Thread by @trengriffin

How does this impact HBO Max's unit economics? How much are customer acquisition cost (CAC) and cost of goods sold (COGS) impacted? The former is about acquiring new customers.

"Wonder Woman 1984 won’t cost anything beyond the monthly subscription fee." theverge.com/2020/11/18/215…

Mufasa: "Simba, what is CAC for HBO Max without this decision to offer Wonder Woman to subscribers at no extra charge? What's CAC for Disney Plus, and Netflix? What is monthly churn?"

Simba: "Dad do you ever stop thinking about unit economics?"

Mufasa: "This is what kings do."

Simba: "HBO Max has 6M subscribers. Disney Plus, which launched a year ago, has 73M. AppleTV Plus has a reported 34M."

Mufasa: "Content can be effective CAC. Giving up some WW theatrical revenues is sleeves off their vest. No extra charge for WW, isn't." fastcompany.com/90576026/can-w…

Simba: "Why doesn't HBO Max charge for Wonder Woman 1984 like Disney did with Mulan? Higher ARPU..."

Mufasa: "That would send churn and CAC higher. All....

Simba: "...unit economics variables are interconnected in the great circle of life."

Zazu: "He's getting it Mufasa."

5/ Mufasa: "My son, the great kings like John Malone understand what a genuine gross addition is."

Rafiki: "Anyone who reads Variety knows HBO Max rolls up all subscribers who are eligible to get it — even if they haven’t watched it. Non-users churn." variety.com/2020/digital/n…

6/ Simba: "Malone gets the power of scale. He said today:

'in addition to content, only the platforms, like Roku, are in pretty good position to build a long-term profitable global business.'

When he said wholesale in the interview I thought: WTPP!"

cnbc.com/2020/11/19/joh…

7/ Simba: "I've read Tren's posts on John Malone. I get wholesale transfer pricing power."

Mufasa: "You must understand the cost of distribution. Reed Hastings releases valuable content to reduce CAC and churn on every day that ends with the letter Y." 25iq.com/2014/11/02/a-d…

8/ Rafiki: "The easiest person to fool is yourself when it comes to unit economics."

Mufasa: "Malone was saying in the interview: you need to saddle up to the cost of CAC or get out of the game."

Zazu: "Scale creates self reinforcing feedback loops!"cnbc.com/2019/11/21/lib…

9/ Nala: "Roku shares closed at a new record high of $255.67, up more than 10% for the day, on whispers of a distribution deal with HBO Max and a firm endorsement from John Malone." deadline.com/2020/11/roku-s…

Pumbaa: "Roku will keep its focus on distribution and advertising."

10/ Mufasa: "If the platform can capture a large enough global scale of consumers who are essentially using it as a bundling agent—as an intermediary— they’re going to have market power over suppliers of the content." nexttv.com/news/that-time…

Simba: "Value chain analysis! WTPP!"

11/ Rafiki: "Malone said he invited Reed Hastings to a Liberty board meeting and he assured everyone he had no intention of producing his own content. Malone responded by calling ‘bullshit’ and said 'It was clear where you are headed. If you don't understand it now, you will.'"

12/ Simba: "A direct relationship is valuable if the business steps up to spending on customer acquisition."

Mufasa: "Not paying to acquire customers isn't an option for a real-world business. Everything is interconnected. " 25iq.com/2018/06/02/pro…

cnbc.com/2020/11/20/ama…

13/ Rafiki: "It is easier to solve business model challenges if you assume that customers will be acquired at scale by the tooth fairy. Scar did that which is why he isn't king."

Mufasa: "Disney's low CAC is remarkable but it isn't zero. That happens only in cartoons and games."