Netflix vs. Amazon, and the New Economics of Television

It’s been a busy week for the companies in the business of trying to revolutionize how we watch television.Netflix struck a deal to make its video streaming service available through set-top boxes offered by three cable companies; said it would raise its prices for new customers; and publicly objected to a planned merger of Comcast and Time Warner Cable. HBO struck a deal to offer its shows on a formidable Netflix competitor, Amazon Prime. Oh, and while we’re at it, AT&T and the Chernin Group said they would introduce a new, $500 million venture to compete in the same crowded market.To make sense of the changing tides of media (and especially television) economics, remember this simple idea: To be successful in the evolving world of media, a company needs to control either the content, or the pipes. If it has neither, it’s a mere middleman, consigned to low or no profitability.

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