1- A : Develop a business model for Getsream company taking into account the nine building blocks

B : Should the company concentrate on growth in membership or income per member? Which option should be preferred and why?

Getstream : Case Study Vision: To replace linear TV with online streaming entertainment. The Getstream is the leading service provider in entertainment with 210 million paid members in over 192 countries enjoying, feature films, documentaries, TV series in different languages. Members may watch anytime, anywhere, and viewing time as much as they want on any internet-connected screen device. Members may play resume and pause with no commercial breaks. The Getstream was started by Greed Hastings and Max Randolph in 1997. The company management feels that they are replacing linear TV channels which telecast programs at fixed timings with a lot of commercial breaks while the Getstream, streaming service is customized, personalized, and available on-demand. Such disruptions are extremely rare, radio was the prime media for home entertainment for almost 50 years until TV took over in the mid-1960s, as Linear TV offered great advantage big firms and consumers shifted towards this media. Streaming entrainment started in the mid of 2000 with the availability of the internet throughout the world. Top management of Getsream feels that they will be able to maintain the leadership position in this business as they have the first- mover advantage of a decade. Now, topmost linear TV networks have started to offer programs on-demand through apps that work on smart TVs and smartphones. These apps such as Disney+, HBO now, Zee 6, and Sonyliv enables live viewing on the go and catching up on missed programs. All those TV channels that will fail to develop apps will lose revenue and viewing. Streaming entertainment is growing fast because of: . The speed of the internet has gone fast and with less discontinuity lot of smartphones and smart TVs are becoming part of the connected world. Users can watch on any screen the content on-demand and the experience is customized Streaming entertainment are the main source of using UHD 4K programs . . Top management of the Getstream is confident that linear TV is going to become like fixed-line telephone and will not be the mainstream of this business. Background The company started in 1997 as a DVD rental firm through the mail. The first five years Getsream struggled to become cash-flow positive and to develop a sustainable model. The next five years were spent on fighting with Blockbuster another DVD rental company. The Getstream, started streaming in the US in 2007 and at the international level in the year 2010. TV channels that were providing programs to the Getstream decided to stop licensing their programs for the second run to the company's app and decided to launch their apps and streaming services. The Getsream made a bold decision of making their original programs. The first original series was released in 2013 and the company became global in 2016, after two decades of starting company. CEO of the Getstream is confident that streaming entertainment is bound to replace linear TV and the future is bright for his innovative company. To start a series by linear TV, they need to attract a large audience at a given time on a particular date while the online streaming medium is flexible, and provides the scale to spend more money as it is attracting a global audience. Current Position In the year 2020 revenue of the company was $ 25 billion. Revenue increased by 25% compared to last year. The increase in paid membership in one year time in 2020 was 32%. This was mainly because of Covid 19 which forced people to stay at home and restrictions were imposed on socialization. The other factor was the popularity of online and on-demand streaming services. While the demand for online streaming services improved, but the production suffered because of a pandemic environment, lots of TV series, movies were behind schedule and were missing the target dates because of continuous lockdowns. New peaks and resurgences of Covid harmed the planning, budgeting, forecasting, shooting of original programs For the first time in the history of the company operating margins increased up to 18% mainly because of decreased marketing cost, admin cost, technical cost as a percentage of revenue. The company also reduced the debt-equity ratio from 2.0 last year to 0.88 in 2020. The company also achieved a positive free cash flow of $2.5 billion for the first time otherwise debt was taken to purchase content in the past. Out of the total $ 25 billion revenue, 46% is contributed by the USA and Canada region, 31% comes from Africa, Middle East, and Europe. Asia with the largest population is only contributing 9.6% in the revenue. CEO believes that their biggest growth market is Asia but Getsream is not allowed to operate in China which takes the market of 1.4 billion people away from us while in India with almost the same numbers in the population, the company is facing intense competition from international and local companies. Streaming services are being provided in India by Zeeb, Premium video, Altbalajee, Hulu, Hotstar is in collaboration with Disney group, Sonyliv, and YouTube to name few The Getstream needs to be clear in India whether they need to follow growth strategy by offering low prices so the number of paid members increase or income per member income should rise for the company by increasing the subscription but in India, local streaming services are providing contents at the very low subscription rate. The main rival Premium Video is offering the services at half the cost of the Getsream. According to the Head of Content Development Division most surprising fact is that in Pakistan and India, Holly wood movies, American, Mexican, and Turkish TV series are more popular than their local content. If you add the Hindi / Urdu language option, viewing increases tremendously in this region for international content. The value of the Dollar has increased substantially against the local currencies which also kept the revenue down in the year 2020. The new strategy is required to penetrate in this region because of the popularity of linear TV. The company feels that they are competing against linear TV as well as YouTube in the Asian market as these services are being provided almost free or at a very low cost. Almost 98% of people are still watching linear TV in this region. The company is going through the experience curve and despite having ten years of first-mover advantage is still learning new insights and the strategy is continuously evolving for different markets. How many devices should be allowed for one member as the business is scaling up and what pricing strategy for each market, the company is still learning. Another objective is to make excellent local stories in all countries around the world. Local languages are having an impact throughout the world. The Getsream lead the Academy Awards with 38 nominations in the year 2020 and winning 17 awards. The Getsream makes it easier for customers to join and leave. New streaming services are being launched which takes the company closer to the vision of replacing linear TV. Competitors Mickey Plus- Streaming Service Mickey Group which is the largest group in the entertainment media industry launched its app at the end of the year 2019, initial response to the new platform was extremely encouraging as 11 million people subscribed to this streaming service within 24 hours. The first original release "The Mandolorian" became the most-watched TV series in the world. The library content of Mickey Plus at this point is small as compared to their competitors. The company believes in quality over quantity. Old TV shows and movies are available in huge quantities in the storage of the parent company but they are checking it on several parameters before approving it for placing it on the platform. Mickey Group owns Disney Pictures, Animation Studio of Disney, 20th Century Studio, Touchstone Pictures, Hulu streaming service, and in India they own Hotstar streaming app. The "Mulan" movie which was originally scheduled to be released in cinema houses in 2020 was exclusively streamed on their platform because of the pandemic environment throughout the world. Mickey Plus management feels that movie viewing has increased but new movies are being watched at home rather than cinema houses which are not considered safe in Covid 19 environment. The business model of the movie industry is changing. A lot of movies that were scheduled to be released in 2021 by the group will probably be released on the Mickey Plus for international viewing but for the Chinese market, they will have to license it with Tencents or Baidu, Chinese streaming services. Financial Statistics for the year 2020 Revenue $ 4.8 billion Net Loss $(800) Million Subscribers 110 million Application downloaded by 160 million The Mickey Plus is projected to touch $ 9 billion in the year 2021 and become profitable by the year 2024 In the customer satisfaction survey, they have been ranked second after the Getsream. Premium Video This streaming service was launched by Amazon, which is considered to be the number one company in the world. This streaming service was expanded globally in the year 2016 and is available all over the world except China, Iran, North Korea, and Cuba. This platform of streaming entertainment is following a low-cost strategy as the first six months subscription fee is $ 3 and then later on it is for $ 6 month. In the USA they follow different pricing strategy by offering premium services with extra charges. Library wise the content is huge but as far as quality is concerned it does not match the offerings of Getstream and Mickey plus. Amazon developed a device "FireTV stick" when this device is attached to any normal LED TV it becomes smart TV and one can watch all streaming services through the internet. The quality of reception also improves for TVs. Premium Video makes diverse programs and entertainment in different languages all over the world and language selection option is available for the majority of their TV series and movies. They have their studio which provides convenience and cost advantage in creating their own content. In the Asian region, Premium Video has been more successful particularly in India with their hit series like Mirzapur, The family man, Pataal Lok, Tandav. The company landed into trouble when they were taken to the court by the ruling government against their political dramas. Premium Video wants to avoid picking up legal battles with political parties and halted certain TV series season 2 to make modifications according to the Government requirement. Premium Video offers a lot of Tamil and Punjabi language movies to attract people with diversified backgrounds from all over the world. The company has started acquiring the rights of sports content. Football matches were shown during the NFL season and in Britain, they have replaced Sky Sports and covering their major sports events through Premium Video. US open rights have also been acquired by the company. The streaming services are facing criticism in Europe and India for streaming on 4K and 1080Pas lots of people are working from home and students are involved in online learning in the COVID environment is putting stress on internet service providers. The government wants Premium Video to use normal HD so the internet can be used for meaningful purposes. Year 2020 PREMIUM VIDEO- Financial figures Revenue US $ 15 billion Net profit US 2.2 Billion Debt equity ratio 0.30 Subscribers $ 180 million