Watch all you want at theatres in a month for only... Dh36.50?
Large part of this crazy idea from Netflix co-founder is to sell ads
As movie theatres struggle with tepid sales, Mitch Lowe has an extreme proposal for how to get more people into seats: let them come to all the showings they want for about the price of a single ticket each month.
Lowe, an early Netflix executive who now runs a startup called MoviePass, dropped the price of the company’s movie ticket subscriptions to $9.95 (Dh36.55) on Tuesday. The fee will let customers get in to one showing every day at any theatre in the US that accepts debit cards. MoviePass will pay theatres the full price of each ticket used by subscribers, excluding 3D or Imax screens.
MoviePass could lose a lot of money subsidising people’s movie habits. So the company also raised cash on Tuesday by selling a majority stake to Helios and Matheson Analytics, a small, publicly-traded data firm in New York. The companies declined to comment on terms of the financing but said MoviePass intends to hold an initial public offering by March. Helios and Metheson shares rose 5.7 per cent to $2.95 at the close on Tuesday in New York.
Ted Farnsworth, chief executive officer at Helios and Matheson, said the goal is to amass a large base of customers and collect data on viewing behaviours. That information could then be used to eventually target advertisements or other marketing materials to subscribers. “It’s no different than Facebook or Google,” Farnsworth said. “The more we understand our fans, the more we can target them.”
Investors may be misinterpreting the MoviePass business model, Eric Wold, an analyst at B Riley & Co wrote in a note to clients. If MoviePass can drive more people to theaters that would benefit the exhibitors, although the overall impact is “more negligible than anything,” Wold wrote. MoviePass was founded in 2011, originally with a business model similar to a gym membership. The company hoped to turn profit from subscribers who paid $30 or more per month but didn’t use the service often enough to justify the cost.
Lowe, a fixture of the home video business who helped get Netflix off the ground and served as president of rental-kiosk operator Redbox, was named CEO last year. The privately held company declined to disclose subscriber numbers or financial information. Lowe said the data-based business model is still “years in the future.”
With the new strategy, MoviePass hopes to resolve what Lowe sees as the biggest factor to blame for the theater industry’s decline. He said the high price of tickets, not competition from Netflix or Amazon.com’s Prime Video service, is a big part of what’s keeping people away. “People really do want to go more often,” Lowe said. “They just don’t like the transaction.” —