Zhu, K.,
2001, “Internet-based Distribution of Digital Videos: The Economic Impacts of
Digitization on the Motion Picture Industry,” Electronic Markets, 2001, Vol. 11, No. 4, pp. 273-280.
Internet-based Distribution of Digital Videos:
The Economic
Impacts of Digitization on the Motion Picture Industry
Kevin Zhu
Abstract
Digital technologies and, especially, the Internet are
profoundly reshaping the motion picture industry. Video-on-demand heightens the
trend toward digitization and disintermediation. In the short term, the
increasing use of digital technologies may result in significant cost
reductions throughout the value chain. In the long term, the digitization of
film production and distribution may induce a significant restructuring of the
motion picture industry. Digital film delivery may displace physical films,
videos and DVDs, thus threatening the long-term survival of video rental stores
and other middle layers in the value chain. Taking an economic and strategic
perspective, this paper examines the impacts of digitization on the motion
picture industry with a focus on disruption and disintermediation of the value
chain.
Keywords:
Digitization, Internet, e-commerce, disintermediation, value chain,
motion pictures