Youtube Case Study Essay Example for Free

Youtube Case Study Essay Question 1: There are several competitive forces challenging the movie industry. Film corporations are currently facing the challenges of websites offering free downloadable movie torrents along with DVD readers on computers, portable video devices, and the start up of the website YouTube in February 2005. Free online film downloads are four times more popular than legal film downloads that are paid for. This new industry is giving customers power to challenge movie store prices, customers are substituting pricey blockbuster rentals with free online downloads. This is transforming Movie rental establishments into price takers, rather than price makers. The online market is a new market for the movie industry; this is a problem because large film corporations are overcharging for their online products. They do not realize that Twenty dollars for a 24 hour movie rental is not going to appeal to customers. Another problem the movie industry is facing is that 30 to 70 percent of Hollywood derived content has been submitted to YouTube without legal consent. YouTube is profiting on movies that cost major production studios over $129 million to make. These problems are forcing film companies to enter the digital firm where business relationships are digitally enabled. They are entering agreements with online companies such as CinemaNow and Movielink, selling their products online via download. This has transformed the entire way the film industry marketed their movies. The strategic value of entering the online world is basically for mere survival of the industry. The problem of YouTube has also added complication to the creation of films. It has caused companies to resort to hiring more staff in an attempt to monitor the website. It has also forced the development of new technology such as Video ID which has been added to films in order to prevent unauthorized videos from appearing on YouTube. Question 2: Disruptive technologies such as YouTube and other free media websites have severely impacted the companies discussed in this case. Viacom (The world’s fourth largest media conglomerate) has resorted to filing a lawsuit against YouTube for $1.25 billion dollars in damages because more than 150,000 unauthorized clips if Viacoms copyrighted material has appeared on YouTube. Disruptive technologies have caused companies like NBC universal to resort to new job positions involving searching YouTube everyday for property posted without consent. So on top of losing money from lack of sales revenue, companies are forced to spend money filing lawsuits and hiring employees to tackle this new interfering technology. Question 3: Because YouTube is such a powerful company, studios have decided against Viacom’s decision (filing a lawsuit) and are developing a more constructive solution. Companies such as NBC Universal, Time Warner’s Warner Brothers and Twentieth Century Fox have entered into negotiations with YouTube to establish licensing agreements. They are shifting into information system trends like using websites (YouTube) for advertising. The goal of this response is basically to maximise revenue streams made possible by this new technology. It allows companies to earn revenues where their products might otherwise have been distributed illegally. This is something learned from the music industry. The movie industry needs to follow in the footsteps of the music industry; iTunes music store sells music for .99 cents per song. I think lowering the fee for online movie downloading could definitely benefit the industry. The music industry has been dealing with copyright infringement for several years; the movie business needs to team up with the online music conglomerate to learn from their experience and to work together to find an overall better way to overcome the challenge of copyright infringement. Question 4: I think motion picture companies should most definitely continue to use YouTube to promote their new films. YouTube is a heavily trafficked website reporting over 100 million video views per day; this provides valuable exposure for companies in the film industry. Information Technology is only going to grow larger, the film industry needs to find a way to take part in this revolution and take advantage of what Information Technology has to offer or else it will become a thing of the past with VHS’s and Cassette tapes.