Distribution is going to continually move the customers closer to content creators.
We went from a system where the cable companies were the only distribution game in town. You paid the cable company, the cable company paid the channel provider, the channel provider paid the network/studio. Now we are starting to see the channel providers take out the cable company to stream straight from them. You still have to pay for physical distribution, but the competition is completely on the pipe, not the content. But the content distribution is still controlled by the channel providers, who have the customer relationship (Netflix, HBO, Prime Video, etc.
The channel providers see the writing on the wall, though. How much money did HBO make from Game of Thrones? Netflix on Stranger Things? A TON. Channel providers are now starting to become studios. And, they make some of the best content.
But why do the studios need the channel providers? How long is it going to be before a guy like Taylor Sheridan decides to drop Paramount and start his own studio and charge customers directly? If you don't know who Sheridan is, he is the driving force behind [among a few others]:
- Yellowstone
- Yellowstone: 1883
- Yellowstone: 1923
- Yellowstone: Marshals
- Mayor of Kingstown
- Tulsa King
- Lioness
- Landman
A-listers who have acted in his series:
Kevin Costner
Nicole Kidman
Morgan Freeman
Billy Bob Thornton
Harrison Ford
Kurt Russel
Sylvester Stallone
Sam Elliott
Jeremy Renner
Why does this dude need Paramount? If Sheridan Studios asked me to pay $5/mo for access to his content, I would buy it. I just finished Lioness (girl power, but really good), loved Yellowstone, Tulsa King was fun as a guilty pleasure (but Stallone is getting really, really old), and I'm looking forward to The Madison when the girlfriend finishes teaching at the end of the school year.
And, this is a trend that is happening in sports too. SEC network is distributed by ESPN, but we don't really need them. We make lots and lots of money with our TV deals because we handle so much of the production costs. Again, the trend of moving the customer closer and closer to the content creator. I don't see this trend stopping anytime soon.