General Question

lsaulnier's avatar

What makes a distribution business successful?

Asked by lsaulnier (1points) August 7th, 2010

Like Hulu how do you work with content partners- what makes the distribution factor interesting to abc NBC and fox? better distribution, more…?

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1 Answer

weeveeship's avatar

Network externalities: the more users use a resource, the more valuable the resource becomes

Ok, so let’s say that I use Hulu to watch a clip of Family Guy (FOX? Let’s assume it is). I then tell all my friends how cool the clip was. My friends might then go on Hulu. They watch Family Guy and also watched a Futurama (FOX? Assume it is) clip, which they also found interesting. So, FOX now hosts two of my friends’ favorite shows.

Another key point about distribution businesses is that they should not cost too much. Intermediary costs are one reason why producers shy away from distributors. Hulu is good in this regard. It costs very little to upload a video.

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