Will $9.95 Moviepass Kill theater profits?

$9.95 Moviepass

$9.95 Moviepass trying to create subscription model

Lowe, an early Netflix Inc. executive who now runs a startup called MoviePass, plans to drop the price of the company’s movie ticket subscriptions on Tuesday to $9.95. The fee will let customers get in to one showing every day at any theater in the U.S. that accepts debit cards. MoviePass will pay theaters the full price of each ticket used by subscribers, excluding 3D or Imax screens. Full Story

 The idea sounds insane as the startup will pay the theatres full price while movie pass holders will only pay $9.95 per month. On the surface that might be true, but if these guys can get funding, which appears to be the case, then imagine the following:

  • Customers swarm and purchase the$9.95 Moviepass in droves making it a massive hit. Hard to imagine why moviegoers would not flock to such offer
  • The number of subscribers surges to such a level that  $9.95 moviepass concept becomes a force to reckon with. The executives than going to the theatres and demand better pricing.  The owners at first refuse, but remember Amazon; when people get used to low prices, they simply refuse to pay higher.  Moviepass could threaten to raise rates on its subscribers which would significantly lower the movie headcount. Sure movie pass would be taking a risk, but they could justify it by putting some statement with clever graphics depicting how they are bleeding and how the greedy theatre owners don’t want to budge. They would have the financial data to back their assertions; all they would need to do is come up with some clever sound bites, imagery and videos to stir the masses.
  • One other option would be for movie pass to play each theatre against the other by forming special deals with one of them and stating that they will promote that theatre over others. A price war would unfold, and that would play perfectly into moviepasses hand.

 

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