IMPACT OF NETFLIX  ENTERTAINMENT ON THE PROFITABILITY OF TELECOMMUNICATION COMPANIES : A CASE STUDY OF MTN.

CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

The industry of telecommunications has seen significant transformations in recent years, particularly in light of the proliferation of online streaming services. New platforms have recently arisen that distribute content to mobile devices such as tablets and smartphones, in addition to streaming movies and audio over the internet. These technologies have increased the number of different platforms that may be used for communications, entertainment, and business respectively. The biggest growth area in Internet usage has been video streaming. Consumers have shown a significant amount of interest in watching movies on demand and viewing video material on a variety of different devices, including televisions, video players, desktop computers, laptop computers, tablets, and smartphones. People like the ease of use of online video, as well as the high quality and three-dimensional elements that are now accessible. The proliferation of video places increased demands on the speed of communications networks as well as the telecommunications of such networks. Internet service providers are reengineering the network to make it simpler to share experiences online and to support the increasing rise of video.

According to some estimates, the entertainment sector's contribution to the total volume of Internet traffic accounts for around 30 percent of the total. This demand is being worked on by a number of different companies, including Netflix, Time Warner, Comcast, Amazon, and Hulu, amongst others.

A growing number of people in Nigeria are choosing to watch their television shows and movies on streaming services like Netflix rather than on cable. This preference spans all age groups. This spike in the consumption of Netflix entertainment has undoubtedly had an effect on the sales, profitability, and expansion of telecom companies. The market for telecommunications, sometimes known as telecom, is a subset of the larger industry that deals with information and communication technologies. The primary activity of the market is the operation of facilities for the transmission of voice, data, text, and video as well as the provision of access to such facilities (Businesswire, 2016).

1.2 Statement Of The Problem

1997 marked the beginning of operations for the media-streaming and video-rental corporation known as Netflix. It contributes to the production of original programming in some way. Netflix launched its first online subscription service in 1999, and it was available only via the company's internet. Netflix's website allowed users to make their selections for movies and television shows to stream. In addition, Judite (2017) said that Netflix is a well-known supplier of Video-on-Demand services since it allows users to watch as well as download a variety of media, including movies, streaming shows, and documentaries. The video-on-demand streaming service was made accessible to Nigerians in 2016, and with the debut of Netflix Naija, which intends to add more Nollywood content to its platform, there is no doubt that the streaming service is going to acquire even more popularity in Nigeria (Adejunmobi, 2019).

Since the launch of Netflix Naija, there has been a significant rise in the usage of data services provided by telecommunications companies, which has led to an increase in the profitability of these businesses. Only a select few people in Nigeria were able to afford the luxury of having a fixed phone in their homes or offices, and the majority of the country's telephone connections were found in government buildings, multinational corporations, and official residences. However, the telecoms sector of Nigeria has been in a dearth state, fraught with inefficiencies ranging from management, capacity, policy shortage, and corruption (Ebelebe, 2017). Based on the information presented above, the purpose of this research is to investigate the effect that Netflix entertainment has on the revenue generated by telecommunications companies.

1.4 Objectives Of The Study

The objective is to conduct in-depth research on the impact of Netflix  entertainment on the profitability of telecommunication companies. The study will be guided by the specific objectives;

1.        Determine the extent of Netflix viewership in Nigeria

2.        Find out whether the viewership of Netflix have an effect of the patronage of telecommunication products.

3.        Ascertain whether the viewership of Netflix have any impact on the profitability of telecommunication companies.

4.        Find out the factors affecting Netflix viewership and the profitability of telecommunication companies.

1.4 Research Questions

The study will be guided by the following questions;

1. What is the extent of Netflix viewership in Nigeria?

2. Does the viewership of Netflix have an effect on the patronage of telecommunication products?

3. Does the viewership of Netflix have any impact on the profitability of telecommunication companies.

4.  What are the factors affecting Netflix viewership and the profitability of telecommunication companies?

1.5 Significance Of The Study

The study will to a great be useful to the telecommunication sector, as it will enlighten them on need to leverage on upon the surge of online video streaming to maximize the profitability of their companies.

Additionally, subsequent researchers will use it as literature review. This means that, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regards to the impact of Netflix entertainment on the profitability of telecommunication companies.

1.6 Scope Of The Study

This study is structured to generally examine the impact of Netflix  entertainment on the profitability of telecommunication companies. However, the study will further show the extent of Netflix viewership in Nigeria, find out whether the viewership of Netflix have an effect of the patronage of telecommunication products, ascertain whether the viewership of Netflix have any impact on the profitability of telecommunication companies, and find out the factors affecting Netflix viewership and the profitability of telecommunication companies. The respondents for this study will be delimited to MTN, Nigeria.

1.7 Limitation Of The Study

Like in every human endeavour, the researcher encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. More so, the researcher simultaneously engaged in this study with other academic work. As a result, the amount of time spent on research will be reduced.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.

1.8 Definition Of Terms

Entertainment

The action of providing or being provided with amusement or enjoyment.

Online Streaming Service

Online streaming service (OSS) can be described as demanding online entertainment source for TV shows, movies and other media.

Netflix

Netflix is a popular Video-on-Demand provider that offers streaming and downloading of TV series, movies, documentaries etc.

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