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How eCommerce is transforming the entertainment industry?

Apr 15, 2020 12 min read
eCommerce entertainment industry

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How eCommerce is transforming the entertainment industry?

Reading Time: 12 minutes

eCommerce is changing the Entertainment industry and the way we get entertained.

Let me take you towards an era where first our grandparents experienced radio and then television (TV), which was the newest and craziest medium for entertainment among our parents. The television was a black and white one where only limited shows were aired. 

Viewers used to wait for the time when the shows would start and no wonder, everyone loved all of them. Not because they all were entertaining, but because those were something they never saw or experienced.

Then came a shift in the entertainment industry-

  • Theatres showed newly released movies
  • Television became colorful
  • Radios were modernized and added in the mobile phones
  • SD cards were added in the phones where people can store songs and get entertained whenever and wherever they want
  • YouTube was launched in 2005 from where video entertainment took a hockey-stick growth
  • And then came the digital entertainment era

If you just look at the valuation of this global entertainment and media market holds from 2011 to 2019, then it is a massive growth in trillion US dollars-

eCommerce entertainment - global media statistics

Thanks to the eCommerce business model, that most startups and entertainment companies have adopted, things have changed rapidly in the entertainment industry. 

Let’s speculate about the eCommerce entertainment industry.

Impact of eCommerce on the entertainment industry

1. An era of On-Demand entertainment (DigitalTV, News, Sports, Movies, Web Series, Music)

Our childhood experienced analog television which is now converted to Digital TVs. They offer high-definition resolutions with a wide-screen aspect ratio. Digital TVs introduced how our television experience can be better.

After digital TVs, there was the era of getting everything mobile. With better and better internet packages, it brought the world to your palm through smartphones. And now, the entire entertainment industry expects and even earns their highest revenues from smartphone users.

If you look at the news industry, newspapers and news channels ruled the industry for decades. They are still not outdated, but you can now see companies investing in OTT (Over-the-Top) to stream news online via apps. Such apps target the users who want to know news around the world, but at their comfort. 

While comparing the usage of news apps in 2016 with 2017, here is what the data looks like. The usage increased, and there is no looking back for the news apps to become successful ones.

eCommerce entertainment - News app usage 2016- 2017

When it comes to eCommerce entertainment, music cannot be missed. You must be seeing Anil Kapoor on all the platforms and thanks to Spotify for over-promoting the app. 

But, it’s another on-demand eCommerce entertainment app like Gaana, Hungama, and more. The Indian user penetration in 2020 for music streaming apps is 3.2%, which creates revenues around the US 371 million dollars.

Even the sports industry is not left behind when it comes to streaming online. Whether it’s sports channels that launched their streaming apps or startups like KAYO Sports, they provide over-the-top video streaming services. This Australian on-demand sports streaming service brings LIVE and on-demand videos from top sports channels.

Sports and entertainment eCommerce - KAYO sports app

YouTube remained the only on-demand entertainment source until 2012. Yes, 2012 was the year when Netflix started creating their own content like films and series, followed by Amazon Prime Video, Hotstar, and more.

And, when it comes to Netflix, who can forget the web series. Like, the love is so much so that there is a trend on Twitter – #6Series6Friends. People share 6 series they want to watch and tag their 6 friends to continue sharing their favorites.

You can consider this- today it’s an era where everyone wants to get entertained any day, anytime, anywhere.

2. Consumption on Apps, SmartTVs and Gadgets (an increase of Screen time)

With more mediums to get entertainment, there is a sharp increase in screen time.

According to a survey in 2019, US consumers have spent more time on mobile devices than watching TVs. 

eCommerce entertainment - Mobile devices vs TV consumption comparison

Even in the UK, the average amount of time Brits spend on their mobile phones is around 3 hours and 23 minutes. 

eCommerce entertainment - Time spend on mobile in UK

These numbers are going to increase in 2020 and even in 2021. 

The direct advantage is to the businesses targeting people with higher screen time. Businesses developing on-demand apps, gaming apps, social media apps, and more will see the highest revenues in the next five years.

Don’t believe me? Look at these numbers-

The revenue of the mobile gaming industry is expected to reach 22.5 billion euros in 2021 from mobile devices.

eCommerce entertainment - Mobile gaming revenue 2021

Also, thanks to the new evolution of television, Smart TVs in which you can connect your smartphones and watch your favourite series, movies, and play games on big screens.

In 2018, 200 million smart TVs were sold across the world. And it is expected that this number would reach 250 million by 2024. Thanks to the number of smart TV users in the US that are forecasted to grow to 119 million by 2022. 

When connected with the right gadgets, your Smart TVs can record the shows missed, which you can see at your convenience. 

3. Segment-based series and movies (Adults, Kids, Entertainment, Language, Joner )

What brilliantly these eCommerce entertainment apps do is that they understand their audience so well that their segment-based user interface (UI) and user experience (UX) keeps them loyal towards them.

I know that it’s the minds behind building the strategy and the apps. But, here, the point is why people stick to these apps. All because of its UI and UX.

Look at Netflix, where a member can create profiles within an account. You can create different profiles as per your family members and change the settings for each of them. 

So, when I choose my daughter’s profile, the series or movies from kids categories come up.

eCommerce entertainment - Creating profiles on Netflix

That level of personalization brings success to these eCommerce entertainment apps.

The segmentation within these apps is also available as per languages, genres (like drama, romance, thriller, etc.), your past viewing history, and more.

As per your mood and choice, you select the world’s best series and movies that are available in your language, at your time, in your hands.

That’s what transformation is all about!

How is eCommerce bringing impact in the entertainment industry?

Let’s now discuss what role eCommerce plays in transforming the entertainment industry.

1. Ecommerce is redefining the entertainment industry

Yes, that’s true. Like we discussed above that the mediums and the ways to get entertained were different than the ones we have today.

But, we never made payments on TV sets to get entertained. So is the case with radios, music players, and newspapers. Everything was offline.

But, now we pay online to digital channels or apps to get entertained. That’s the new definition of entertainment today.

For example, if you want to watch the series of Star Plus, you can download the Hotstar app. But, if you want to see them before it airs on TV, you can pay Hotstar and watch it in advance.

2. A new way to sell entertainment

The people who have been in the entertainment industry have found new ways to sell entertainment.

You create series and movies, collaborate with any of the on-demand streaming service providers, and deliver your content to your audience.

Like the collaboration took place between Disney and Hotstar, where you can watch all movies and series from Disney on Hotstar.

eCommerce entertainment - Disney + Hotstar Collaboration

Even the moviemakers now use the eCommerce entertainment platforms to list their movies and earn even after they’re out of theatres.

For example, Avengers: Endgame grabbed the most attention from their fans on social media that the hashtags went trending. And, to take advantage of this love, Avengers: Endgame is now available on Hotstar.

eCommerce entertainment - Avengers launched on Hotstar

So, Marvel Studios are still selling their content and earning from the same.

3. A new way to connect with customers

Earlier, many well-known brands and businesses collaborated with YouTube and social media influencers to connect with their customers through different channels.

But today, they are using entertainment as part of their strategy to connect with their customers.

See, Myntra launched Myntra Studio-

eCommerce entertainment - Myntra Studio

Even, BookMyShow launched a LIVE concert with the top pop artists on Instagram-

eCommerce entertainment - BookMyShow Quarantine Show eCommerce entertainment - BookMyShow Live Show

All because these businesses see a huge loss in revenues due to the COVID-19 pandemic.

Hence, entertainment becomes the new way to connect with your customers for businesses of any size, any industry.

4. Using the power of the subscription model

With the subscription model, you provide special services to the customers who buy your services. Such special services earn business for longer periods.

Hence, for the below three reasons, businesses like Amazon Prime, HotStar, Netflix, Ganna, YouTube, Spotify, Blinkist, etc. launched a subscription model in their eCommerce-

  • Provide a better customer experience
  • Outperform competition
  • Earn customer loyalty

And, almost all businesses in the entertainment industry have taken inspiration in adding a subscription model.

5. A new way to earn from Ads (Image, Remarketing, Video, etc.)

Have you ever experienced an advertisement while viewing a movie or series? That’s where on-demand streaming companies earn the most.

eCommerce entertainment - Advertisement in Hotstar

This is the ad that I found on Hotstar. 

But why advertise on such streaming apps? Here are a few valid reasons-

Didn’t get me? Because these streaming apps have hundreds of millions of users, brands can directly reach their target audience.

That’s the reason why even Amazon Prime Video advertise on Hotstar, despite having millions of subscribers (who doesn’t want more :P)-

eCommerce entertainment - Amazon promoting on Hotstar

BTW, earning from ads is quite huge compared to the subscription services.

How is the demand increasing for online entertainment?

1. Viral Marketing using Social Media and WOM

You talk about any streaming services providers, and they use viral marketing to reach their target audience.

Netflix has been a strong user of social media as a tool to reach massive audiences through viral marketing strategy. When Bird Box came on Netflix, the social media and brand editorial team of the company saw the fans coming up with memes. Also, on New Year’s Day, Kim Kardashian West shared this tweet-

No wonder Netflix understood that it was the reactions from the movies and memes that are working for Netflix’s promotions.

Similarly, Disney + Hotstar’s viral marketing strategy completely relied on social media and influencer marketing to spread word-of-mouth online. They launched in India with a virtual Red Carpet Premiere of The Lion King and The Mandalorian.

The company collaborated with Bollywood’s top celebrities for this red carpet and grabbed more attention on social media.

These OTT streaming service providers use the right kind of social media content, including memes, videos, images, and GIFs to drive not only engagement but even subscription members.

2. Audience like personalized content

Like we discussed above, how Netflix allows you to add different profiles in a member’s account, that’s how they suggest personalized content.

Even Amazon Prime Video launched the same recently-

eCommerce entertainment - Amazon Prime Video profiles creation feature

All of these on-demand entertainment platforms use a recommendation engine that powerfully suggests the next series or movies watch.

When Amazon Prime Video updated its content recommendation engine to recommend the latest releases, the company saw 2x improvement over collaborative filtering.

Even if you look at YouTube, it shows you the video recommendations based on your past viewing history, what’s trending, what others have watched, and more.

eCommerce entertainment - YouTube recommendation

This way, the brands are trying to increase the viewing time of their audiences and hence, increase their market share.

3. Lack of time (binge-watching) – millennials are helping

Binge-watching is so trending among adults. And, I think Netflix is responsible for the same. 

Why am I saying this? 

Because when I went to Google to bring a definition of binge-watching for you, look at the suggestions of search queries-

eCommerce entertainment - binge watching Netflix on Google Search

Okay, the definition of binge-watching is watching multiple episodes of a series on TV or streaming platforms in one sitting.

And, you must look at these statistics of binge-watching from October 2019-

eCommerce entertainment - Binge Watching Statistics

So, this data clearly shows that binge-watching is an addiction to Millenials. But why?

Because they have limited time to get entertained and hence, when they sit for once, they watch the entire season or series so that curiosity or suspense is witnessed at one particular time itself.

Do you remember you used to watch series on TVs in the past? The episodes used to finish with suspense. Then, you have a curiosity on what will happen next, so you again tune in to that series the next day. That’s how people used to watch the series earlier.

But today, due to lack of time, these entertainment platforms are taking full advantage of launching content that would invoke binge-watching. 

4. Openness to consume global content 

No doubts about that.

What do you think about why you became a Netflix member? The answer is, to consume global series or seasons.

Earlier, TVs used to provide global content through global channels. But, that was challenging because different people in the family would want to watch different things at the same time.

With entertainment going mobile, you’ve all the freedom to watch what you like and even pay for it.

That’s the reason why Netflix is earning more compared to Hotstar-

eCommerce entertainment - Netflix, Hotstar - Average Order Value (AOV) 2018 - 2019

But, then with Disney buying Hotstar, the number of users are more compared to Netflix. Because when Netflix is surviving with 1.2 million paying subscribers, Hotstar has more than 3 million paying subscribers.

eCommerce entertainment - Hotstar, Amazon, Netflix Paying Subscribers

Hotstar’s free version already had series and movies from Bollywood. But, the demand increased when Disney bought Hotstar to dominate the Indian streaming market with global content.

5. Online entertainment apps influence consumers using traditional media and giving free packs with telecom operators

We can see that premium TV channels have tied up with one or other online entertainment platforms or started their own application to deliver digital content.

They are making special web-series, sports and programs only available on those platforms. And to drive more traffic on them, they are utilizing the full power of traditional advertising platforms like TVC, Newspaper AD, Radio Ad, Hoardings, etc. along with online advertising. 

Here comes the smart move – They are incentivizing consumers with lucrative plans in association with internet service providers and telecom service providers looking at the revenue multiplication over the years. 

India is one of those countries where mobile plans are not based on the pulse, it is based on the data we consume. Looking at consumer loyalty and sales, telecom operators are also providing online entertainment packs free with their plan for a limited duration. 

Using multiple strategies like above, consumers are brought to an online entertainment portal.

6. Readiness to spend more on home entertainment while/after COVID-19

It is surprising but true! 

As per the recent survey by McKinsey & Company on “A global view of how consumer behavior is changing amid COVID-19”, it is found that people have shown readiness to spend only on two categories majorly and one of them is home entertainment.

eCommerce entertainment - Mckinsey Report

Though it has been shown in the report for a couple of weeks, we are sure that this will remain the same until the economy picks up again. People will spend more time on the screen then going out at least for the coming 6 months. 

On similar lines, you can see a surge on new shows and movies on On-Demand entertainment applications. 

Are you looking for an online entertainment startup?

Good idea! Everything from devices to choices has been changed, but not the comfort and the convenience of the users. 

That’s what these on-demand entertainment apps are taking full advantage of. If you have a killer idea that will make a revolution in the entertainment industry, follow these steps-

  1. Prepare a plan with research and analysis of market, competitors, and target audience
  2. Validate your idea with any one of our eCommerce experts
  3. Take next business steps towards goal realization

Let’s do one thing- email us and let’s set up a call discussing this further.

Vatsal Shah is a co-founder of Pragmatic Consultancy and DIMC and has transformed various IT, E-Commerce, Chemical, Retail, Service sector organizations for 15 years now. Vatsal has been invited as a speaker by WordCamp, Meet Magento, GTU, ETail India, AMA, GLS University, etc. As a business coach and mentor, he has influenced more than 48 organizations in India, China, the UK, Africa, and the USA and trained more than 4700 people. Vatsal is the most artistic personality at eComKeeda because he is an amazing singer, dancer, artist, gold medalist in the corporate writing, and so much more.