Market Growth

MARKET GROWH

Technology

Since 2000, the introduction of new technologies and electronics products had rapidly multiplied consumer opportunities to view movies:

1. Increasingly numbers of households had combination DVD player/recorders, so they could easily record TV programs and movies and then replay them at their convenience.

2. Moreover, consumers were increasingly interested in watching movies on their big-screen high-definition TVs and were upgrading to BLu-ray DVD player or player/recorders; both Blu-ray and high definition technologies.

3. Prices for wide-screen, high-definition TVs had been dropping rapidly, and picture quality was exceptionally good.

4. Recent advances in video-streaming technology were rapidly improving the prospects that VOD would emerge as the dominant movie rental channel within the next 5-10 years

e.g. In January 2007, Netflix introduced an instant-watching feather for PCs that allowed subscribers to view selections from Netflix’s library of 12,000 full-enough movies and television episodes streamed over the internet directly to their PC monitors.

5. LG electronics introduced a set-top box device that enabled Netflix’s instant-watching selections of movies and TV episodes to be viewed directly on subscribers’ television screens.

Regulatory influences and government policy changes

1. Some customer obtained movies illicitly on the internet via file-sharing programs

2. Starting in 2009, all TV stations in the United States were required by law to use digital technology and equipment to broadcast all their programs, a requirement that would result in far more programs being transmitted in high-definition format.

Product and service innovation

1. New services for internet delivery of movies, as well as better movie watching devices, were expected to proliferate over the coming years.

• Such as Netflix provided comprehensive selection of movie DVDs (In the first six months of 2008, Netflix spent...