Current affairs

“If the large television companies don’t listen to their customers, they’ll go out of business”

On Friday 3rd November, EAE Business School had the opportunity to interview Mitch Lowe, the co-founder of Netflix. Over the course of the frank discussion, we gained an interesting insight into aspects such as what the future may hold for traditional television and the streaming sector.

Friday, 10 de November, 2017

Netflix has “revolutionized” the way we consume series for both young and old audiences, with more personalized content in line with each user’s tastes. What does the future hold for free-to-air and cable television? Could they disappear?

In fact, it is a hotly disputed topic. It will depend on how people respond and how companies adapt to the different demands of the consumers. This was the focus of the presentation that I was invited to give by EAE Business School to celebrate the Annual Alumni Reunion. It is crazy that the big television companies are not listening to their customers. If they do not adapt or listen to the consumer, they will go out of business. They have to fight and change. People want to see a lot of content, so there is room for everyone.

The trend is changing. In future, will the Netflix catalogue include more in-house and local content?

Of course, the most important recent innovation at Netflix is that the company supports local production, a content that is shared with other countries, enabling people in different parts of the world, geographically far from each other, such as Spain and Mexico, can consume similar streaming content. The capacity for internationalization and the exchange of local content benefits consumers enormously, as they have access to great stories like those that used to be found in Hollywood classics. That is really great for the whole entertainment ecosystem, creating local content.

In a globalized world full of competition, with streaming platforms such as those offered by Disney, Apple, which is now invested in its own series, Facebook, which has its own platform, Amazon and Sky in Spain, what does the future hold for us? How do you see the market shifting?

There are loads of streaming services with their own platforms but there is room for everyone. For instance, I may subscribe to one channel with murder movies and another with kids’ content from Disney. There is a varied range of platforms on offer and that is great. Over the last two decades, a diversified selection of streaming services have emerged without any single company bringing them together in any way. What’s more, somebody can build a package that adapts to their own personal tastes. This will have the content that we like, our individual package with the content that we are interested in: the package that contains the things we want to watch.

Could we say therefore that there has been a shift from mass to niche culture?

Certainly, yes. When you go for a coffee and listen to people’s conversations, you hear them discussing their favourite series. This means that we have a varied range to choose from.  Companies focus on giving people what they want from a perspective of what I would classify as ‘one size fits all’.

In relation to the film industry, you are the founder of the startup MoviePass, which has changed its model over the course of 2017, shifting to a monthly subscription of $9.95. Although users responded positively to the change, with an increase in subscriptions, other agents in the industry did not react in the same way, such as the case of AMC’s rejection of the scheme. In your opinion, is the film industry ready to embrace an innovation like the one MoviePass presents?

You have to take the criticisms because, when you get them, it means that you are doing something right. Even if the opinions were positive, it wouldn’t alter what in reality is a good business. It is a good thing that they are talking about MoviePass because I am causing lots of problems. The sector is in decline and it is really scared of change. In fact, AMC is spending a lot of money and it knows that it hasn’t got long left.

The focus of the Alumni Reunion held by EAE Business School is networking and entrepreneurship. What tips would you give the attendees?

First of all, look for a sponsor, a suitable partner. It is also important to surround yourself by qualified people who believe in your project and know, in advance, how many problems you are going to have to overcome to be able to drive the project forward. Last but not least, prepare your family and friends to ensure they know how much sacrifice is involved when embarking on this type of venture.

What do you think of the type of reunion that EAE Business School is organizing in terms of training, and how should the education system promote networking?

Education is an essential part of our future, In the United States, Silicon Valley works in collaboration with companies and governments. These three groups have to be united in order to create opportunities and hold events of this kind at which people can see their colleagues and foster camaraderie, generate communication and give rise to enthusiasm between people located in geographically separate points. If you need partners or someone to discuss some kind of information with, this is the place to find them. This initiative is a fantastic way to continue building the future.

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