There is increasing interest in the establishment and expansion of international digital service providers.
With reference to Netflix, Amazon Prime and Hulu, several studies have documented digital service providers’ expansion strategies, as well as the benefits and challenges of their entry into South-East Asia.
According to a study by eMarketer.com, digital subscription services are gaining popularity in the United States.
A study conducted in April 2015 shows that subscription-based streaming services are the most common platforms on which digital movies and TV shows may be viewed; this information was collected from US digital video viewers from 2013 to 2015.
Amongst these providers, Netflix, Amazon Prime and Hulu are the strongest ones in the US. Research shows that these service providers have all increased their subscriber bases from 2013 to 2015. The percentages of respondents who used Netflix, Amazon Prime and Hulu have increased by 15%, 14% and 6% respectively.
The commercial success of these service providers may be caused by an international demand for the paid-subscription model.
More internet connections possess the minimum speed recommended for streaming high definition content, the number of internet households has increased across multiple countries, and consumers have embraced the Paid-subscription model.
In order to capitalise on these trends, media companies, multichannel video programming distributors (MVPDs) have implemented strategies to bolster their paid-subscription campaigns.
In order to attract potential subscribers, MVPDs implemented tiered pricing strategies, created quality original content, and intend to distribute new media releases. In addition, they take advantage of increasing broadband rates by providing 4G services.
Although these favourable market conditions have allowed MVPDs to establish digital subscription platforms, there are various challenges that they must overcome. Before expanding into selected territories, they must overcome high barriers-to-entry into selected territories, high media piracy rates, and a maelstrom of other obstacles.
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