After Apple and AT&T, we can now add Discovery, Disney, Comcast, ViacomCBS, Quibi, and yes, even Spotify to the list

OTT streaming

Summary of Newsletter #218

Last week we saw evidence of how Disney, ViacomCBS, and Discovery were reverting into Curse of the Mogul form in their pivots to OTT streaming services; and, Quibi and even Spotify(!), which are platforms and not legacy media companies, also slip into Curse of the Mogul territory.

This mailing is Part One of two mailings. I started writing about how the past week surfaced many The Curse of the Mogul-type developments in the marketplace. How CEOs were behaving in The Curse of the Mogul-type ways reminded of a passage from Ben Horowitz’s The Hard Thing About Hard Things, and it serves as a valuable contrast to better understand their decision-making.

1. Overview

Two weeks ago, I wrote about how both HBO Max and Apple TV+ were engaging in Curse of the Mogul-type behavior in the marketplace, and how that contrasted with Spotify’s investment in Joe Rogan. I argued:

Ultimately, it is the contrast between HBO Max and Apple TV from Spotify which makes this past week in streaming so notable: the Curse of the Mogul helps to tell us that we have two major streaming services that do not understand how and why their target customers consume content. Moreover, they have poorly defined their sales conversion funnels at the expense of driving new subscribers and/or retaining their customers. They have done all of this despite investing billions in libraries of old and new, original content.

Last week delivered more headlines and developments that reflect The Curse of the Mogul, a key theme of my writing, than I could have imagined.

The Curse of the Mogul is about how “CEOs believe the media industry involves managing creative talent and artistic product”, and therefore the media industry “is not subject to appraisal using traditional strategic, financial or management metrics.” For this reason, the “curse” ends up being for shareholders, who often see content creators reap greater returns than they do.

It is a helpful lens in 2020 because its emphasis on the intangibility of managing creative talent serves as a helpful contrast to the reliability of subscription models for driving growth and reducing churn on emerging platforms.

So, needless to say, we should not be seeing Curse of the Mogul-type behavior from legacy media companies and streaming services in 2020. It would imply they are not building out services that can reliably generate recurring revenue streams and keep audiences from churning out, or “pause” their accounts.

2. First common theme: an emphasis on intangibles of creative library

Last week we saw evidence of how Disney, ViacomCBS, and Discovery were reverting into Curse of the Mogul form; and, Quibi and even Spotify(!), which are platforms and not legacy media companies, also slip into Curse of the Mogul territory;

  • Discovery saw the head of its Global Direct-to-Consumer unit resign at a time when CEO David Zaslav is selling its investment in its interactive platform to shareholders;
  • Disney+ started getting public complaints about its user interface (UI) from one of its biggest advocates, and the problem can be directly tied to Bob Iger’s decisionmaking about the UI;
  • The data from Comcast’s initial test of NBCU’s Peacock revealed some problematic outcomes, while NBCU’s new head Jeff Shell got a big profile in the Wall Street Journal;
  • ViacomCBS CEO Bob Bakish laid out a “super service” version of CBS All-Access to investors at the Credit Suisse Annual Virtual Communications Conference, and the amount of content and user experiences (sports1 TV shows! movies!) just sounded so unwieldy as a value proposition;
  • Quibi’s story continued to deliver the schadenfreude last week, with Founder Jeffrey Katzenberg selling that “Quibi is poised for a rebound in the second half of 2020 as states reopen more fully”, despite strong evidence that they do not have a viable proposition; and,
  • Last, after Spotify delivered a Curse of the Mogul-type announcement of signing Kim Kardashian for a podcast about criminal justice, and another announcement that it will be exclusively producing and distributing an original slate of scripted podcasts with DC Comics and Warner Brothers.

3. A second common theme: a lack of urgency

In reading all these headlines, I kept on thinking of Ben Horowitz’s The Hard Thing About Hard Things, a book with his advice based on his experiences building and running a startup. The uncertainty these media and telecom companies face in their pivots to streaming services reminded me of the uncertainty Horowitz faced of his pivot of Loudcloud, a cloud hosting company, into Opsware, a cloud-hosted software as a service company.

I specifically remembered a moment when Horowitz was faced with “a losing product, a dwindling stock price, and a tired team”; and, at that moment, he knew Opsware was “in trouble.” A pivot meant abandoning the cloud business when “440 of our 450 employees worked in the cloud business, which represented all of our customers and generated 100 percent of our revenue.” He wrote the following about how he spoke to his team after three new clients they had lined up after a previous crisis were “fading away”:

After all that we had been through, how could I ask the team to charge up yet another impossible mountain? How could I muster the strength to do it myself?

I felt like I had no more stories, no more speeches, and no more “rah-rah” in me. I decided to level with the team and see what happened. I called an all engineering meeting and gave the following speech:

“I have some bad news. We are getting our asses kicked by BladeLogic and it’s a product problem. If this continues, I am going to have to sell the company for cheap. There is no way for us to survive if we don’t have the winning product. So, I am going to need every one of you to do something. I need you to go home tonight and have a serious conversation with your wife, husband, significant other, or whoever cares most about you and tell them, ‘Ben needs me for the next six months.’ I need you to come in early and stay late. I will buy you dinner, and I will stay here with you. Make no mistake, we have one bullet left in the gun and we must hit the target.”

Click here to read the rest of the mailing.

Monday AM Subscriber


Curated “earthquakes”, key stories, and blog posts from the previous week which prepare you for your Monday am meetings.



Analysis that ties the big picture of the streaming marketplace to executive and investment decision-making at streaming companies

Downloadable reports and whitepapers

Subscribe annually for $499/year


Contact Us

Contact us to learn about our Elite plan, which includes consulting (1-hour meeting per Quarter) and our exclusive off-the-record meetings and presentations with C-suite and senior executives