Blog, Pricing

Now Showing: How MoviePass is Disrupting an Industry

By Mitch Lee
August 28, 2017

Movie fans everywhere were delighted with the recent news that MoviePass introduced a service that allows fans to go to as many movies as they want for a monthly subscription of $10. With many theaters charging at least that much for a single movie, everyone is asking how is that possible? What’s the catch?

In the days since the subscription’s debut, some entertainment industry giants like AMC Theatres have pushed back on the deal, bloggers have tried to poke holes in the program delivery, and others have analyzed the validity behind the MoviePass business plan. In the end though, everyone is talking about it. It’s disruption 101.

Before you head out for a (cheap) movie night, consider the changes now happening in the 100 year old motion picture industry and who is driving that change. MoviePass doesn’t make movies; they don’t even invite you in to show you movies. They are a technology company that is changing the movie viewer landscape, most notably the number of people watching.

With this new, low-price subscription model, MoviePass is disrupting the industry with the most important profit lever, price. (As opposed to cost or volume.) The average price of a movie, according to the National Association of Theatre Owners, is $8.95 and in many cities, that price is much higher. MoviePass’ goal is to grow enrollment by the biggest numbers possible. Some reports say they have done exactly that by bringing on 150,000 subscribers in the first 2 days alone. With large numbers of people paying $10 a month regardless of movie attendance, MoviePass will ultimately profit, or so the assumption goes.

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It’s All About the Data

But on to the next interesting point in the MoviePass story – that isn’t their end game. Do they want to amass subscribers with their new low-price offering and be rewarded by those that don’t buy tickets in any given month? Of course. Bottom line though, they are also hoping to also build a massive database that will naturally be very valuable to every company in the motion picture business and those that bump up against it. It’s all about the data.

Does that sound familiar? It should. Digitization is our reality today and it sets barriers to entry in any given industry very low. This is the case with the mobile app builders at MoviePass. If they do this right, they will not only be able to disrupt industry incumbents like AMC Theaters using price as the driving force, they will also be able to create and deliver far superior customer experiences. With sufficient data, the opportunities for partnerships that enhance experience are almost endless. If you’re going to a movie, maybe you need to request a ride with Uber or Lyft? Or if you’re driving yourself, maybe you need a parking recommendation? And where will you eat dinner after the movie; what’s close by?

Smart partnerships use relevant data to drive real value. And value is what every customer wants, regardless of industry, B2B or B2C. In my next blog post, I will dig more into customer experience for these movie goers and others. In the meantime, give some thought to disruption and what that looks like for your industry. What could you be doing that your competitors aren’t?

  • customer experience , digitization , MoviePass , pricing , subscription

    Mitch Lee

    Mitch is a Profit Evangelist at Vendavo with 25+ years of experience in the technical, operational, marketing, and commercial arenas of the process industry. Prior to Vendavo, Mitch was with BASF and Orica in product marketing and business management, driving operational optimization, pricing excellence, and margin improvement, as well as personal engagement in high value sales negotiations. Mitch also has deep experience with raw materials supplier portfolio management having negotiated large scale and long-term agreements with global suppliers.