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23 Feb

Niching down and quality-maxxing fr fr

Last week, I was reading the much-celebrated Shephali Bhatt piece on the curator economy.

I related aggressively with what she says here —

"It is an overwhelming task to sift through it all to find something that makes it worth your time. So people increasingly acknowledge the need for legitimate, skilled curators and are ever willing to pay if they find value in their curation."

And MUBI is proof.

MUBI is a curated movie streaming subscription service that differentiates itself from giants such as Netflix and Amazon by offering handpicked,  global and regional art cinema curation.

But instead of using an algorithm to curate your feed or content recommendation, MUBI has a team of cinema curators that pick the movies streamed across 190 countries. The curation is suited to the culture and tastes of the subscribers in those countries.

A Forbes article from 2018 describes MUBI as "the anti-Netflix."

"In many ways, Mubi is the anti-Netflix. Its monthly (£7.99) or yearly subscription gets you access to just 30 curated films a month not all-you-can-eat movies. Each film is available for 30 days, you can download everything and you can rate and review what you've watched."

And customers pay for the curation. Talk about counter-positioning!

Let's take a look at why they decided to do handpicked curation in the first place.

MUBI, previously known as The Auteurs, started in 2007 as an online interpersonal organization for film buffs. Back then, it had an extensive library and aggregated content offered on a subscription basis, pretty much like Netflix.

But that didn’t bore well for MUBI. Bobby Allen (Head of Content – MUBI) points out what pushed the business to re-think its model:

"The key in our business is traffic-to-trial (a 7-day free use of the service) and trial-to-subscriber, but we couldn’t convert even half of one percent of traffic to trialist."

MUBI then shifted to a curated model, which is functional till today. It offers a simple curated programme of 30 films for a small monthly subscription fee, with one movie uploaded daily.

But arriving at this insight took six long years.

Another reason for shifting to curation-led, according to Efe Crakel, Founder of MUBI, was that algorithmic curation wasn’t good enough for movies.

So when MUBI went to raise money for the business, their pitch was that MUBI is a boutique shop for quality films, unlike Netflix, which is more like a supermarket.

Big claim, right? And yet, MUBI delivered. Take a look at their 2018 figures:

Not only was their gross profit margin double that of other content-streaming competitors they also raised their last round of funding in 2019. With total funding of 25 million until 2019, MUBI’s revenue in 2022 was listed as 134 million. They're profitable.

Okay, enough facts and figures. Let's look at what MUBI’s curation-led model actually did for the business.

It narrowed the business' focus.

The curation-led business model helped MUBI narrow its focus in two ways.

First, MUBI capitalized on movies that did not have good distribution and secured streaming rights for them.

Secondly, it catered to a niche audience that viewed movies as an art. The audience was naturally interested in the movies streamed on the platform because they were not available anywhere else on the internet or on competitor streaming platforms.

One of the ways it reached its target audience was by partnering with film schools. The MUBI subscription was offered free or at student-discount rates based on the partnership with the institute. Having a razor-sharp focus on the quality of cinema also attracted renowned Hollywood directors to the platform who wanted to stream their projects on MUBI.

In a Tech Crunch interview, Efe pointed out that their business model meant that they only had to pay for 30-day-long licensing rights and pick out a total of 365 movies a year. This eliminated the cash burn their competitor's experience just to gain access to new content showcased on the platform.

It slowed down growth, which helped.

Since its inception in 2007, MUBI has taken long-term bets on all its experiments. The model of one new film per day and one film out is the longest-running experiment.

After raising funds, they focussed on becoming cash-flow positive and increasing revenue year-on-year, which they achieved by 2018. At the time, they secured rights to movies that would fit their budgets even if competitors were spending grandly on producing new content.In the same TechCrunch interview, Efe highlighted his number one goal for the business — obsessing about return on investment.

He said that the purpose of business was to stay in business and not the idea of growth.

The geographic expansion of MUBI also took place with no money spent on expanding in Europe first.

Then, instead of expanding to the USA, MUBI first came to South-East Asia. By 2019, MUBI had pockets deep enough to spend on the burn it experienced while growing in the Asian markets.

In the last two years, MUBI has gradually moved into exclusive distribution and production of films. (Exclusive distribution refers to buying rights to a theatrically released film, later platformed only on MUBI.)

It previously worked with films that were already released but weren’t available on the platform until it was confident of incurring the distribution and film production expenses.

It streamlined their marketing and brought clarity to their messaging.

Instead of spending heavily on digital channels like YouTube to increase its subscriber base, MUBI does marketing in a streamlined way.

When a title is selected as the ‘film of the day,’ all these channels are directed toward promoting that film. For filmmakers, the difference with MUBI is that instead of their film sitting in a library of a thousand films, it is one of thirty.

Every day, MUBI sends out a dedicated ‘Film of the Day’ email to hundreds of thousands of people globally. The email features “Our Take”, citing the reasons why MUBI selected the film and why it’s worth watching.

Additionally, MUBI builds editorial context around films. It runs one of the most respected online sources for film criticism: Notebook. A film is on MUBI for 30 days but for those 30 it is the centre of attention. It works for audiences and filmmakers alike, and great films can find people who want to watch them.

“I only need 365 films a year and I’m negotiating only 30-day windows for my library so I can be very mindful of the cost of content. People are not going to give up their Netflix and get Mubi. It is also complementary.

You think about your own Netflix experience, how frustrating it is for you to find a TV show or movie that you want to watch. We have our little staff pick of 30 films and whatever you’re in the mood for, we give you a nice film. You’ve never heard about the film, maybe, but you just press play, you’re delighted and you keep coming back.

No one leaves Mubi when they join, our retention is really great, exactly what Spotify has. Mubi is like that really knowledgeable guy behind the counter at the video store.”

— Efe Çakarel, MUBI Founder

In fact, when MUBI launched in India, it partnered strategically with tastemakers such as Varun Grover and actors like Radhika Apte to publicize their launch. They knew their audience base and spent all their efforts reaching out only to them.

By maintaining such poise in a market as competitive as video streaming and with competitors whose primary source of revenue wasn’t video-streaming (Disney, Apple, Amazon), MUBI has carved out a remarkable niche for itself.

In another interview, commenting on the 72% year-on-year growth of MUBI, Darrell Etherington from Tech Crunch, said:

"That’s a significant achievement and a rarity for just about any startup, but it’s particularly difficult and challenging in the context of the video streaming industry. It’s fairly standard practice among the larger players in the space to spend, spend and then spend some more."

In a world where no one stands for anything, MUBI stood for something and went all the way to deliver that value proposition:

Curating quality cinema.

Its shift to curated content at a time of content abundance not only differentiated it from the market but also helped MUBI create its category of one.

While its competitors are now busy figuring out how to avoid password-sharing troubles and experimenting with show release formats, MUBI, a fledgling startup, stuck to its guns and won. And by committing to its business model for more than 14 years, it has created a moat that will not easily be defeated.

As a founder and operator, the following stood out to me from MUBI’s growth story.

  • Take time to understand the market you want to serve
  • Do one thing and do it well
  • Quality trumps quantity, especially with content
  • Grow slowly. Rushing will confuse both you and your customers

If you have used MUBI before, do let me know what your experience was like.

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