Media companies are finally feeling the heat on the amount of traffic that video-streaming services are controlling at their expense. Rupert Murdoch chairman of Twenty First Century Fox believes media companies should focus on developing their own video streaming services as one of the ways of competing against the likes of Netflix, Inc. (NASDAQ:NFLX).
Developing streaming service should be the easy part for the media companies, but they would have to ditch Digital Rights Management (DRM) if they are to be successful in the space. Media companies have found it hard to compete against specialized technology firms like Netflix, Inc. (NASDAQ:NFLX) as they are tied to the principals of DRM. Media companies have over the years stuck with DRM as one of the ways of ensuring their content never gets copied.
Fear of reduced sales as a result of rampant copying has always been the reason media companies have opted to stick with DRM. The music industry has been a clear highlight that DRM’s principals don’t apply anymore as music sales have always grown even with rampant copying. Netflix, Inc. (NASDAQ:NFLX) and other video streaming platforms have been successful in the space as they have not paid any attention to the so thought benefits of employing DRM.
Fear of competition has also been one of the reasons why media companies have shied away from making the transition, seen by e-books that can only be read by certain e-readers. By ditching DRM, media companies will have positioned themselves to enjoy increased subscriptions. Netflix, Inc. (NASDAQ:NFLX) can develop apps that can easily be integrated into smart TV products by the fact that it does not use DRM, something that media companies have always struggled on.
Lack of DRM has also allowed Netflix, Inc. (NASDAQ:NFLX) customers to gain full access of their favorite content regardless of where they are and when they want it. Media companies will have to ditch DRM if they are to be successful in competing against Amazon.com, Inc. (NASDAQ:AMZN) and Netflix in the streaming business.
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