
evaluate the TV/video streaming external macro environment. The external environment is an
environment whereby a business has no control over, and the business has to either cope with
the situation or quit from the industry. The acronym PESTEL stands for political, economic,
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TV/ VIDEO STREAMING INDUSTRY
social-cultural, technological, environmental and social-cultural factors (Grünig and Kühn,
5015).
Political factors
Political factors are important for the industry for they provide the government
legislations, quality standards and licenses that are required by the industry. The anti-
monopolies and competition have set a standard maximum share of the market that the
industry can have. The industry is affected by changes in copyright laws whereby the laws
hinder the distribution of TV shows and movies. The issue of net neutrality is also affecting
the industry as internet service providers are required by the laws to treat the Internet data
equally. Also, laws concerning the personal data usage are changing affecting the individual's
ability to leverage data.
Economic factors
The income of the customers is a crucial aspect in the development of the
industry. Economic factors determine revenue, and if consumers view online streaming as a
luxury, the economy will be negatively affected. Interest rates affect the industry for example
when interest rates raise people's spending go down and when the interest rates are lowered
the people's spending rises and such changes the sponsors for the TV programs. The level of
inflation and unemployment determine the number of advertisement to be made. The foreign
exchange volatility also affects the industry's revenue.
Social-cultural factors
The industry has to meet the needs of all ages, for example, there are several
changes as people are not consuming the traditional media as they used to because of the
digital media. The electronic devices have affected the way the different markets are
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accessed. The increased rate of online piracy and lack of privacy of individual’s information
is affecting the industry.
Technological factors
The industry remains competitive by its development in technology. The
industry should ensure that it provides apps that are suitable for the new devices used by the
consumers, for example, the smartphones, tablets, and smart TVs. Development of the
internet connected devices like the TVs and mobile devices has increased the Internet
delivery of entertainment videos.
Environmental factors
The industry shifted from the use of the physical DVD;s to online streaming
which minimizes the pollution of the environment through a wasteful environment. The
industry is also affected by the high energy costs and other various resources. To compensate
for the high costs they look for alternative sources by increasing the prices for advertising,
Legal factors
The environmental rules are established so as to ensure that the industry is
liable for any environmental damage. There are set rules on the corporate social
responsibility, and the industry is obligated to protect people from any environmental harm
caused by the activities of the industry. Taxation is also an issue to be considered, and the
industry is entitled to pay high taxes. Trade regulations from foreign countries affect the TV
companies because the distribution and sale of content take place in different countries.
Government regulations will also affect the advertising price, content, and space.
Business opportunities that are present in the macro business environment
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TV/ VIDEO STREAMING INDUSTRY
Some of the business opportunities that are available in the environment can
be the formation of mergers which helps in raising the economies of scale, reduction of costs
and facilitate the improvement of the quality of broadcasting regarding the content and
services to be offered. Other opportunities will include vertical integration for example to
video rental and expansion to other countries and regions through horizontal integration
(Jurevicius, 2013).
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TV/ VIDEO STREAMING INDUSTRY
References
Grünig, R., & Kühn, R. (2015). Global Environmental Analysis. In The Strategy Planning
Process (pp. 89-96). Springer Berlin Heidelberg.
Jurevicius, O. (2013). PEST & PESTEL Analysis,". Strategic Management Insight, 13, 2013.
Kovacs, G., & Jansen, J. (2015). An Analysis of Strategies by Netflix in the Television
Market
APPENDIX I
PESTEL ANALYSIS
factors Threats or opportunities Impact
Political and
Legal
 Legal restrictions
 Market politics lead to restrictions implementation of
restrictions.
 Political advertising

Moderate
High
Low
economic  Increased economic growth
 Economic recession
High
high
Social-
cultural
 Increased growth leading to high consumerism high
technological  Fibre optics
 Advancements in technology
 New video format, internet streaming and downloading
 Increased bundle usage.
High
Moderate
High
high
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