Stratechery Distribution and Demand
May 18, 2021
Explore the clash of media strategies between AT&T and Amazon. Discover how these giants align their acquisitions with customer demand, rather than just focusing on distribution. Dive into the dynamics of WarnerMedia and MGM, and learn why understanding audience needs is crucial in the digital landscape.
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Internet's Impact on Distribution
- The failure of AT&T's media venture wasn't due to bias against old firms, but a misunderstanding of the internet's impact.
- True distribution involves physical infrastructure, creating moats and zero-sum competition, unlike the internet's open access.
Malone's Perspective
- Cable mogul John Malone, a Discovery shareholder, believed merging content and distribution is usually ineffective.
- He argued that managing connectivity technology and creating engaging content require different skill sets, seldom found in one team.
Zero-Sum Competition in Distribution
- Companies like Comcast and DirecTV invest heavily in infrastructure for a competitive moat, limiting competition.
- This creates zero-sum competition where one company's customer gain is another's loss, potentially leading to price wars.
