Industry Life Cycle
What phase of the industry lifecycle are streaming services? What data and analysis supports your answers? (At least two sources must be used).
It’s on Growth stage. Please give examples, datas, and analysis to support this answer.
You may use data graph in the answer. But must cite the source.
Industry Lifecycle Analysis
Michael Porter’s model of industry life cycle identifies four stages that industries typically go through: introduction, growth, maturity, and decline. Based on this model, it can be argued that the media streaming industry in in the growth stage. This argument is immensely supported by extant literature and research studies. As Snyman and Gilliard (2019) report, the number of companies offering media streaming services globally has more than doubled since the early 2010s, with companies such as Netflix, Hulu, Sling TV, HBO Now, Apple TV, Amazon Prime video, YouTube TV, and Disney+ being the key players. This rapid increase in the number of streaming services providers is a clear indication that the industry is currently in the growth stage. In another research, it was found that the global streaming services market is valued at $342.44 billion as of 2019 and is expected to grow at a CAGR (compound annual growth rate) of approximately 15%, reaching a valuation of close to $842.90 by 2027. (Fortune Business Insights, 2021). For instance, Spotify, a music streaming platform, witnessed a year-on-year revenue growth of 31% between 2017 and 2020, suggesting that the industry is still more lucrative.
The growth of the streaming services industry is fueled by improved internet connectivity, increasing demand for subscription-based media services, growing popularity of on-demand live videos, and technological innovations such as AI and machine learning. The number of households with broadband subscriptions is on the rise worldwide. In the U.S., for example, the number of net broadband subscribers increased by an additional 600,000 subscribers in the third quarter of 2019 (Pennington, 2020). More than 75% of these subscribers cited access to media streaming as the main driver for their subscriptions, meaning the industry’s market share is on the rise. See figure 1 for the growth in video streaming market in North America from 2016 through 2027.
Figure 1: Growth in video streaming market in North America between 2016 and 2027 (USD Billion). Source: Fortune Business Insights (2021).
A similar trend is observed in Asia Pacific, where it is projected that media streaming industry will maintain a steady growth through 2028 as shown in figure 2 below.
Figure 2: Growth in Video Streaming Market Size in Asia Pacific by Streaming Type between 2017 and 2028 (in USD Billion). Source: Grand View Research (2020).
The evidence that the streaming services industry is currently in the growth stage is also replicated strongly in Snyman and Gilliard (2019), who conclude that streaming TV subscriptions have been on the rise since 2007 and will maintain an upward growth trend through 2030s. Figure 3 illustrates this argument.
Figure 3: Growth Trends in Streaming TV Industry Subscriptions. Source: Snyman and Gilliard (2019)
In conclusion, the media streaming services industry is currently in the growth stage and is expected to stay at this stage for the next ten years due to the presence of various factors that incentivize its growth.
Fortune Business Insights. (2020). Video streaming market size, share growth | Industry trends, 2027. Fortune Business Insights™ | Global Market Research Report & Consulting. Retrieved April 23, 2021, from https://www.fortunebusinessinsights.com/video- streaming-market-103057
Grand View Research. (2020). Video streaming market size, share & growth report, 2020-2027. Market Research Reports & Consulting | Grand View Research, Inc. https://www.grandviewresearch.com/industry-analysis/video-streaming-market
Pennington, A. (2020, March 11). The state of media & entertainment streaming 2020. Streaming Media Magazine. Retrieved April 23, 2021, from https://www.streamingmedia.com/Articles/Editorial/Featured-Articles/The-State-of- Media- -Entertainment-Streaming-2020-
Snyman, J. H., & Gilliard, D. J. (2019). The Streaming Television Industry: Mature or Still Growing? Journal of Marketing Development and Competitiveness, 13(4), 94-105.