Yet another way to recognize power is the intentional foregoing of selling your product to customers in order to capture market power elsewhere, or what is known as vertical foreclosure. This is most apparent in the new service Disney is rolling out called Disney Plus, which will bundle all of Disney’s massive trove of content into a Netflix-like bundle. In some ways, this looks like [Disney CEO Bob] Iger’s end game in the strategy for global dominance. Disney can produce must-have branded content, force theaters to show all of its branded content, and then leverage that across its global network of theme parks and its dominant streaming service. It is vertically integrated from production lot to the end consumer.
Iger’s strategy is to do what Netflix is trying to do, except with more raw power. Netflix’s strategy is to produce so much content and sell it at a loss through subscriptions, in the hopes it can drive its competitors out of business. One it has a large base of subscribers and no competitors, it can then raise prices on its subscribers (as it is doing in the U.S.) and pay its talent less money. Where else are they going to go?
Matt Stoller on.
The whole article is worth reading and, yeah yeah, no ethical consumption under capitalism and all that, but…