1. “Barriers to entry” in the media industry: the launching of El Español and Netflix
Francisco J. Pérez-Latre
Alfonso Sánchez-Tabernero
Gustavo García-Mansilla
Media Management Department
University of Navarra (Spain)

2. RATIONALE: THE DEMISE OF ENTRY BARRIERS
The demise of barriers to entry in media markets
Legal barriers tend to disappear
The effectiveness of economies of scale decrease spectacularly
Finding good research questions and learn about “new entry barriers” by studying new entrants
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

3. METHODOLOGY AND RESEARCH QUESTIONS FOR A WORK IN PROGRESS
We use a narrative theoretical approach to learn about innovation and “barriers to entry” in our industry
Case-study research about the first months of new market entrants
Our research question: once the environment of “restricted competition” has blurred what will be the next “barriers to entry”?
An in depth-look to these new market entrants sheds some light, although news and entertainment markets appear to be different
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

4. BUILDING ON OUR WORK ON INNOVATION IN THE LAST 5 YEARS
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

5. EL ESPAÑOL AND NETFLIX ENTER THE MARKET
October 2015: Netflix & El Español enter the market
El Español after a quite impressive 3.6 million euro crowdfunding drive
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

6. EL ESPAÑOL AND NETFLIX ENTER THE MARKET
October 2015: Netflix & El Español enter the market
Netflix, a giant global player that aims to reinvent television. Already studied: (Evens, Urgellés & Herrero)
Reed Hastings (2016): “Today you are witnessing the birth of a new global Internet TV network.”
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

7. An interesting contrast
NETFLIX & EL ESPAÑOL
An interesting contrast
Spanish-owned new brand dedicated to opinion and news gathering
Versus global strategy of an American entertainment brand that is well established in the US and other markets
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

8. NETFLIX & LEGACY TV
“For us the arrival of Netflix is not a threat at all, in fact it’s a great opportunity for doing new businesses. Before they started their operations in Spain we had already sold them more than two million euros in local contents, mainly fiction and series, as they need to have local contents in local language to be appealing their new clients. We expect to continue doing business with them in this direction in the near future”
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

9. NETFLIX ENTERS THE MARKET: REACTIONS
…while direct competitors showed respect:
“Experts criticize the short list of contents that Netflix offers to the market when they come into a new market. But the truth is that even being short they have everything they must have, giving much more with less. Spain has not been an exception”

10. WHEN NETFLIX ENTERS SPAIN’S MARKET
Proven WTP for quality contents from local clients (Spotify, iTunes, Amazon Kindle among others are well established)
Growing time spent consuming contents on digital platforms
60% of audience
Full season (13 episodes)
In only seven days
Binge viewing puts into value the desire to consume contents as fast as possible, which allows suppliers to capture audiences’ attention in a short period of time, leaving other suppliers out of the game and gaining loyalty from customers. Source: Telefonica, Press Conference, November the 26th, 2015.
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

11. Innovative organizational culture
NETFLIX ENTERS SPAIN
Innovative organizational culture
Open to share revenue with content suppliers
Global vision
Flexible: Beta phase
Focus (no sports, no live events, no premieres: only series and movies). “We only do some things, but do them very well”
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

12. EL ESPAÑOL, BUT… SOME GOOD NEWS, SOME CHALLENGES. 5,2 MILLION
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

13. EL ESPAÑOL, SOME GOOD NEWS, SOME CHALLENGES
Difficulties to increase the number of subscribers beyond the crowdfunding drive
80 per cent of visits coming from mobile browsers and tablets: no paper needed
Display advertising is very limited, they say, because of their mobile intrusiveness "we don't do anything that pops up and covers the screen
Hoping to find new avenues for monetization through Instant Articles
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

14. EL ESPAÑOL, GOOD NEWS, SOME CHALLENGES
Focus on community building
The market has been shaken, with El Pais.com making major strategy changes
But page views and unique users could mask light engagement
15,000 after crowdfunding, around 2,000 after the launch
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

15. EL ESPAÑOL, GOOD NEWS, SOME CHALLENGES
"I think it's not that easy to pursue both high traffic and subscriptions.“
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

16. DISCUSSION: THE NEXT BARRIERS TO ENTRY?
If “barriers” are completely gone, it will be difficult to sustain competitive advantages: market uncertainties will only grow
Industrial, legal and financial barriers seem to have lost weight
But hat about “intangible barriers”? brands, reputation, trust, creativity, team spirit, leadership, relationships, ability to innovate, community building
Along those lines media brands could establish a new type of “barriers to entry”, the assets that will define the options of media companies for the future
Conference of the European Media Management Association (EMMA) 2016
Faculty of Arts, Porto University, June

17. THANK YOU!
Francisco J. Pérez-Latre @perezlatre
Alfonso Sánchez-Tabernero
Gustavo García-Mansilla @gggmansilla