![]() ![]() I think this is extremely important, because when you think about why this was able to occur, which gets into the second part of this answer, cable was this beautiful, socialistic almost experiment, right? It was this idea that you wanted your competitors to perform extremely well. The biggest part about this is that when you look at the extremely low capital intensity of the cable system, the cable bundle that was happening within these companies, the revenue that they were actually seeing compared to the investment-when you look at industries like oil, when you look at industries that have much, much larger investments based on what they’re trying to bring in revenue-cable is printing money. This is in comparison, if we think about it, to about an average of 15 percent margins in the entire economy when we look at these different sectors. So when we talk about all these players that we’re going to get into within the streaming wars, the Disneys, the Paramounts, the Comcast within the NBCUni, they’re looking at insanely high EBITDA margins. If you look at the core of that business, this is a business that had EBITDA margins of nearly 40 percent on a weighted average basis among the six largest cable companies. Julia Alexander: There’s almost a two-pronged answer to this, but I think in order to get into the second part, first we have to lay out some of the facts of the first part. ![]() Why is that business, the existence of cable television, so important and so lucrative for the entertainment companies that are somewhat struggling with the Netflix revolution today? This is the peak of cable, the peak of pay TV. So take us back to the 2000s, right up to 2010. I think it’d be useful to tell a story here of how we got to this moment, and I think that story begins in the years just before the Netflix streaming revolution, just before House of Cards and Netflix really establishing itself as a for original programming. If you have questions, observations, or ideas for future episodes, email us at You can find us on TikTok the following excerpt, Julia Alexander breaks down the advantages of cable TV and why some digital streaming services are struggling today.ĭerek Thompson: So, in the introduction that listeners just heard, I went on a little rant about how it just seems like everything in Hollywood is collapsing at the same time. We discuss a brief history of Hollywood, how we got to this point, how Disney’s plight in particular tells a story of how streaming has roiled this town, how the strikes fit into this picture, and what these companies should do now. How did this happen? And could it get worse before it gets better? Today’s guest is Julia Alexander, director of strategy for Parrot Analytics and a writer with Puck News. How does everything seem so bad at the same time? The domestic box office is still in a recession. The trouble brewing in the media and entertainment industry has become one of the most interesting-and truly perplexing-business stories in the world. ![]()
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