Netflix, advertising… and the mistake of believing the markets think like you do
I write after donning a hair shirt in penitence for my crass misunderstanding of Netflix’s decision in late 2022 to offer cheaper subscriptions with advertising, the result of my mistaken belief that the markets think like I do, and that all decisions should be made based on the same criteria I use.
In my case, the mistake is even more flagrant, given that I am always telling my students at IE University: “never believe that the rest of the market thinks like you.” IE, despite what some mistakenly believe, is not a place for rich kids whose parents pay for their studies. In reality, it is a university that, although expensive for Spain, is very competitively positioned compared to the universities with which it competes internationally, and offers proven quality, while providing many generous scholarships. That said, IE students who judge the market based on their classmates — people who after working for a number of years have been able to make the decision to invest in studies whose cost will be quickly amortized, or who are talented enough to qualify for a scholarship — couldn’t be more wrong.
For example, it’s clear that the car market is not made up of would-be buyers who are financially intelligent, or simply bright enough to understand the concept of investment — the slow…
