Welcome back to This Week in Stratechery!
Last week we announced Sharp Text, a new site featuring weekly posts from Andrew Sharp, my Sharp Tech co-host, and the host of Sharp China and Greatest of All Talk. Now you can also receive Sharp’s posts via email: just add Sharp Text by clicking here.
On that note, here were a few of our favorites this week.
- The Cost of Resiliency. Stratechery has, over the last 12 years, documented how many of the founding assumptions of the Internet were wrong: when there is zero friction, the end result is not a thousand flowers blooming, but massive Aggregators sitting atop virtuous cycles that centralize demand and supply into too-big-too-fail entities. This dynamic is one that applies broadly: when things get easier, economies of scale come to dominate; this means the big get bigger, and our collective resiliency gets smaller. In Resiliency and Scale I gave three examples of this phenomenon in action: AWS’s US-East-1 failure, China’s rare earth export controls, and the toxic COVID information environment. There is hope, however: our information ecosystem is healthier than it has been in years; the harsh reality is that required Elon Musk to destroy a huge amount of enterprise value. — Ben Thompson
- F1 Makes It Official with Apple. F1 and Apple had been circling one another for months, and last weekend the news became official: Apple outbid the competition by anywhere $60-$80 million per year and will be the exclusive home of F1 in the United States beginning with next season. It’s the biggest sports deal Apple’s ever done, but is this a smart move for a sport that’s spent the past five years trying to grow its footprint in the U.S.? Conventional wisdom would say no, because leaving the massive distribution channel on ESPN (the current rights holder) for a niche streaming player narrows the funnel to acquire new customers. Ben’s Update on Tuesday reaches a different conclusion and actually changed my mind on the deal. In short: Apple’s fees were too rich to turn down, and given the unique characteristics of F1 and its audience, there may be more upside to partnering with a streamer than one might think. — Andrew Sharp
- A New Era for NBA Broadcasting. The NBA returned to NBC on Tuesday night and the broadcast was met with rapturous praise. On Friday, Amazon Prime Video will debut its own NBA broadcast. These changes have been telegraphed since last year, but the shift is even better news for the NBA than I realized when the deals were first announced. At Sharp Text this week I explain why the celebrations are warranted and outline all the ways ESPN’s coverage for the past 10 years had become an obstacle to mainstream appeal for the NBA. De-emphasizing the centrality of the Worldwide Leader in selling the NBA to the masses will be very healthy for the league, and who knows? As Ben noted at the top of Sharp Tech, Inside the NBA is on ESPN now, and Charles Barkley might just redeem those broadcasts, too. — AS
Stratechery Articles and Updates
- An Interview with Asana Founder Dustin Moskovitz about AI, SaaS, and Safety — An interview with Asana founder and Chairman Dustin Moskovitz about Asana, AI’s impact on SaaS, and the debate about AI Safety.
- F1 on Apple TV, Distribution as Differentiation, A Worthwhile Gamble — F1 is officially on Apple TV, and it’s both a worthwhile gamble on Apple’s distribution being a differentiator.
- Resiliency and Scale — Decreasing transportation and communications costs increases resiliency in theory, but destroys it in practice. The only way to have resiliency is through less efficiency.
- Netflix Earnings, KPop Demon Hunters and Netflix Hit Production — Netflix’s growth will depend on advertising; then, more evidence that Netflix was uniquely responsible for KPop Demon Hunters’ success.
Sharp Text by Andrew Sharp
- The NBA’s ESPN Problem Might Finally Be Over — On the NBA’s debut on NBC, everything that made ESPN disappointing as the league’s flagship broadcaster, and a new era that looks more promising.
Dithering with Ben Thompson and Daring Fireball’s John Gruber
Asianometry with Jon Yu
Sharp China with Andrew Sharp and Sinocism’s Bill Bishop
Greatest of All Talk with Andrew Sharp and WaPo’s Ben Golliver
Sharp Tech with Andrew Sharp and Ben Thompson
This week’s Stratechery video is on Sora, AI Bicycles, and Meta Disruption.