What is The Curse of the Mogul framework?
This framework highlights instances where media company CEOs may be rewarding content creators at the expense of shareholder value.
It is based off of the 2011 book of the same name. The book focuses on the problem of legacy media CEOs who pursue creative businesses that they believe are not subject to traditional strategic, financial or management appraisals. As a consequence, media companies may reward content creators at the expense of shareholder value.
A company does not disclose its subscriber numbers in quarterly earnings, or it simply obfuscates the metric, while its competitors are disclosing those numbers.
How does The Curse of the Mogul framework work?
Direct-to-consumer business models have clear metrics like growth and churn, and key metrics like content spend.
The Curse of the Mogul framework helps to identify the “right” types of disclosure. It is most useful to flag when a CEO talks up intangibles like content spend and talent, but does not disclose how investors will be rewarded.
Real World Example
The Curse of the Mogul symptoms are evident at Amazon Prime Video. There is no direct or calculable return on investment (ROI) on billions in Prime Video spend. The board and investors are actively asking about and objecting to the content spend, even if they buy into Chairman Jeff Bezos’s vision for Prime Video.
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