I overheard two people at a cafe the other day debating whether Netflix was always destined to beat Blockbuster, and one of them said Reed Hastings was just smarter than everyone else. I wanted to cut in and say it was not that simple — because when you actually look at the early days of Netflix, how Marc Randolph and Hastings built the company from a DVD-by-mail experiment into a streaming giant, you keep running into a name that most Netflix histories barely mention. Mitch Lowe. He was not a co-founder. He was not a celebrity CEO. But I would argue that without Mitch Lowe, Netflix as we know it would not exist.

Who was this person, and why has his contribution been so thoroughly overshadowed?

Photo: James Duncan Davidson, Wikimedia Commons. CC BY 2.0.

The Video Rental Veteran

Before Netflix, before DVDs, before streaming, there was the video rental store. And Mitch Lowe was one of the people who understood that business better than almost anyone in America.

By the time Lowe crossed paths with Netflix, he had spent nearly fourteen years in the video rental industry. He had owned and operated his own video rental stores. He had served in leadership roles with the Video Software Dealers Association (VSDA), the trade organization that represented video rental retailers across the country. He knew the suppliers, the distributors, the studio licensing deals, the customer behavior patterns, and the margins. He knew what worked and what didn’t.

This was not the profile of a typical Silicon Valley hire. Lowe was not a software engineer or a product manager or a Stanford MBA. He was an industry veteran – the kind of person who had spent years in the trenches of a specific business and understood its mechanics at a granular level.

Lowe later recalled that he knew the video rental business inside out — every studio’s release schedule, every distributor’s pricing model, every customer complaint — and that when Netflix came along, he saw it as the future of everything he had been doing.

Meeting Marc Randolph in Las Vegas

The connection between Lowe and Netflix happened at a VSDA convention in Las Vegas. Marc Randolph, Netflix’s co-founder, was attending the convention to learn about the video industry and make contacts. At the time, Netflix was a tiny startup that had just launched its DVD-by-mail service. Randolph was still figuring out the business model, still trying to convince studios to give Netflix access to their catalogs.

Randolph met Lowe at the convention, and the two hit it off. Lowe had something that Netflix desperately needed: deep relationships with the studios and distributors who controlled the supply of DVDs. He also had something equally valuable: an intuitive understanding of what video customers actually wanted.

In March 1998, Lowe joined Netflix as Vice President of Business Development and Strategic Alliances. It was a pivotal hire, and it came at exactly the right moment.

Building the Catalog

When Lowe arrived at Netflix, the company’s DVD catalog was thin. DVDs were still a new format – the first DVD players had only reached American consumers in March 1997. The selection of titles available on DVD was limited, and Netflix needed to build its catalog aggressively to give customers a reason to subscribe.

My hosting company had zero marketing budget. Not because I could not afford it, but because I did not believe in it. I believed the product should sell itself — while Lowe was embedding Netflix coupons into DVD player boxes to manufacture that first trial. It does not. Nothing sells itself.

This is where Lowe’s industry experience proved invaluable. He knew which studios to call, which distributors to negotiate with, and how to structure licensing deals that would give Netflix access to the broadest possible selection of titles. He worked the relationships he had built over more than a decade in video rental and turned them into Netflix’s competitive advantage.

But Lowe’s most lasting contribution to Netflix was not just the deals he struck. It was the catalog – the deep library of titles that made the subscription model work – and the retail partnerships that put Netflix in front of the people buying DVD players.

The Catalog That Fed the Algorithm

Netflix’s famous recommendation engine, the thing that makes the service feel personal, was an engineering achievement that came after Lowe’s time. It began with Cinematch, a ratings-based collaborative-filtering algorithm the company built in 2000, and it was refined over the years by Netflix’s engineers and data scientists.

But the recommendations are only as good as the library behind them. Netflix later added a small, dedicated team of human taggers who watched films and labeled them with descriptive attributes – pacing, mood, the prominence of specific plot devices – to power the service’s genre rows and micro-genre categories. That combination of human taste and machine learning is the system Netflix still uses in evolved form today.

Lowe’s own contribution sat one level earlier: he helped build the deep catalog and the deals that stocked it, and he understood better than anyone in the room what video rental customers actually wanted – the release schedules, the habits, the relationships.

Netflix later estimated that its recommendation system drives the large majority of what members watch on the platform. But that engine was a team effort built over many years, not the work of a single executive.

Netflix Express: The Vending Machine Experiment

Lowe was also the person behind Netflix Express, a prototype DVD vending machine that Netflix developed in the early 2000s. The idea was to place DVD kiosks in high-traffic locations – grocery stores, gas stations, convenience stores – where customers could rent and return DVDs without visiting a store or waiting for mail delivery.

Netflix ultimately decided not to pursue the vending machine business. The company was shifting its focus toward its subscription model and, eventually, toward streaming. But the Netflix Express concept did not die. It was reborn, under a different name, with Lowe at the helm.

Retail Integration

Before the vending machine experiment, Lowe pioneered another strategy that helped Netflix grow during its critical early years. He integrated Netflix promotional coupons into the point-of-sale systems at Best Buy and into the packaging of DVD player boxes. Every time someone bought a DVD player at Best Buy, they received a Netflix trial offer. Every time someone opened a new DVD player at home, there was a Netflix coupon inside the box.

This was brilliant distribution strategy. The people buying DVD players were, by definition, the exact customers Netflix needed. Lowe understood that the hardest problem in the early DVD-by-mail business was not the product itself – it was getting people to try it for the first time. By embedding Netflix into the DVD player purchase experience, he removed the friction of discovery.

Leaving Netflix, Co-Founding Redbox

Lowe left Netflix in 2003. By that point, the company had established itself as the dominant DVD-by-mail service, and the strategic direction was increasingly focused on the streaming future that Hastings envisioned. Lowe’s expertise was in the physical world – DVDs, kiosks, retail partnerships – and the company was moving digital.

After leaving Netflix, Lowe joined Redbox, the DVD vending machine company that McDonald’s Ventures had founded in 2002, and helped build it into a network of more than 40,000 kiosks across the United States. Redbox was, in many ways, the realization of the Netflix Express concept that Netflix had abandoned. Lowe took the idea, refined it, and helped grow it into one of the biggest physical rental businesses in the country.

The irony is rich. Netflix shelved the vending machine concept, and one of its own executives turned that concept into a company that would become one of Netflix’s biggest competitors in the physical rental space.

MoviePass: The Final Act

Lowe’s career did not end with Redbox. In a move that would prove both visionary and cautionary, he became the CEO of MoviePass, a subscription service that offered unlimited movie theater tickets for a flat monthly fee. The concept was bold: for $9.95 per month, subscribers could see one movie per day at any participating theater.

MoviePass attracted millions of subscribers almost overnight. The problem was the economics. MoviePass was paying full price for each ticket its subscribers used, which meant it was losing money on virtually every transaction. The company burned through cash at an alarming rate and eventually collapsed.

But even in failure, Lowe had identified something real. The idea of a subscription model for movie theater access was sound – AMC later launched its own version, AMC Stubs A-List, which has been commercially successful. Lowe was right about the concept. He was wrong about the execution.

The Unsung Hero

I keep returning to a question that I think matters more than most people realize: why do we remember certain founders and forget others? Marc Randolph co-founded Netflix, but most people only know Reed Hastings. Mitch Lowe built the catalog, the retail partnerships, and the vending machine prototype, but his name appears in almost no popular account of Netflix’s success.

Lowe himself put it well in his book Watch and Learn: success has many parents, but the people who build the foundations rarely get the credit — by the time the building is famous, the foundations are invisible.

Part of the answer is that Lowe was not a CEO. He was not the face of the company. He was the person who did the work that made the face of the company possible. In Silicon Valley’s mythology, the founder-CEO is the hero. Everyone else is a supporting character. But companies are not built by one person. They are built by teams, and the people who understand the industry, who bring the relationships, who build the systems that make the product work – those people are often the difference between a company that survives and one that doesn’t.

Mitch Lowe’s career is a reminder that the most important contributions are not always the most visible ones. He brought nearly fourteen years of industry knowledge to a startup that needed exactly that knowledge at exactly that moment. He built a catalog that made the subscription model work. He pioneered a vending machine concept that became Redbox. And even with MoviePass, he identified a consumer desire that the industry eventually validated.

Not every career needs a headline to have mattered. Some of the most important careers are the ones that make the headlines possible for everyone else.

Sources

• Mitch Lowe, Watch and Learn: How I Turned Hollywood Upside Down with Netflix, Redbox, and MoviePass, Custom House, 2022
• Marc Randolph, That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea, Little, Brown, 2019
• Gina Keating, Netflixed: The Epic Battle for America’s Eyeballs, Portfolio/Penguin, 2012
• Netflix Corporation, Company History and Early Press Releases
• Variety, “MoviePass and the Economics of Disruption,” 2018
• The Wall Street Journal, “Redbox’s Rise and the Death of the Video Store,” 2012
• Video Software Dealers Association, Historical Records