Which companies in the industry stand out in regards to their view and actions in CSR?
Summary:
The Walt Disney Company is a fantastic example of a company in the media industry that pays close attention to its corporate social responsibility. According to its "About Disney" section, Walt Disney has earned many titles and ratings that indicate its social responsibility. Disney is a member of the Dow Jones Sustainability Indexes, which is a corporation of SAM Group, STOXX Limited, and Dow Jones Indexes. Members perform well in terms of "economic, environmental and social criteria." Disney was named a 2010 Bronze Class member. Disney is also part of the FTSE4Good Index Series for "[meeting] stringent social, ethical, and environmental criteria." Finally, Disney has also been a member of many KLD Indexes since 1990 for "defining strategies and benchmarking investments that integrate environmental, social and governance factors."
Analysis:
It is a positive thing for any company to be recognized by many criterion for its corporate social responsibility. It is even more crucial, however, that a company that markets to children (such as the Walt Disney Company) be socially responsible for the purposes of maintaining good standing with families, schools, and other societal functions that are meant to be family-friendly.
The difference between Disney and, say, Exxon Mobil is that Disney is catering to completely different demographic: children, parents, families, teachers, etc. who most commonly wish to see companies taking social responsibility--economically, ethically, and environmentally. Customers of Exxon Mobil are probably less concerned with the environment and the ways in which the oil is obtained and distributed; they just want their cars to function. It is definitely smart for Disney to concern itself with CSR.
Question: What are some current events in your industry? What is the impact of these events on the industry?
Summary: In five years time, the Cloud will store all of our music and videos, most TVs will be connected to the internet, fitted with Ultra-HD technology, and one in every two people in the developed world will be now connected to a social network, according to Omnicom media agency PHD. PHD paints the picture of the future media landscape in a book called '2016: Beyond the Horizon', out today (19 September).
It explores the technological developments the agency deems likely, including internet speeds of up to 100Mbps, and YouTube battling Sky for the media rights to the Premier League 2016-2019. David Fischer, vice president of advertising and global operations at Facebook, said: "The future PHD outlines is a place where technology enables us to connect with our friends and harness their collective wisdom to make better decisions. It is a future that is connected, networked and, while uncertain, certainly better." The book also uses Zappar augmented reality technology to bring the views of industry professionals like Unilever's chief marketing and communications officer, Keith Weed, to life. In February, PHD celebrated its 21st birthday by releasing an ad in which it challenged marketers to "up their game" ready for the next generation of consumers.
Analysis: PHD has been able to predict some of the possible innovations, and even published a book that is called "2016: Beyond the Horizon." Because of this book, we might see those innovations predicted by PHD a bit earlier than 2016. Beyond The Horizon (which, by the way, came out on September 19, 2011), has probably sparked an interest of millions of people, ranging from young adults to elderly. Also, the range has probably included the two groups of people that were probably interested in it the most, were businessmen and entrepreneurs. They are the ones to deliver the end-product to us, and since business (and entrepreneurship) is all about competition, they compete. After reading this book, people will probably start to try and get the product out sooner than their competitors (and I'm not talking about a specific product right now, just goods and services in general). There are so many similar products out there right now, that constantly compete (e.g. Regal and AMC) and every day they all try to improve their products and increase the number of consumers who buy their products. With those predictions described in the book, companies will probably start working twice as hard. Motivation could be one of the reasons why some companies have not even thought on some things that are pointed out in that book). Another reason would be the competition - everyone will try to get the final product out there as soon as possible, so it's possible that by the time we reach the year of 2016, the innovations that were predicted to come out that year would be even more progressed and improved.
P.S. This might seem to fit into a "Technology" section more, but I found it in the Media News section and this book does not only talk about technology innovations such as iCloud...there are a lot of media - related innovations as well.
Quesiton: What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal?
Time Warner Cable's Mission Statment: Connect people and businesses with information, entertainment and each other. Give customers control in ways that are simple and easy.
Analysis: The mission statement on the Time Warner Cable website seems to be a relatively simple statement of what the company seeks to achieve as a media corporation. Besides the part about giving control to the customers, nothing in the statement could be directly related to a corporate social responsibility, and seems to reveal little about the company outside of its strict business functions. However, this is certainly not due to a lack of strong social responsibility and involvement in the community, something the business is actually quite heavily involved in. Time Warner simple doesn't see it's application of these principles as separate from its corporate function. While millions are given to charity, the most important outreach and involvement projects taken on by the company are the public service announcements and the distribution of free cable and internet to schools. Directly from the website, "Greater still are the tens of millions of dollars more of in-kind contributions we provide through the production and distribution of public service announcements, free cable and high speed broadband connections to schools..." These activities are not separate from the mission statement - it just applies it in a socially responsible way. Of course, most companies have mission statements, which often sound high and promising, or at best, aren't bad. What separates companies from each other is in how truly they apply their mission statements. Time Warner Cable has excellent examples of how it has applied it's mission statement in ways that reach beyond the strict business interpretation. For example, the "Connect a Million Minds" initiative, which seeks to "introduce kids to afterschool science, technology, engineering, and math". This program recently reached a milestone, with 400,000 kids as part of it.
The initiative follows the mission statement of "connecting people... with information", and is a philanthropic initiative which seeks to contribute something of tremendous importance to the world as a whole.
Opinion: However, an important thing to recognize about mission statements is that they do not usually mandate moral behaivor. News Corp., recently at the center of the "News of the World" scandal in the UK, had the following mission statement:
"Creating and distributing top-quality news, sports and entertainment around the world."
While employees of the paper, which was a subsidiary of News Corp., did violate norms of ethical conduct, not to mention the law, they were technically still following the mission statement of the company. Social responsibility and ethical conduct can rarely be encompassed in something as simple and confined as a mission statement, which is about the goals of an organization and not usually about the methods. Those must be dealt with by a company's code of conduct, a far less general set of rules which deal with the behavior of employees. In sum, while a mission statement is important, and can be applied to corporate activities beyond official business, it is not a perfect slogan of how a company should and will act. No business can adequately summarize itself in a single sentence.
Question: What are key ethical issues this industry faces?
Summary: The article deals with the influence companies may project on TV media through financing TV shows. Kmart, which spends $600K on the comedy series "First Day," has the right to approve all aspects of the show - from clothing to the characters. The digital age makes it easy to blur the lines between traditional television and new methods of delivering programs to consumers - Netflix is about to produce its own show and "independent" YouTube series poster, Diablo Cody is backed by Lexus. The shift from pure TV shows brings us back to the era when advertisers had a lot of influence in the shows themselves.
This high level of involvement and association between brands and shows puts a lot of power in the hands of the sponsoring companies in terms of what gets shown. The more risque shows such as "Breaking Bad" could become disadvantaged due to advertisers not wanting to be closely associated with controversial stories.
The popularity, and therefore advertising power, of TV is shrinking. More people are opting to watch videos through alternative means, and the new generation is likely to not subscribe to cable TV as their parents did. This threat makes TV networks more friendly to the idea of advertiser-created shows. While the shows are expensive for advertisers to sponsor and companies are concerned with the risk of starting a failing show, many see this as a good advertising opportunity.
In the case of "First Day", Kmart was able to make the characters and the story line into an advertisement for the clothing lines their stores sell. The company did their best to make the characters relatable and the show completely unoffensive. The episodes are shorter and shooting time limited so as to minimize the total cost, maximizing the cost/profit balance. As TV ads prices continue to rise, more companies are looking into creation of their own TV shows as a profitable alternative.
Opinion: It can easily be argued that a quality TV show is an oxymoron, however the relationship between advertisements and TV media should be not only concerned with the further risk to quality, but also the threats to ethics.
Advertising is often on shaky moral ground - after all, a lot of the time its goal is not only to educate the consumers about the benefits of a product, but also to convince consumers that they want things they really don't need.
Shows sponsored by companies are advertisements that consumers may often not recognize as such, making them questionably ethical. Furthermore, such show-long advertisements undermine media's main goals - to inform and entertain - by associating the brand so strongly with the show. These shows are disinclined to be controversial, adding just another time-slot of bland, pointless chatter.
One of the main ethical challenges the media faces is balancing between the demands of financing itself through advertising and following through on its goal of entertaining and informing the audience. There are no clear answers as to where the line needs to be drawn, but this influence of sponsoring companies on TV networks is definitely in the dark grey.
Question: What are some examples of ethics challenges that industry players have experienced?
ARTICLE SUMMARY: In the field of media, there have been several cases of ethical dilemmas, particularly in the form of journalism. Within the past decade, two major scandals have been with the New York Times and a British branch of News Corp. titled News of the World.
With the New York Times scandal, the controversy discussed is that of the reporter Jayson Blair.In 2003, it was discovered that Blair had written numerous articles with the help of plagiarism and fabrication: Blair cited interviews and conversations that never actually happened, falsified his locations and details of the stories, and stole sections from articles about different stories from different newspapers.The stories covered important events which actually did happen, such as the Maryland sniper cases and the stories of wounded soldiers returning from war, but exaggerated and deceived in order to look better, sometimes stating that he received info from unnamed sources in order to cover his deceit.Blair had been working for the paper for several years since he started as an intern, moving high on the ladder with his enthusiasm and stamina, until his fictional information had given him a place at the top national reporting staff.Ultimately, Blair was ousted when others began checking his information and the lie began to fall flat.According to former reporter Alex Jones, “There has never been a systematic effort to lie and cheat as a reporter at The New York Times comparable to what Jayson Blair seems to have done.”Blair lost his career and went back to school while the New York Times lost money and respect as it tried to convince the public that it is still trustworthy.
In the News of the World scandal, the deceit was again used, but this time in a different way.Information arose which signaled that reporters for News of the World hacked into the phones and voicemails of numerous people, including celebrities and politicians, in order to get more information about stories.Public outrage at these deeds reached a high when it was discovered that the murdered 13-year-old Milly Dowler had her phone hacked shortly after she disappeared.Besides listening to her voicemails, those involved also deleted some of them from her phone; this gave her family false reassurance that possibly she was still alive and was the one who had been accessing her phone.Ultimately, News Corp. faced heavy fines, several arrests were made, and News of the World was discontinued due to the scandal.
MY ANALYSIS: By looking at the New York Times and News of the World scandals, several major ethical challenges arise.From the New York Times case, to what extent should those in printed media (and media in general) be required to be honest?From the News of the World case, how far are reporters allowed to go in order to get the truth?
For the case of Jayson Blair, I would argue that the reporter is fully at fault for the deceit he caused.While several of his stories were altered to be more entertaining and important, he did so at the cost of journalistic credibility.Newspapers which cover real stories are expected to be true, even if it means that less people find it interesting; news organizations have fought the problem of trying to stay popular by having editorials, which are sections where people write opinions in a more casual tone which still cover the news while adding an entertainment value.As for the issue of plagiarism, that is a blatantly wrong offense; if a reporter uses information from someone else, he has to cite it, which is a lesson we’ve learned since elementary school.
As for the News Corp. scandal, the line between right and wrong is more debatable.While it is true that the organization broke the law, one can argue that they did so for a good intention, which was to get more information and make the reader-base more informed.However, while the reader base does have a right to be informed, individuals have the right to privacy, which means that the contents of their phones can only be seen with their permission on the ruling of the government which decides it is necessary.By breaking this right, it can cause serious consequences, especially with the family of Milly Dowler who were given false hope only for it to be taken away again.
What are the basic economics of the industry? How do companies make money?What are their costs?
Article Summary:
It isn't really news that newspaper companies are loosing money. With the easy availability of news on the internet, both circulation and advertising revenue have fallen. However, weekly advertising circulars have remained a reliable revenue source. Now, even this product is going digital.
Associated Press, in partnership with 32 newspaper groups and 20 retailers, plans to launch a mobile version of advertising circulars today called iCircular. It will offer discounts, promotions, a digital shopping list, and even store hours/locations. The chairman of the Associate Press board of directors' revenue committee hopes that this app will further newpapers' break-in to the hot mobile market. This app will also provide the newspapers and retailers the advantage of being able to collect tracking information about consumers, which is impossible with print circulars.
The revenue from advertising circulars has remained steady in the past decade as the newspaper add revenue fell. The steady $5.2 billion revenue accounted for 18% of total newspaper add revenues in 2010, up from the 9.2% in 2000. Nonetheless, it is predicted that the revenue will fall as other, more robust markets, attract ad dollars previously kept by print circulars. This would be disastrous for the already precarious position of newspaper companies. Some attempts to preserve the revenue stream from circulars have already been made - Gannett Co., a newspaper publisher, has released earlier this year Shop Local, a successful online circular.
The 18month old idea for iCircular, however, still does not have a fully thought-out business model. The advertisers participating in the test version that will run until the end of the year are not paying anything to be included. The Associate Press board of directors is scheduled to meet in late October to determine the business model.
Opinion:
This article is notable for the reason that it illustrates two major themes in the economics of the media industry:
1. Revenue is divided mainly into that from products and from advertisements, the latter being more important for many areas of the industry such as newspapers and TV; and
2. Print media is going out of style.
As a daily adherent to the morning coffee and paper and its evening twin, a novel and tea, I have a vested interest in the continued success of print media. This success, however, hinges on the advertisements we all love to hate, particularly that of the weekend circulars.
The media industry is going progressively digital. Most visual media is now available online as well as in its original form, the former often cheaper if not free. The importance of the physical product, such as the newspaper, is therefore loosing its strength. However, while the advertisements in the daily paper are usually ignored by consumers, the weekend circulars have remained the main attraction at some Sunday breakfast tables. Many people are now choosing to check news online, but so far, no widespread replacement for the circulars has been found.
In simplest terms, the business of media is primarily the delivery of other people's messages to the masses. The income streams are therefore divided into that from the people (for messages they want to hear) and that from those who are promoting themselves (and are willing to pay for the opportunity to do so). The exact products and services range widely - from iTunes to book publishers - making more specific generalizations difficult.
While all media companies are struggling with the growing pains of adapting to a digital market, in the long run it could mean higher revenue streams. It is doubtful that the industry will ever go completely digital, however, the lessened importance of the physical product will cut production costs, though that of software development and maintenance will rise. For the moment, the industry is in limbo - struggling to be both digital and physical. Like any other product industry, media companies must pay for production and distribution. In the current market, they also need to spend on innovative research into best ways to leverage the digital age into media success.
What drives revenue growth in this industry (i.e. more units sold, expanding geographic reach, lower costs for manufacturing, etc.)?
Summary:
This article discusses how DreamWorks Animation SKG, an American movie production company, is thinking about launching a Shanghai-based company which would be responsible for producing and releasing movies marketed specifically to the Chinese population. DreamWorks is only one of a few (including Legendary Pictures and Relativity Media LLC) American studios actively trying to reach the Asian market. While some other companies have teamed with Chinese counterparts, DreamWorks is attempting to establish an entirely separate branch of its company abroad, unaffiliated with any domestic company within China.
The anticipated success of the business venture arose from the record-breaking $93 million grossed in China this past summer by Kung Fu Panda 2. The biggest challenge for the company is that China's policies regarding foreign films are strict--the government only allows 20 foreign movies to show annually.
Opinion:
As long as the United States happens to be trading (however reluctantly) with China, it's worthwhile and profitable to expand businesses there as well. DreamWorks (and those other companies) have the right idea. Different peoples may react to the same movie in very different ways, and it seems that DreamWorks is taking this into account and finding an alternative method of marketing to counter this issue.
With China, the main obstacle for these studios is the country's harsh rules regarding foreign films. This is the danger that DreamWorks faces by trying to blend into a communist nation. China's government is more interested in making money within China than working in tandem with other countries' businesses. For DreamWorks, however, opening a branch in Shanghai makes sense if it wants to become more trusted and respected in Chinese culture.
In the media industry, there is definitely a divide between media in the United States and any other country (China, for example). Media is largely influenced by the people's culture--and usually the people's culture is affected by what the media portrays. But since each country's culture tends to vary significantly (especially in the US versus in China), it's often difficult for media barons (e.g. DreamWorks) to market similar products in such vastly different countries. In today's economic climate, it is in the best interest of the company's mother country (in this case, the US) for the company to invest in overseas marketing ploys in the hopes that the foreign people's loyalties will shift.
From the perspective of the Chinese government, however, DreamWorks' current endeavor sounds like a threat. Part of the reason for this is because the US and China haven't agreed upon a bilateral investment treaty (BIT), thus complicating international trade, business, and regulations. From an economic/political standpoint, the US and China should establish a trade agreement that is advantageous to both countries and does not leave questions floating around (namely: What do you do if China only allows 20 foreign films per year, and your American company's film is produced in China and solely marketed to the Chinese people?).
DreamWorks' actions are definitely indicative of a change in marketing patterns. China has more people to watch movies, more places to show movies, and more people who are dying to experience the media industry due to many regulations in China that have impeded the ability to watch movies often and freely. The media industry is simply latching onto this new way to make money: marketing to a new (and possibly more responsive in many respects) demographic in another country.
Summary: With the introduction and mass popularity of the internet, media is changing rapidly. Newspapers papers in particular have been sorely affected, since news can often be accessed online for free, either from news sites themselves or free blogs. Having seen a massive decline in sales of their print editions over the last few years, newspapers have been seeking new ways to earn revenue. One market they have begun to carve a niche in is the e-book market.
Newspapers, news organizations such as Fox News, and blogs such as The Huffington Post have begun to package together new material or previously free material and sell it in e-book format. This creates a whole new source of revenue for the companies, or allows products which previously incurred a loss now will turn a profit.
The use of reporters in writing e-books is also changing the wage structure of the news industry. Traditionally, reporters will be given an advance sum and sent off to report in the field. By using e-books, rater than using the advance method, the reports share in the profits earned by sales of the e-book the company will be publishing.
However, the field is relatively new, and certainly not without its share of problems. One of the largest is sales - in the article, deputy editor of the New York Times Pamela McCarthy puts the sales of special edition e-books in the thousands. This problem is related to another problem faced by the news media's niche: advertising. There are lots of e-books, but while a print book can be advertised simply by having a stand in a bookstore visited by hundreds of people each day, an e-book requires much more investigation by the potential customer. Letting people know how much there is, and what individual companies are publishing, is difficult (though far from impossible).
Opinion:
Are e-books the new path ahead for news companies? Yes - they may very well be the turning point for companies such as The New York Times or The Washington Post, a paper which has been hemorrhaging money for some time now. A new source of revenue, one with significantly less costs than most new products, will likely help turn these companies around.
Expansion into technology is how media has grown since the start of the digital age. Companies like Amazon, based online, have overthrown traditional booksellers. Barnes and Noble has survived, due in no small part to its introduction of the Nook (an ereading device which has proved a serious competitor to Amazon's kindle). News has moved online, not only in the form of digital platforms for traditional news organizations, but digital-only websites and free blogs. Even TV and Movies have become digital, with Netflix now streaming movies straight to computers.
If traditional news companies want to survive, they too will find ways to compete and earn revenue in the digital marketplace, besides simply putting their content online. While the Wall Street Journal has survived rather well by putting its content online and charging for the full product, this is partially due to the specific business reporting that the Wall Street Journal specializes in. Companies like the New York Times have to compete with other, more broad-based news reporting organizations like the Washington Post and USA Today. If one of these companies were to simply offer their services online at a charge, readers would flock towards one of the other free sites.
e-books are an excellent new area in which the industry can earn a profit. By offering these books for a small price on e-readers, they offer a whole new product that has the potential to be a major area of growth.
Issues with this idea were brought up in the article. However, neither of the cases against the viability of e-books is an insurmountable barrier to the success of the programs. Sales are comparatively small, but the concept of news organizations selling e-books is as well. When the concept becomes more common and public knowledge of the practice becomes more commonplace, these products' sales will increase accordingly. The problem of advertising is more complex. Although traditional advertising methods may be used, their effectiveness with e-books has yet to be determined. A possible solution is for newspapers to devote a greater amount of advertising space to their own e-books, which may increase sales of those e-books enough to offset advertising money that otherwise could have been earned from selling that space to other companies.
Question: Discuss supply and demand in the industry.
Summary: Andy Pearch, the director and founder of MediaSense Company, announced that the new demand and supply-side patforms - DSP and SSP - will "revolutionise the media-planning and buying industry". The two new platforms are supposed to change the relationships of media platforms with brand owners and media invetory owners, and that is important because 80% of the media market is planned and bought through intermediaries (intermediate agencies) and in most cases that means through media agencies.
Here are some of the advantages that, according to Pearch and MediaSense, DSP and SSP are supposed to bring in:
There will be a shift to outcome-based trading, whereby media owner inventory will be priced according to its direct value contribution to customer engagement and/or sales. Brand owners will therefore be increasing investing in activities that directly and measurably impact sales and/or other KPIs (key performance indicators).
Data analytics providers will encroach upon the traditional market research space, resulting in proxy metrics and representative panels being increasingly replaced by "end game KPIs and consumers". Brand owners will therefore be able to bring the traditionally disparate disciplines of performance management and decision-making much closer together.
There will be increased connectivity between retail sales data and media platforms, enabling brand-owner marketing activities to be more responsive to consumer behaviour (and potentially retailer demands!).
Brand owners will increasingly use platforms to buy media directly from media inventory owners, the early adopters of which are likely to be those involved in performance-based activities that will benefit from increased control of a critical sales channel.
The relationship between brand owners and their media agencies will change significantly. Some will choose to "downgrade" their relationships to one of pure trading supplier, whereas others will choose to "upgrade" the relationship to a strategic partnership level.
Analysis: In my opinion the launch of these innovations is too risky. In fact there are more challenges and risks to this project than there are advantages. Here's a list of all the challenges and risks MediaSense came up with:
The contractual relationship between media agency, media owner (who could be the same entity) and brand owner will have to change, as will remuneration policies.
Transparency related issues will create "inefficiencies" in the value chain that will need to be addressed using new processes.
Brand owners will have to understand where resistance of self-interested parties dressed as protection from e.g. JICs, media owners, media auditors and others, is ultimately against their own long-term interest.
Migration from traditional intermediated metrics to new media currencies will not happen overnight and therefore there is a keen requirement to ensure value doesn’t seep between the "transitional cracks".
As data becomes increasingly valuable, there will be a need for new approaches to data ownership, portability, hosting and adserving.
Many brand owners will find they become "accidental analysts", which could result in resource overload and information paralysis if data is not appropriately aggregated, filtered and displayed
The transparency related issues is what worries me the most, because the "inefficienies" in the value will have to be addressed using new processes, but how much time is it going to take to come up with these processes? And what if they will turn out to be just as "ineffective"?
In my opinion, it would be much safer to wait and try to improve these two platforms or come up with a different strategy to get the media agencies a new status and improve their relationships with brand owners and media inventory owners.
Question: What are some current events in your industry (media)? What was the impact of these events in the industry?
Article Summary: Last Thursday on September 15, 2011, Netflix, one of the giants of the media industry, had its shares fall by 19 percent. This came from a the attempt to implement a new policy focusing mainly on streaming entertainment to viewers while trying to cut down on the usage of DVDs. While users could formerly get unlimited streaming and DVD rentals for approximately $10 a month, now the bundle has been split, with each of the options costing around $8 monthly, meaning that those who want both DVDs and streaming have to pay $6 more.
This drastic change did not get good reception, as along with dropping in stock the company also expects to lose 1 million customers, mostly in DVD subscriptions. However, while dealing with some large numbers, this is a fairly small setback for the company: it is still projected to have a total of around 24 million subscribers by the end of the quarter, with an estimated 12 million staying in both plans and paying the extra 6 dollars. However, Netflix should still be wary, as some companies like Comcast are using this moment of weakness to demand a higher payment since a large percentage of the viewers watch their shows. Additionally, Netflix is expected to take another hit when the Starz content, including several Disney and Sony movies and shows, expires and is removed from the site, as Starz has refused to renew their deal unless they get paid more for licensing fees.
My opinions: Overall, I would say that Netflix's action to change prices to encourage more streaming and less DVDs was worth the price. While 1 million of their customers have stopped their subscriptions, they still are expected to have24 million, with the possibility of many more joining due to Netflix's consistently strong growth each quarter. Additionally, via some rough calculations, Netflix earns more revenue with the new prices than with the old. To wit:
With 25 million customers, assuming EACH one has the old unlimited streaming and DVDs price of $10 a month, Netflix had a revenue of $250 million each month.
With 24 million customers, 12 million of which still have the unlimited streaming and DVDs plan at $16 now and the remaining having EITHER unlimited streaming OR DVDs at $8 a month, Netflix has an estimated revenue of $264 million each month.
These are rough calculations, but even if you assume that every customer had the old unlimited plan, Netflix still makes more revenue now than it did in the past. However, this relies on the assumption that Netflix's numbers will remain fairly constant or increase. If more customers switch to only streaming or if Netflix loses significantly more customers than their end of quarter prediction expects, revenue will decrease. Thus, this action, while bringing some shock and loss in stock prices in the short term, benefits Netflix by brining in more revenue, which in turn lets the company get more shows and movies for the website and thus enhance the consumer's value. Additionally, since DVDs are more expensive than streaming since they require the purchase of physical discs instead of bits of data which can be copied and sent across the world easier, even if Netflix does end up losing revenue it would still increase profit by reducing the number of DVDs.
All things considered, while Netflix is suffering from a setback currently, the company has consistently been increasing in value and revenue since 2008, as seen in the attached image, and I believe that their role in the media industry will still stand strong.
