BARRIERS TO ENTRY
The online video streaming industry has a relatively strong barrier to entry, however, with technological advances, established content providers and creators are entering the online streaming business with increased ease. The major impediment to becoming an online video streaming service is acquiring, creating, and licensing content. Another barrier facing new entrants to the market is acquiring the network capacity to hold a significant amount of video content as well as support substantial website visits without crashing. This capability is expensive, and this high capital expenditure will prevent less established competitors from entering the business. Netflix’s first licensing deal with Starz cost them $30 million dollars per year to show their content. Netflix pays CBS and Fox about $250 million dollars each to let it air programs from their archives.