Streaming as a form of distribution: the disintegration of the distribution chain

How new technologies not only impact our way of consuming media but also the infrastructure behind

Report by Triconsult on behalf of the Austrian Film Institute, December 2017

Austrian film is internationally as successful as it has rarely been before. These successes are lastly a result of the cooperation of the funding institutions, the film industry and the partners in media. The recent technological revolution means a great challenge of maintaining this balance also in the future. The Austrian Film Institute therefore commissioned a study in order to facilitate incorporating not only recent, but especially future developments of the market into deliberations and actions.

According to the results linear television will continue to be a heavily used medium for quite some time, albeit by trend decreasing in relevance. The behavioural trends of the advancing generation demonstrate significant change. Media usage of TV stays high due to the increasing viewing time of aging users. TV tends to be used like radio.

The loss of importance of video rental stores with physical copies of film can be observed, the sector DVD and Blu-Ray is also considerably shrinking. Instead electronic forms of distribution are expanding, since the internet with all its possibilities has gained in significance among consumers of all age groups. Only persons aged 70 years or older only infrequently utilize online media.

Especially video on demand and social media must be permanently taken into account. Also here the trend for slow adjustment is apparent. Momentarily the use of streamed content is still dominated primarily by domestic providers. Catch up TV, the time-independent availability of content of linear television, is used predominantly. Domestic media receive top rankings among content providers: 8 of the 12 best rated product offers were offered by Austrian media providers. Overall approximately a little over one million Austrians are estimated to watch video content online and rather infrequently.

But since Netflix entered the market user numbers regarding video on demand are increasing markedly: from 620.000 users in the year 2014 to currently close to one million users, for the year 2022 more than 1.3 million users are to be expected. In comparison with the amount of users of digitally broadcasted music, more so even in the area of online gaming, digital video use is still less spread. Nevertheless an annual revenue of 72 Million Euros is predicted for the year 2022. This would represent an increase by 50% since 2017.

And Netflix is not alone: Amazon Prime had acquired 30 million subscriptions by 2016, this year (2017) in total there are already 40 million. When it comes to developing new formats, the market power of these two providers has to be recognized.

Streaming has to be compared to other electronic entertainment offers as well. 2014 the audience of video reached 620.000, 1.5 million used digitally distributed music and 2.7 million people used digital games. Within digital media, video and film will show disproportionate growth, reach a new peak of 1.3 million users.

The whole study is available on the German Version of the Website