Like vertical integration isn't always bad 100% of the time, but this particular case of marrying distribution and production seems to serve minimal beneficial purpose and inevitably the main outcome is high levels of rents-collection and squeezing the people doing the actual creative work. There's pretty much nothing but up-side to forcing the two roles to remain separate.
It's probably got something to do with copyright. Like the way it interacts with markets makes this sort of arrangement net-harmful pretty much any time you see it.
> It's probably got something to do with copyright. Like the way it interacts with markets makes this sort of arrangement net-harmful pretty much any time you see it.
I would say it is monopoly.
If you are a luxury brand you may sell your pen in a brand store only and limit access and will have some business.
But other companies will produce comparable pens and then your only moat is the brand identity but in all objective criteria the other pens are equal.
With intellectual work you got the monopoly. If I want the Taylor Swift song I don't want Lady Gaga, even though both may be good. If I want a Batman movie, I don't want Iron Man. These products aren't comparable in the same way. And another vendor (studio) can't produce an equal product in the same way as with the pen example.
The physical world equivalent would be if Porsche didn't sell their cars, they only leased and rented them, and the lease terms didn't allow subleasing or renting it out, or even letting someone else drive it. And there were no wholesale or reseller agreements to allow other dealerships or rental companies to lease or rent them out.
If Porsche were to do that, a lot of customers would probably switch to BMW or Audi instead. But with Movies and TV, competing products are less fungible.
Imo, vertical integration is always great in the short term but it's a problem because in the long term it prevents competitors from getting a foothold.
The thing to understand is that the benefits of competition isn't price. It's innovation. Sometimes that innovation is how to make a component cheaper but other times it's new components. The iPhone was not the cheapest phone when it was released.
It's probably got something to do with copyright. Like the way it interacts with markets makes this sort of arrangement net-harmful pretty much any time you see it.