The TV industry shake-up

My boyfriend moved into his new house over the weekend which meant no internet.

Guys… I kid you not.

I watched the kitchen channel. All day. 😂

It didn’t take me long to realise how much I watch Netflix and Stan. Yes, I have both. Are we even surprised?

This got me thinking: television certainly isn’t dead, but the way it is used is constantly changing. Think of it like the publishing industry – we’ve been experiencing this shift towards eBooks and audible books, but we’re still seeing printed books on the shelves!

In today’s blog post, we’re going to talk about how the digital world disrupted the TV industry by applying the marketing mix. 📺

So, how do you watch TV? Do you still watch free-to-air? Does anyone?

The television network was the leading entertainment channel (Lie, 2015), but now nearly 14 million Australian households have subscriptions to some sort of online streaming service (Roy Morgan, 2019). We’re talkin’ about Netflix, Foxtel, Stan, YouTube Premium – you name it (Roy Morgan, 2019).

For those of you who aren’t aware of the marketing mix, I’m gonna keep this real simple for you.

It’s a traditional model that was developed by Jerome McCarthy (1960; Chaffey & Ellis-Chadwick, 2019) with the intention to sell products. It’s often referred to as the 4Ps, which consists of:

  1. Product;
  2. Price;
  3. Place; and
  4. Promotion (Chaffey & Ellis-Chadwick, 2019).

Over time, this extended to the 7Ps to incorporate the services sector (Booms & Bitner, 1981; Chaffey & Ellis-Chadwick, 2019). The three additional Ps are:

  • People;
  • Process; and
  • Physical evidence (Chaffey & Ellis-Chadwick, 2019).

For this particular blog post, I’ll just go into the traditional marketing mix but you can see how all 7Ps can be applied to the use of the internet in Image 1.

Image 1: The 7Ps applied to the internet (Chaffey & Ellis-Chadwick, 2019)

Product

First up: product.

This is all about the elements (i.e. quality, branding, features) which makes a product, a product (Chaffey & Ellis-Chadwick, 2019).

So you’ve got a core product and an augmented product (Chaffey & Ellis-Chadwick, 2019).

The core product is the actual product that you’re buying, and the augmented product are like the extras for the core product (Chaffey & Ellis-Chadwick, 2019). Think of a television as the core product, then your remote, batteries and warranty as the augmented products.

Hold up… I actually just had a thought. 💡

As if online streaming can’t be both types of a product???

Take Foxtel, for example. Foxtel is the core product in that it provides on-demand content, but you can’t actually watch a Foxtel program without buying a TV (… or can you?). 🤔

And Netflix is the core product because it’s the online streaming platform, but you can’t actually watch it without a computer or mobile phone. 😲

Mind. Blown.

The beauty of services like Netflix and Stan is mass customisation. This is a combination of flexibility and personalisation (Chaffey & Ellis-Chadwick, 2019), and I’ll show you how this works (AKA let you into my Stan account… how intimate).

As you can see in Image 2, there is a section under the heading of “Because you watched Veronica Mars (2019)” (no judgement but I actually watched it from start to finish when the new season came out 😂). Stan shows me this because it knows that I watched Veronica Mars and it’s letting me see TV shows or films that are similar to it, so there’s a possibility that I may watch it and like it.

Image 2: Mass customisation on Stan (Stan, 2019)

Not only that, but you’re also able to personalise a playlist which is an option at the top of Image 2, under the “My List” tab (Stan, 2019). This provides you with the opportunity to use this features as a “watch later” or favourites playlist that’s completely designed just for you (Montpetit, 2014).


Price

Pricing within the marketing mix refers to an organisation’s pricing policies which can help differentiate a brand from another (Chaffey & Ellis-Chadwick, 2019). There are numerous pricing options on the internet from payment per use to a fixed cost to bundles with other products (Chaffey & Ellis-Chadwick, 2019).

Let’s compare the standard monthly plans for Stan and Netflix. 💰

Stan offers $14 per month for the Stan Standard (Image 3), which allows you to watch in HD quality, stream on three screens at the same time and download content on three phones or tablets (Stan, 2019).

Image 3: Stan’s monthly pricing for Stan Standard (Stan, 2019)

But if we take a look at Image 4, Netflix offers the same price of $14 per month with the same quality, but only two screens and two phones or tablets for content downloads (Netflix Australia, 2019). So, although my boyfriend and I split the streaming platforms – he pays for Netflix, I pay for Stan – Netflix does the job just fine but I can still add a third person to my account without needing to pay extra. 🤷🏻‍♀️ #iwin

Image 4: Netflix’s monthly pricing for Standard (Netflix Australia, 2019)

Place

Where can your customers access your product?

Do they need the internet?

Can they stream from anywhere?

Is it easy to navigate through your platform?

These are the sorts of questions to ask when talking about place in the marketing mix. ✔️

Place refers to the distribution of your product, and how you’re getting it to your customers (Chaffey & Ellis-Chadwick, 2019).

The television industry has experienced such a paradigm shift in viewership as you used to be only able to watch TV in your lounge room or your bedroom, but now you can quite literally watch your fave show anywhere at any time given that you have a mobile phone (which we all do).

Even though all of these streaming services are technically online, you can download particular television episodes or movies to your mobile or tablet device, and watch it offline (Netflix, 2019; Stan, 2019) – this is something I actually do on flights. ✈️


Promotion

The fourth P of the marketing mix is promotion, and this is about how you communicate your product to your customers and stakeholders (Chaffey & Ellis-Chadwick, 2019).

The internet has allowed us to openly communicate with brands effectively on social media in particular (Okoye, 2017; Chaffey & Ellis-Chadwick, 2019). Take Netflix and its hit rom-com film, The Kissing Booth (2019)When announcing the sequel, Netflix posted a video on their Instagram account (Image 5) which generated just under 3.8 million views and approximately 25,000 comments (Netflix Australia, 2019).

Image 5: Netflix’s announcement for The Kissing Booth 2 on Instagram (Netflix Australia, 2019)

By posting on social media, Netflix was able to connect to Instagram followers surrounding the topic of The Kissing Booth and its sequel in real-time (Okoye, 2017). This allows fans to discuss television series or films with other fans or the account itself (Montpetit, 2014; Okoye, 2017), i.e. Netflix and the hashtag #TheKissingBooth. 💋


To wrap up, let’s quickly summarise how the television industry was shaken up with the emergence of online streaming platforms by applying the traditional marketing mix:

  • Product – online streaming services such as Netflix, Foxtel and Stan can be considered both a core and an augmented product, depending on how you look at it
  • Price – most commonly a fixed monthly fee paid on the platform’s website
  • Place – mostly online but also available offline for downloads
  • Promotion – commentary has moved over to social media

I hope you haven’t judged my viewing choices too hard, but it is what it is. 😂

VP. ✨


References

Booms, B. & Bitner, M. (1981). Marketing strategies and organisation structures for services firms. In J. Donnelly & W. George (Eds), Marketing of Services. New York: American Marketing Association.

Chaffey, D. & Ellis-Chadwick, F. (2019). Digital Marketing: Strategy, Implementation and Practice. United Kingdom: Pearson.

Lie, K. (2015, October 9). Internet Streaming and its Impact on the TV Industry [Web log post]. Retrieved from Money Marks & Media: http://j469.ascjclass.org/2015/10/09/1365/

McCarthy, J. (1960). Basic Marketing: A Managerial Approach. Homewood, Illinois: Richard D. Irwin.

Montpetit, M. (2014). The internet is changing the definition of television [Website]. Retrieved from The Guardian: https://www.theguardian.com/media-network/media-network-blog/2014/jun/10/internet-changing-definition-television

Netflix Australia. (2019). Netflix Australia – watch TV shows online, watch movies online [Website]. Retrieved from Netflix: http://www.netflix.com.au

Okoye, J. (2017). 7 Ways Technology Has Changed Television [Web log post]. Retrieved from Techopedia: https://www.techopedia.com/2/29509/technology-trends/7-ways-technology-has-changed-television

Roy Morgan. (2019). Netflix surges beyond 11 million users in Australia [Press release]. Retrieved from Roy Morgan: http://www.roymorgan.com/findings/7912-netflix-foxtel-stan-youtube-amazon-february-2019-201903180631

Stan. (2019). Stan – Watch TV Shows and Movies [Website]. Retrieved from: http://www.stan.com.au

12 thoughts on “The TV industry shake-up

    1. vanessapulvera Post author

      Hey El!

      Netflix and Stan are my go-to! I still live at home so we have a TV in the living room but I’ve got an Apple desktop computer so that’s all I need to stream movies and television series 😝

      I do jump onto YouTube if I feel like watching beauty videos though! 💅🏻

      Like

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s