this is clearly the correct way to think about profit durability.

Power is the ability to earn persistent differential returns

Important

It's not about why one company had excellent execution, it's about why no other company with excellent execution was able to take margins or market share

Netflix is a classic scale economy business: content is fixed cost, amortized over the whole user base

Two key questions to identify why a power is powerful: benefit and barriers

Why does it make your stuff better/cheaper, and why does it stop someone else from competing away your returns

Scale economies: per unit costs decline as volume increases

E.g.

• Big fixed costs (tech, media)
• Volume/area relationships (bigger warehouses/milk jugs/etc volume increases faster than area (cost)
• Distribution density/shared routes (UPS)