Consumers are growing accustomed to the Netflix model of consuming entertainment. You pay a monthly subscription and in return consume as much streamed entertainment as you can stand to watch. So unsurprisingly, early Netflix investor Mitch Lowe is applying the same logic to movie theater visits.
Lowe, also former president of Redbox, became CEO of MoviePass last year. MoviePass allows you to visit one of 4,000 movie theaters across the US to watch a new, 2D movie every single day in return for your monthly subscription. The subscription cost was $30, but Lowe dropped it today to just $9.95.
As Bloomberg reports, when you consider the average price of a single movie theater ticket in the US is now $8.89, the MoviePass offer sounds too good to be true. And it could lose the company a lot of money because they still have to pay the movie theaters the full price of each ticket.
It's unlikely many subscribers will go and watch a movie every single day, but they'll certainly visit several times a month, so how does MoviePass intend to generate a profit? As with so many services today, it's all about data. By collecting data on the viewing habits of subscribers it will be possible to target them with high quality advertising and marketing material, which in the long run should earn back the money lost subsidizing all those movie tickets. The key word there being "should."
At less than $10 a month, MoviePass is bound to have a huge influx of subscribers. The movie theater chains should have no issue with the service because they are still being paid the full price of the ticket (by MoviePass directly). However, longer term it could become the norm to subscribe rather than pay at the box office, meaning MoviePass and any competitors that appear will grow in influence and could eventually put pressure on the chains to lower their prices.
Signing up to MoviePass is easy. Simply visit the MoviePass website and register your details. In 5-7 business days you'll receive a card in the post and then you can use the MoviePass app to browse local theaters and find showtimes. Then turn up at the box office, present your card, and go enjoy the movie.