Hulu purchased the rights of Seinfeld in 2015 for $150 Million. For the same deal after 4 years Netflix wrote a check of $400 Million. During these 4 years, neither Larry David nor Jerry Seinfeld (creators of Seinfeld) has done any new work for the show.

There are no new episodes, there is no change in background music, there is no change in the screenplay & there is no change in the people who are getting paid too.

The show moved from one streaming service to another. So with zero changes, the show moved from one streaming service to another, by increasing its value by 400%.

Media products which include TV shows, movies, documentaries, songs, radio shows, podcasts, games & even TikTok videos, are all subjects to this phenomenon.

These products could increase in value without any change to the product. To fully appreciate this phenomenon, consider products that are not media products. A car or soap or a table or a chair. Would any of these product value increase 400% with no effort in 4 years?

Therein lie the power and differentiation of Media products!

Media products can cast infinite shadows. They uniquely differ from products in general in the following ways:

Re-Consume & Zero Marginal Cost of Replication

Physical products make money by scaling production, media products make money by scaling consumption.

A given media product is not created or produced for each consumer to consume. It is created once and consumed infinite times with zero cost of replication. Almost zero in most cases.

A physical product like an automobile, a brand like Gm or Tesla reduces the cost of replication by scaling production in the form of factories. In the case of Tesla, even the cost of distribution is removed because of going direct to the consumer. But Tesla still has to manufacture a second car for a second customer. Elon Musk cannot sell the same Cyber-truck with broken glass to all the Tesla fans.

Of Course, the glass is fixed but it would still not work. Tesla still needs an assembly line, a collaboration of robot and human arms, and an unrealistic timeline to create Cyber Trucks. One each for every customer that has ordered one.

While considering the movie “The Social network” directed by David Fincher. From the time of a limited audience premier show, the same movie is shown/consumed by the worldwide audience. Fincher did not create a Social network movie for every individual audience across the world.

#media #television #ott-platforms #rest