2025: The year "The Streaming Wars" flipped to "The Distribution Wars". '

2025: The year "The Streaming Wars" flipped to "The Distribution Wars". '

In other words, The Great Rebundling is fully underway BUT, the way in which rebundling takes place is still anyone's best guess. It's easy to make snarky comments about the cable bundle returning but the magic takes place in the details. Let's dive into the 5 strategies in play in these Distribution Wars:

1) CABLE 2.0 [Charter]

As we saw with Charter's 2023 Disney deal, many Charter Subscribers now receive Disney+ for free. Charter's POV: "we're already paying Disney for its content on behalf of our customers, why is Disney charging them again?" In this strategy, Charter is offering the ad-supported version of Disney+ for free to Spectrum TV Select customers (some portion of its 13M+ Subscribers).

Why did it take until 2023? This was the year that Charter finally decided “the cable bundle is dead, let’s disrupt ourselves.” They were willing to risk Disney pulling its channels (Disney, ABC, ESPN) out of the Charter cable bundle, which would drive usership to ~0. Hey, there’s always selling internet. The cable & telecom industry isn’t thought of as innovative but, recall, the telcos already pulled this off once when they moved from charging for minutes, to charging for data, to charging for the device.

Charter's strategy: deliver streaming to its own customers for free, thus driving cable & telecom churn to ~0 and justifying small annual price increases.

2) AGGREGATORS PLAY MEDIA [Amazon]:

With an estimated 200M+ global Prime members, all of whom ostensibly consume entertainment, who can offer the media world more? And, because they sell toilet paper, short-term revenue requirements from content are low. That said, recent reports suggest that the Prime Video unit, itself, is profitable.

What's more, Amazon's advertising business is approaching $50B in revenue. What better category of premium CPM ad impressions than CTV? As the company further invests in the holy grail of ad inventory (live sports) – most notably with it’s 10 year / $10B Thursday Night Football NFL deal – it’s surely doubling down here.

Amazon's strategy: leverage massive user base + "unfair" monetization requirements and, eventually, build massive CTV advertising business (not to mention, who hates winning a few Oscars?).

3) FANDOM AS TOP OF FUNNEL [YouTube]:

Scale, you say, eh? With 2.5B worldwide users, Amazon's Prime Membership feels like a "lifestyle business" when it comes to YouTube’s ability to deliver entertainment & monetize attention at scale. YouTube's double-edged sword: almost 100% of YouTube's usage is fulfilled by UGC / creator-driven content (read: not highly produced Hollywood stuff). This is GREAT because it's cheap and virtually all Hollywood shows have corresponding user-generated fandom hosted by YouTube; perhaps the greatest top-of-funnel you could imagine. It's NOT GREAT because Hollywood is famously protective over its IP, and the idea of exposing the show Game of Thrones to a couple random podcasters talking about Game of Thrones sends a shudder down many-a-producer's spine.

YouTube's strategy: leverage their incredible user base and UGC content to drive interested users to premium Hollywood content.

4) ONE RING TO RULE THEM [Netflix]:

The disruptor becomes the incumbent. Netflix's core strategy hasn't changed much over the years: hoover up all available content (and supplement it with your own originals) and house it under a singular brand. In its own vision, Netflix sees themselves as both the cable bundle and all of the channels within. And it has worked: Netflix's Churn Rate is by far the best in its class, and quickly becoming a full blown consumer staple. The big outstanding question: now that available content is priced at a premium, can Netflix continue to aggregate enough must-have programming to continue as not only the top streamer but also the top distributor... especially on the next battleground of live TV?

Netflix's strategy: aggregate as much of what consumers want to watch, put it on demand, and become the app that drives ~100% of usage on the TV.

5) OWN THE STICK, OWN THE USER [Roku]:

Everyone who wants to watch TV... needs a TV...right? As we rode the smart TV wave up, Roku was perhaps the largest independent winner. First, converting dumb TVs into smart TVs – and then, embedding its tech directly into smart TVs – Roku amassed 90 million Roku households. The magic was the razor / razorblade model, which bucked the trend at the time. In 2010, when the average TV cost almost $500, buying a <$100 Roku was as close to free as a consumer could expect. This was because Roku was monetizing via app store fees + advertising. Even today, Roku's platform business drives ~90% of profits, while its device business drives just ~10%. Roku's massive success attracted competitors eager to compete away its profits, most notably, every smart TV brand now has its own ad network... not to mention Walmart's acquisition of Vizio... can't wait to receive my free Vizio TV this year!

Roku's strategy: loss-lead by giving away your smart TV tech for free, leverage device makers as your growth hack, monetize via advertising and app store fees.

So, who wins?

In general, the one who wins the consumer generally wins the war. The cheapest and/or most convenient approach generally wins the consumers and can throw its weight around within the industry.

However, entertainment is a weird category, where the consumer's preferences often DON'T win out – primarily because rights holders with unique IP (Disney, NFL, et al) often have even MORE leverage than consumers – and those rights holders use that leverage to drive exclusivity provisions, and the like.

The Distribution Wars are heating up... and it's anyone best guess as to who will win these wars.

Postscript (or, as the Acquired guys call it, “Carveouts”)

What I’m reading… I’ve always loved these recommendations from others whose writing I respect, so I thought I’d add the 3 most interesting things I read (or listened to) this week.

1. Matthew Ball’s exhaustive State of Video Gaming in 2025. And, if you haven’t read it yet, his comprehensive The Streaming Book (2023) is as prescient as ever.

2. Blake Hall on the Invest Like The Best podcast. Incredible vision + inspiration.

3. Same as Ever by Morgan Housel on the things that never change in a rapidly changing world.