2017 MBA@UNC Global Immersion: New York City Day One
MBA@UNC Global Immersions are offered four times a year as unique opportunities for students to travel to major domestic and international business destinations with their fellow classmates, participate in engaging discussions with their professors and elite industry leaders, as well as apply what they have learned to real-life problems.
NEW YORK—In 2012, Spotify CEO Daniel Ek was thinking differently about the future of digital music. The industry largely blamed piracy after global revenues plummeted from $38 billion in 1999 to less than half that in 2012.
“It’s not that people don’t want to pay for music,” Ek told PandoMonthly that year. Rather, Ek had realized that “quite often, convenience wins.”
In the first session of the digital media tracks at the MBA@UNC Immersion here, about 80 students heard from Jed Simmons, entrepreneur-in-residence and professor of the practice at UNC-Chapel Hill. Simmons, formerly the Global Head of News Content Partnerships for YouTube, walked students through a case study about Spotify to examine how that focus on convenience and consumers has helped the company’s continued success.
In 2012, Spotify doubled its revenues to $577 million, and nearly doubled its users. This week Spotify said it brought in more than $3 billion worldwide in 2016—a 52 percent rise from 2015 and nearly half of last year’s total global streaming revenue of $7.6 billion, according to Forbes.
Simmons also brought in a guest, Spotify’s global head of business development Jorge Espinel, who told the students that “consumers are insatiable” in their desire for new features and inputs.
In an interview, Simmons said he was hoping to introduce a group of students to the business of digital media today in the session called “Digital Media Innovation, Entrepreneurship and Disruption.”
“Most people in this room are not in that space, but they’re all consumers of digital media,” he said. “I just want them to be able to meet a leader, and take a look at some incredible companies that are leading and disrupting.”
As the class began, Simmons asked students to name a company that came to mind “when you think digital media innovation and disruption.” Answers ranged from Amazon, Apple and Netflix to Snapchat, Facebook and LinkedIn.
“Why not Buzzfeed, why not HBO, why not the NBA?” Simmons asked.
“Disruption is all around us,” one of Simmons’ slides read. “Mobile is overtaking desktop, social is beating search, on-demand is undercutting TV, messaging apps are challenging email, and everything around us is becoming connected.”
He used ESPN as an example of a company that changed its original strategy to take advantage of the technical revolution of the last several decades. ESPN’s founders started the company as a way to bring University of Connecticut sports to fans across the state. But because of transponder and satellite technology, they realized they could play on a bigger stage. The Entertainment & Sports Programming Network was born to bring movies and sports to the cable-paying masses. Eventually sports won out, and ESPN “became the most valuable sports brand in the world,” Simmons said.
Lisa Steward, a product manager with a marketing background at a health care company in Los Angeles, said in an interview that she attended the session “to learn more about what others are doing, what digital media platforms others are using, and new strategies.”
“The NBA was a great example—in the future they will have to move to being online,” she said. “Companies will have to evolve, just like stores moving from brick and mortar to online.”
Another session for those in the digital media track was called “Data-Driven Creative: The Marriage of Data and Creative Messaging.” Students in the finance track could also choose from two sessions on the first day, “The Links Between the Global Economy and Financial Markets” and “Corporate Valuation: A Primer to Wall Street Valuation Methodologies.”
Before the day’s sessions began, Gary Parr, Senior Managing Director and Co-Chair of the Management Operating Committee of Apollo Global Management, LLC and chairman of the UNC Parr Center for Ethics, gave the keynote address, “From Carolina to Apollo Global Management.”
Noel Hoxha, an internal consultant for Boston Consulting in New York City, said he appreciated Parr’s point that history does indeed repeat itself, but in unique ways each time.
“He used the example of the 2008 financial crisis actually happening in the 1900s, too,” he said. “It’s good to be cognizant of history with the digital revolution we’re experiencing now.”
Shoshana Rosenberg, an attorney for a professional services firm in New York City was also impressed with Parr’s keynote.
“Regardless of what path you want to take with your career and MBA, Gary Parr is the embodiment of investing in one’s career,” she said. “That spoke to everyone who attended.”
David Shams, who works for a construction sub-contracting company in Washington, DC and just began the MBA@UNC program in October, said Parr’s speech “helped set the tone for the weekend.”
“You think this is an online program and aren’t sure what to expect,” he said. “But we get a world-renowned expert to start the weekend, followed by really great speakers. It really shows that this is a world-class program.”
Back in the Spotify class, Simmons and his students discussed the changes to the media landscape brought about by better broadband, mobile and sharing technologies. The biggest changes are occurring, he said, because content creators have access to simpler and more powerful tools, and because audiences have more power, influence and voice than ever before.
Brian Sorg, a student from Germantown, Maryland, works at the National Cancer Institute, and noted the difficulty media companies must face “to get people’s attention now.”
“It makes me wonder—you can get a better match between creator and audience, but at what point is it so specialized you have one creator matched to an audience of one?” he said. “Is there some kind of limit to minimum size of audience to continue being successful?”
Simmons asked the students to talk about why Apple had “won” the music download wars. The answers came quickly: bundling, early to market, great UX, focus on mobile, a 99-cent chance to own a song. Why did streaming company Rhapsody fail? It was ahead of its time, Simmons said. Bandwidth wasn’t broad enough when the company needed it.
Espinel answered questions from students about Spotify’s competitive advantages, and also its challenges. He said the company had been so focused on consumers for the last decade, that it was now turning its attention toward “creators and artists,” and hoping to “build tools to help connect artists to their fans.”
Student James Chang, who works for a defense and aerospace company in San Diego, said his company, General Atomics, doesn’t use digital media at all, “but I think we need to start focusing on it.”
“We have zero exposure, but I use a lot of social media and use subscription services like Spotify, Netflix and Amazon,” he said. “We need to get an outside perspective and recognize how important it is. I know as a user how important it is.”