Is the success of YouTube permanent?



Word Count (2168)- Excluding Executive Summary

Is the success of YouTube permanent?

Executive Summary

One may wonder what explains the huge success of YouTube. Undoubtedly, the access of billions of people to internet stimulated the need to watch movies at a moment and a location that is most convenient for the users to watch, which is different from watching TV, where the channels determine the broadcasting time.Moreover, users can broadcast their own movies and comment on the uploaded movies. The idea that a large number of people can broadcast and watch movies in an environment with anarchy contributes to the success of YouTube. This means that access to internet is the key for YouTube's business success. The current rise of smartphones that are mostly connected to the internet and by which one easily can create videos further boosted the use and success of YouTube. However, by using Porter's Five Forces Model, we find that the main threat for YouTube may come from substitute products. This may happen when e.g. TV channels will use new technologies that allow viewer to watch missed programs at a time of choice. Another threat may come from new entrants on the internet that will use internet as a podium for video sharing. Thus, YouTube should develop a strategy to stay innovative and create a competitive advantage compared to the competitors.

Discussion

Introduction

Since its advent in 2005, YouTube generation has transformed the realm of multimedia and video sharing. Internet traffic and packet transfer across network topologies is fast being restructured to allow for these renewed demands. YouTube's sustainable development lies not only with its video-sharing accessibility but also upon the efficient usage of information systems to sustain its competitive advantage.

Business Strategy Analysis

The success of businesses these days is dependent on the critical factors of interpersonal connectivity and social interactions. Statistics pertaining to these indicate towards a staggering trend such that over 8% of the world's population is using Facebook. YouTube witnesses video uploading amounting to 15 hours per minute on daily basis. Apart from entertainment, surveys reveal that approximately 16% of the people in the US use social media as a primary source for information related to healthcare. While 94% of these preferred Facebook as their top priority, a startling 32% referred to the online video database of YouTube to cater to their needs (Cheng, 2008).

YouTube is currently in talks with key content owners such as Sony Pictures, Channel 4 and ITV in order to being to introduce to its customers long-video viewing and sharing. As online television emerges as a major threat to YouTube's competitive advantage, this step shall help the company adopt to the changing market dynamics. In addition, this Google owned short-video sharing website is also preparing for a head-on competitive launch with Tv.com and Hulu , each of which aim to emerge as market leaders as long video content providers.

Recently, YouTube's efforts to increase its competitive advantage and to offer high barriers to entry to other key players in ...