Mitch Lowe: video industry stalwart
He was President of the rental chain Video Droid for 14 years from 1984, before becoming the founding Vice President of Business Development for Netflix, the original business model of which was mailing people DVD rentals.
More recently, he was the CEO of the troubled cinema ticket subscription service MoviePass, the eventual failure of which was one of the many topics we covered.
I asked him for his overview of how the video rental/access industry had evolved over the decades:
“It really started out, even going back to the early days of cinema, in a kind of à la carte model, where people had to make a decision on whether going to the movies or renting a VHS or a DVD was worth it.
“It evolved into a subscription, which did all kinds of positive things: it took away that tough decision of ‘Is this worth my time and money?’ to exploring content and getting exposed (to the content).
I asked him about his role as one of the founding executives of Netflix:
“We had no idea that we would be a household name. No one knew Netflix would become a verb.
“I remember we used to make bets on how big we could get. I said ‘God, if we could just get to 1.7 million subscribers, that would be amazing’.
“And of course, today it’s a hundred times that: 180 plus million.”
“We never ever looked at the competition. We never, ever – except once – even evaluated the competitor.”
That exception was in the UK:
“We heard that Amazon was coming in and that was the one competitor that terrified us in those days.
“And so we closed down the whole operation.”
Mitch didn’t manage to duplicate the spectacular success of Netflix with MoviePass:
“I thought we could do the same in cinemas that we did at Netflix, which was take away the barriers of experimentation and (allow) discovery.
“And lo and behold, it grew too fast. We grew in eight months (to) three million paying subscribers and it was just too much.
“So we imploded at nine months into it. Our investors said, ‘OK now, no more’. What I should have done was controlled growth.”
The American news technology website The Verge believed MoviePass’ business model was predicated on the gym model – that most subscribers wouldn’t actually use the service regularly, in the way that gyms use no-show subscribers to financially offset their heavier users.
But as The Verge’s Nick Statt commented: “people like movies more than they like going to the gym.”
Many MoviePass subscribers attracted to the new service by the lower price began using it frequently, impacting on the company’s viability.
COVID-19’s impact on the entertainment industry
I asked Mitch how he thought the COVID-19 pandemic had impacted on the entertainment sector.
He said he was optimistic that the effect wouldn’t be permanent:
“I’m hoping (movie) theatres will at least come back and understand that they need to evolve.
“MoviePass was an attempt to try to shake up the cinema, to understand consumers need more than movies.
“Our attention span is getting shorter and shorter. We don’t want to go into a theatre and sit for two hours in the dark and watch a movie.
“Why not have ‘Binge Thursdays’ where you can watch all of the ‘Stranger Things’ episodes for six hours?”
Ultimately though, did Mitch think that cinemas could survive this? The romanticism of going to the cinema is all well and good, but is it enough to keep them financially afloat?
“Well, I think they have to be innovative in the content and I think it all comes down to recognising people _do_ want to get out and interact socially in big groups, assuming there’s (going to be) a vaccine.
“But they don’t want to just see two-hour movies. Why not have sporting events? Why not have gaming events?”
I asked him how important the industry was in the Middle East and, in particular, the UAE and Dubai.
“One of the greatest things that I see with streaming sites like Netflix is this cross-pollination of content.
“And I think with all the youth and all the creative content makers in the Middle East, there’s the ability to grow a big industry of really interesting TV shows and movies that could be popular anywhere!
“And so it really comes down to allowing the creative community to create content – and distribute it.”
Pitch Up In The Sky
We turned to discussing Pitch Up In The Sky, the exciting event that’s brought Mitch to Dubai:
“It’s a record-breaking event. There are entrepreneurs from all over the Middle East and Africa who have submitted their proposal for seed capital.
“There were four of us as judges and we narrowed it down to a group of ten.
“And then we had each of them give their pitch on a Zoom call.
“We brought that group down to three and brought those three up on a plane with us, for them to give their final pitch!
“In fact, they’re giving their final pitch in a 60-second drop from the sky! So the winner will end up jumping out of the plane.”
Advice to entrepreneurs
I asked Mitch what advice he’d you give to those entrepreneurs in terms of what it takes to actually make it:
“Perseverance and getting good people around you, high integrity. You have to keep (up the) momentum. You have to keep improving.
“Bringing your investors along, bringing your team along a little bit. And not going too fast or too slow.”
The future of the entertainment industry
Finally, I asked Mitch the million dollar question: what does the future hold for the entertainment industry?
“COVID has increased people’s consumption of entertainment. And, you know, it’s I think it’s helped people live through this very difficult time.
“I think the future is really healthy. I don’t know about you, but I’ve had times where I started watching a series at 10 o’clock at night thinking ‘I’ll be done at midnight’ – and then five hours later, I realise there’s a whole other season!
“And so I think at a certain point we reach a breaking point. Reed Hastings (Netflix’s CEO) was asked one time about competition and he said: “my biggest competitor is sleep”.
“If people just didn’t have to sleep, they could consume more Netflix series!
“I think he’s right.”