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It's for the same reason that movie distributors don't bypass theaters by selling directly to the public. Originally, it was hard to distribute cars, and car manufacturers didn't want to make the investment to open little retailers everywhere. So they offloaded the risk and capital requirements to third parties, who could customize themselves to the markets they were in (what inventory to carry, where to locate, how to advertise, etc). Then those dealerships became their main (only?) source of revenue. Now they're beholden to their main sales channel. If they started selling cars directly, the dealerships revolt (like a labor strike - what do they have lose here?) and cut them off from revenue for a month. Similarly, theaters very explicitly refuse to show movies that are directly release to the public, which means, for the moment, that those movies won't make any money, and thus movies aren't released that way.

That's a scenario no upstart car company would ever enter into willingly, so Tesla of course didn't. And eventually, companies like Tesla will increase the pressure on all car companies to sell directly, and the dealership cabal will collapse. But in the meantime, that's a lot of tied hands.

Adding legal barriers through lobbying makes all of that worse, of course.



It's for the same reason that movie distributors don't bypass theaters by selling directly to the public.

Your understanding of the history of movie distribution as it relates to theater ownership isn't quite right. You can read up more here: http://en.wikipedia.org/wiki/Block_booking

In a nutshell, distributors (i.e. movie studios) owned the major theater chains until 1948, when the Supreme Court demanded that theater production and distribution be separated from exhibition (i.e. theaters).


Thanks. I guess I didn't mean to suggest the history was the same (I know almost nothing about the history of theaters), just the current situation. So sorry for the poor paragraph organization. I will stand by my assessment of the status quo, though. I remember a few years ago, theaters refused to show a Soderbergh movie because it was being released simultaneously on DVD and the theaters.

Not a great article, but here's a reference: http://www.techdirt.com/articles/20060118/195200.shtml


There is no such thing as "companies like Tesla." Anyone can manufacture an EV, and soon everyone will.


Er, that Tesla sells electric cars is not the point at all. The point is that they have a different--and more attractive--distribution model. Any reason for creating a new car company would create another company that chooses not to build a dealer network.




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