There are only two ways to make money in business (according to Jim Barksdale, former Netscape CEO): “One is to bundle; the other is unbundle.”
The bundling and unbundling hypothesis suggests that we’re on a constant progression from integrated products, to modular, to new forms of integration, to modular again.
The media industry’s orbit serves as illustration. In the 90’s, cable networks and record labels were king: content was bundled up as a few large players owned all distribution rights. In the early 2000’s, an explosion of user-generated content along new channels like YouTube and formats like mp3 allowed for consumption of individual tracks on-demand, rendering cable subscriptions and record labels superfluous.
Today, media is in an era of re-bundling. With Netflix having 130 million subscribers and Spotify 70 million paying users, networks are king again — they just look at lot different than they did 28 years ago....