Research firm MIDiA presented a report about a new study that gives a disturbing prediction: the economic crisis has seriously hurt the seemingly unhindered growth of the VOD industry.

MIDiA the first in a planned series of reports on a large study of the impact of economic recession on the digital media market report that forecast changes in the dynamics of paid media consumption in a crisis. The Economics of digital market until recently demonstrated fast growth, helped by low interest rate levels and, in General, simplified conditions for business development. What’s next?

With the deterioration of the economy by international banks and other financial institutions will begin to be reassured that will lead to a decline in investment and debt collection.

The most vulnerable category will be Millennials, who will have to reduce expenses for paid apps — this applies to all digital entertainment formats. Even these platform giants like Spotify and Netflix in this situation come under attack, their revenues will drop, and many users switch to the more cost-effective services of competitors, which appears more and more.

In addition, many users will move to AVOD services, offering free access to the content by viewing advertising, and platforms such as Pluto TV (Viacom) and Crackle (Sony) will have a real opportunity to become a leader.

However, in the MIDiA think that paid platforms, there are a number of ways to avoid major damage, and gives examples of strategies of Amazon and Apple. Amazon offers (highly loyal in this case) users, in addition to the bonus, many free services, including access to high-quality content, and Apple will likely share many subscribe to its services at a single beneficial tariff for users of “Apple” products.

MIDiA analysts have identified another group of risk: specialized sports services, without the rights to broadcast content national leagues — their audience can go over to providers of traditional pay TV, and those, in turn, try to offer the most favorable conditions for subscribers, such as the ability to cancel at any time. Digital services at the same time may begin to experience serious difficulties with financing (and, therefore, the possibility of buying the expensive rights to broadcast), and many of them will have to reduce the scale of operation, to sell your business or even to close it.

SOURCE: Rapid TV News

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