Written by: Roshan Dwivedi
Online video streaming sites from Netflix to Amazon to Yahoo are scurrying to create original content that will poach viewers away from their rivals. But an analyst with The Diffusion Group says that pouring money into scripted entertainment is a strategy that is destined to fail. “Business strategies do not work forever, as the most effective schemes are copied and augmented by competitors,” wrote TDG analyst Joel Espelien in a blog post. “As this happens, they lose their capacity for competitive differentiation.” Another problem is that online video-on-demand platforms aren’t growing a viewing audience; they’re simply competing for a bigger slice of the “same viewing pie,” because total TV viewing in the U.S. has remained flat, he explained.
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