Stratechery Netflix and the Hollywood End Game
155 snips
Dec 8, 2025 The podcast dives into the evolution of Hollywood, tracing Warner Brothers' shift from theaters to production as a game changer. It highlights Netflix's unique internet distribution model and its impact on content economics. The discussion on the $72 billion acquisition demonstrates Netflix's ambitions to dominate as an aggregator. Examples like 'Drive to Survive' show how Netflix enhances IP value without ownership. Finally, it poses tough questions about regulatory risks and identifies YouTube as a looming threat in the battle for viewer attention.
AI Snips
Chapters
Transcript
Episode notes
Content Beats Distribution Economics
- Warner Brothers discovered early that making films was far more lucrative than running theaters because content can be reused repeatedly.
- Ben Thompson frames early Hollywood as a tech-like industry focused on large upfront costs leveraged over time.
Internet Makes Distribution More Scalable
- Netflix began as DVD distribution and used internet streaming to make distribution globally scalable and low marginal cost.
- Thompson argues Netflix produced content solely to serve its distribution advantage, reversing Hollywood's historical model.
Aggregators Win By Reducing Choice Friction
- Abundant internet content hands power to aggregators that sort and reduce choice friction for consumers.
- The largest aggregators gain unbeatable customer acquisition efficiency and low churn, which drives their economic power.