Porters Five Forces to international streaming market

This document provides an analysis of Porters Five Forces model in the international streaming market, including industry rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers.

International Business
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Contents
Introduction......................................................................................................................................2
Porters Five Forces to international streaming market....................................................................3
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Introduction
Porter’s five forces model can be described as a tool for analysis for comprehending how an
industry like international streaming market gets affected by the five key competitive forces
depicted in the figure below.
(Source: mindtools.com)
Porters Five Forces - international streaming market- Malaysia
Industry Rivalry
-There is acute rivalry amidst the established global players like Netflix, Hulu, Sling Tv, HBO
Now, Amazon prime etc. and Malaysian based players like iflix, Viu, tonton etc.
-The presence of many firms has made the industry very competitive.1
1Evans., N. D (2015). Managing Innovation and Disruptive Technology. CIO. Available:
https://www.cio.com/article/2976572/digital-disruption-from-the-perspective-of-porters-five-forces-framework.html
Accessed on 25/3/2019
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- By 2023, international streaming market 2is expected to grow at approximately USD 82 Billion,
at 17% of CAGR between 2017 and 2023 thus, increasing rivalry.
-Availability of variety of methods for customers such as in-store rental, online selection and
mail delivery, Kiosk rental, or Video on Demand for live streaming their favourite dramas and
videos has increased rivalry.
-Factors like low switching costs, lower level of product differentiation and accessibility to
similar products in various locations are also leading to cut-throat competition3
-Key industry players have large levels of capital besides attaining the economies of scale.
-High force
Threat of new entrants
-The threat of new potential entrants is comparatively low. This is because of higher cost or
capital demand resulted from stockpiling the requisite products.
-The well-established branding and image of the key industry players also create complications
for new entrants into a market.
-For gaining a foot hold in the market a new entrant will have to invest huge amount of funds on
marketing and advertising in order to become competitive.
-Moderately low force
2 Netflix. (2017). Annual Reports & Proxies. Available:
https://www.netflixinvestor.com/financials/annual-reports-and-proxies/default.aspx Accessed on
26/3/2019
3Martin., M (2018). Porter’s five forces: Analysing the competition. Business News Daily.
Available: https://www.businessnewsdaily.com/5446-porters-five-forces.htmlAccessed on
25/3/2019
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Threat of Substitutes
-The threat of substitute products is higher and it is essential for keeping the costs low for being
competitive.
- There is availability of a wide number of substitute products e.g. movie hall, multiplexes,
watching television, web surfing or even playing a video game.
-More and more number of customers are making use of internet for researching prices, finding
sales and reading reviews.
-Higher force
Bargaining Power of Buyers
-Customers who are extremely price sensitive have a lot of power.
- Switching costs is minimal or zero besides consumers has variety of options for product to
choose from4
-Despite of fragmented buyers and inability of a single customer in influencing a product or
price, their ever growing reducing loyalty towards one particular brand gives them a sufficient
power.
-Higher force
Bargaining Power of Suppliers
-Suppliers are able to lay down a price increase on their products or lessen its quality, affecting
the overall profitability of a company.
- Industry suppliers are the studios and production houses making movies, they can influence the
business.
-Bigger players have some leverage because of the large volume of product demanded by them.
4Anderson., M (2019). Market for streaming services poised for more competition. TimesUnion.
Available: https://www.timesunion.com/business/article/Market-for-streaming-services-poised-
for-more-13511524.php Accessed on 25/3/2019
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- Moderately high force
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