Box CEO: M&E Firms That Survive & Thrive Will Be Those That Transform the Most
Amid the ongoing COVID-19 pandemic, the media and entertainment companies that are able to “get ahead will be those that transform the most, that are able to accelerate their journey and really find the areas of opportunity in this very, very difficult period,” according to Aaron Levie, CEO and co-founder of Box.
The media and entertainment industry has “gone through a lot already” and it’s “certainly bound to go through a lot going forward,” but the “resilience of this industry is profound,” he said July 16 during the webinar “The Future of Work.”
When M&E organizations “can home in on those areas of opportunity” they are able to find and “really, really focus on that and see the … forest for the trees, I think those are going to be the organizations that get ahead, thrive and will be able to actually, to some extent, go through this event or at least after this event be able to rebound much more dramatically,” he predicted.
Box’s Pandemic Response
Reflecting back on the early days of the pandemic, Levie said Box was “able to move to a remote work environment really within the first couple of days of the U.S.’s response to this issue…. Fortunately, from a business standpoint, we frankly really haven’t missed a beat execution-wise.”
Although those who work at Box have been “dealing with constant chaos in our personal lives” as a result of the pandemic, “all things considered, I think we’re doing OK,” he told Guy Finley, president of the Media & Entertainment Services Alliance (MESA), during the webinar.
“For better or worse, Silicon Valley” overall is an “echo chamber and a lot of times that’s a really bad thing because we end up sort of regurgitating the same bad ideas or technology trends that maybe aren’t going to play out as we think with blockchain or something like that.”
However, on the positive side, “you do have a lot of people that are pretty clued into the scientific community” in Silicon Valley, he noted.
“Throughout January, people were starting to talk about this as a much bigger risk than it was being perceived in the U.S.” overall, he recalled, adding: “That was sort of one of our initial signs that something was happening. We had a business summit that was supposed to happen in Japan in the early part of February.” But Box decided to “sort of tap the brakes on international travel and slow things down” as a result of what was happening with the pandemic in China. “By the middle of February, it was sort of becoming very serious and very real that this was coming to the U.S., whether we liked it or not.”
Box started to study its crisis planning for business continuity and the company team who handled that “met numerous times throughout the end of February and then, coming into early March, we started to kind of raise the sort of threat level,” he said. By the second week of March, the company shifted entirely to remote work and shut down its offices, he said.
He recalled a “surreal experience” about March 10 when, after its offices were closed, Box was having an executive meeting and those attending looked across the way at the Salesforce tower and saw the building was empty.
“It was definitely the start of some zombie apocalypse movie,” he joked. But “the scary thing is,” shortly after that, he watched the film “Contagion” again and the “uncanny sort of similarities” between the plot of that film and the current pandemic were “pretty bizarre,” he said, adding: “Hollywood certainly predicted this thing. Even if we had just listened to our best fiction movies, we would have executed way better in this situation. But we decided to not even do that, I guess.”
How the Media Industry Has Fared
The media industry, “from an operations standpoint, has probably been more prepared for this environment than most industries that we work in,” Levie said.
“We spent a decade in the media industry, working with customers and partners throughout the community to make sure that they’re set up with the cloud and, frankly, I think they [have] some of the most innovative CIOs in the world in this industry, who were some of the earliest adopters of products like Box and Zoom and Slack, and these modern cloud technologies,” he said.
The reasons for that quick adoption include the fact that the media industry is “probably more collaborative than sometimes is appreciated, and that’s because there’s almost no real dividing line between firms in the media industry,” he said, explaining: “You have talent agencies that have to work with studios, that have to work with production companies, that have to work with PR agencies, that have to work with guilds…. In most industries, you don’t have that level of collaboration cross company.”
“Black Panther” director Ryan Coogler was at a Box conference last year and he talked about using Zoom to communicate with script writers all over the world, Levie recalled. “That was just out of efficiency. Now obviously it’s happening out of necessity,” he pointed out.
“This is an industry that has always been – maybe not in that brief, two-year window with… Napster – but it’s industry that is largely always been trying to get farther and farther ahead of the curve from a technology standpoint – whether it’s the distribution of content or collaboration,” he said.
Although “there’s way more to do,” he said, “it’s an industry, relative to others, that I think has been ahead of things.”
Obviously, the pandemic has “been an incredibly disruptive event in terms of production and live entertainment, but from a technology standpoint, we think the industry has been well-prepared,” he noted.
More Box Predictions
Levie predicted the pandemic will “have a long-term impact on really the fundamentals of how we work.”
The traditional work process that includes physically going into an office, collaborating in person and all of that was built for an analog world, he noted. When you work remotely, however, there is a “flatter structure” to the way we collaborate and communicate, he said, adding: “I think this is having a profound impact on how we work, how we communicate, how we collaborate, how transparent companies are going to need to be in the future.”
Even the size of project teams may change as a result. Box typically thinks about projects that have 6-10 people on them, Levie said, noting: “That’s how many people tend to fit into a conference room or can get around a whiteboard. But when you go digital and you go virtual, there’s no physical limit anymore.”
As a result, “we’ll have teams that are 100 people,” he predicted, explaining: “You’re getting voices and you’re getting ideas from people you never would have heard from before because they just simply would not have been invited to that conference room – they wouldn’t have been able to get around that whiteboard…. This foreshadows some really interesting long-term impacts” when we work like a community on a project instead of isolated teams. It will also speed up execution and decision-making, he predicted.
However, the big “question that we’re wrestling with, frankly, at Box — but I think much of our Silicon Valley peers… more broadly” are also thinking about – is: “What does the future look like after the pandemic, which is forcing us into the remote-only way of working? What does that future hybrid way of working look like?” When offices open up, how much work will happen in a physical setting vs. a virtual setting at that point? And “how does digital bridge those two worlds together in a seamless fashion?”
Most people want to collaborate, he said, but conceded not everybody because sometimes egos get in the way. “Fundamentally, it comes down to marrying technology with culture and that’s this virtuous cycle that really starts to shape what works looks like inside a business, and that’s, I think, what we’re starting to see really kind of profoundly show up inside of organizations,” he told viewers.
However, he noted that you may walk through a company’s offices – albeit not in Hollywood – and see posters touting how much that firm values collaboration. Those are “great platitudes [but] then you go talk to them about their technology stack and they literally have no way of enabling anything that was on that poster,” he said.
But he predicted later in the webinar that there are “some profoundly interesting and creative ways that I think we’re going to see digital transformation play out.”
He warned, however, that ”there’s no question that this is going to be a net negative in terms of the near-term dislocation on jobs in many industries, [and] we can’t possibly underestimate the impact of that.” So we need to try and protect as many jobs as we can amid all these changes, he said.
Still, “at the same time, there’s going to be all new creative ways that people step up and come up with new business ideas and come up with new methods of monetization,” he said.
On the talent side, as one example, “there’s going to be all new creative ways of getting in touch with fans” and consumers, he said.
“I think we’re going to see a renaissance of creativity” and business models, he predicted.
He has already “seen some really creative and honestly awe-inspiring ways that some have been using” new technologies and “I think you’re going to see all-new industries emerge out of nowhere that we never would have predicted before” as a result of all this, he predicted.
“I’m hopeful – I don’t know if I’m optimistic yet – but I’m hopeful that we also, as a business community — and certainly [the] government — we can solve the near-term crisis from a financial standpoint,” he said.
Levie made a few more predictions. For one thing, “I do think that you’re going to see more partnership between Silicon Valley and media,” he said. Some of it “may be unwelcome because it’ll be the big tech companies becoming even more powerful as platforms, but at the same time they’re going to bring untold levels of capital to the industry as well,” he noted.
Also, “obviously, we’re going to see huge implications in the media industry around… the future of direct distribution and the time frame in which people can get digital downloads day and date on release,” he said, adding: “There’s some big questions that I think studio heads are going to be grappling with. And I think there’s an opportunity for a lot of new boundaries to be explored of what the business model is.”
Among the challenges that M&E organizations, like many other sectors, are grappling with now are those related to security, Levie went on to say.
“What you really want is an environment where I’m going to be independently logging into Box and to Salesforce and to Slack and to Zoom” using two-factor authentication “from a centralized identity management platform … and then what that affords you is it really doesn’t matter if you’re going to be working from Starbucks or working from your home or working from the office,” he pointed out.
An organization should want to be in the position of not having to trust inherently the network that somebody is using, he noted. You’re instead “independently securing each of those individual access [points] to those applications and then each of those products should have a high degree of security within that system as well,” he said, adding: “I think we have to evolve our way of thinking about security and not think about it as somehow the corporate network inside of our building is the fortress. We have to make sure that anywhere people are going to work from, from any device, we can go replicate that same value of security on those products.”
With some folks, “you would trust them more on the Starbucks network than their home security,” he joked. After all, the password to get into a home network is often too easy, he noted, adding there are also too many executives who still don’t use even basic security including two-factor authentication.
It is, therefore, “important to be thinking about really a Zero Trust security model,” he said.
Noting that he was an intern at Paramount Pictures in late 2004-early 2005, he said that was “part of the origin of “ Box because he saw at the time that when it came to collaboration, there must be a better way to collaborate. That is one of the reasons why the company initially focused heavily on the entertainment sector, he pointed out.
And then, pointing to the fact that we have had to do without theatrical movie attendance, amusement parks and live entertainment, he joked: “My guarantee is that I’m going to be at a movie theater every single day for the rest of my freaking life” after there is a vaccine — even if a movie has only 14% on Rotten Tomatoes and he will go on day one of its release. He also plans to go to theme parks and “I’m going to freaking go to every concert – I don’t care who it is,” he added.