What makes a distribution business successful?

Network externalities: the more users use a resource, the more valuable the resource becomes

Ok, so let’s say that I use Hulu to watch a clip of Family Guy (FOX? Let’s assume it is). I then tell all my friends how cool the clip was. My friends might then go on Hulu. They watch Family Guy and also watched a Futurama (FOX? Assume it is) clip, which they also found interesting. So, FOX now hosts two of my friends’ favorite shows.

Another key point about distribution businesses is that they should not cost too much. Intermediary costs are one reason why producers shy away from distributors. Hulu is good in this regard. It costs very little to upload a video.