Is 410 Hw 4 Cable Companies and Ott Providers
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critically examine the document “A Tale of Many TVs” available on the class website. And,consider relevant concepts discussed in the class, for example, “one network, manyservices” or “internet of things,” to carefully analyze the competition between the cablecompanies such as Comcast and the OTT services such as Netflix. If necessary, scan thearticles cited in the document, as well as search for additional articles.What is the main difference between the business model of the cable companies andthat of the OTT providers? Is there any other context that comes to your mind—within the world of telecommunications/media or outside—where a very similarcompetition could be taking place?What would you do, assuming you are in charge of Comcast’s strategy, to counterpotential challenges from the OTT providers? If, as a team, you are unable to agreeon “the answer,” suggest a few possible options along with their likely implications.It might help to use a framework here, such as the Porter’s Five Forces model(
OTT companies, as opposed to cable companies, do not have a physical connection to their consumer, but utilize the connection of cable companies over the public internet to provide their content to users. Customers subscribe to services such as Hulu and Netflix and gain access to a library of content that they can stream via the internet. By focusing on acquiring quality programming and investing in faster speeds, they provide their customers with a better service. Therefore, while a cable company’s business model relies on selling set-top boxes that can receive DTV signals that they can then bundle with different programs (whether the customer wants all of those programs or not), an OTT provider relies on selling subscriptions to their library of content and rely on a connection to the consumer through cable companies (Rouse).Cable companies have an inherent source of power in this scenario, as their ownership over the physical connection to the consumer forces users to work through them to access any content. This allows cable companies to push their own content and programming to companies, and force a type of brand loyalty by preventing consumers from changing to other ISPs. Cable companies leverage this hold that they have on the market to charge higher rates to the consumers and only provide cheaper options through bundles with additional services. They create value for their customers by providing high-speed internet connection as well as investing in technologies that will improve speeds. This improvement, however, serves as an ironic form of justice, the faster internet that cable companies offer provide a foundation that allows OTT companies to reach their users faster and to improve on their sources of power. These powers include the ability to procure a lot of quality programs to offer clients, as seen performed by Netflix. As described in the article, Netflix has an inherent strength in acquiring content through agreements and contracts with studios, and was even able to work with Marvel/Disney to create original content as well as be the sole site that streams Disney content (Xue 15). OOT companies provide content directly to the consumers by skipping the traditional distribution channels as well as offer their consumers a lower price than their cable competitors. This allows them to take a hold on the market through an arguably better service that pushes against the inherent disadvantage of not being physically connected to the consumer. Cable companies leverage their foundation to keep the consumers while OTT provides a more convenient experience.