What a cool business model https://t.co/ri58M5NDFF
— Allan Yeung (@alyeung) January 27, 2018
Wired magazine has a great article talking about disruption of the movie theatre industry by MoviePass.
First, we know that going to the movie theatre sucks:
- Price of tickets is pricey then add on top of that parking, baby-sitter costs, and dinner out
- Online transaction fees provide limited value to the customer, who wants to pay those, and what enhancements does it provide? Is reserved seating forth x% more?
- Concessions and snacks are expensive
- Most theaters have crappy seating, too close, dirty, and you have to stand up when folks come in late
Fortunately, these days you can book your seats online, some theaters have better recliner seating, and you can go for the early weekend matinee pricing. For example check out AMC in Factoria if you are in Seattle: https://www.amctheatres.com/movie-theatres/seattle-tacoma/amc-factoria-8.
MoviePass operates a very interesting business model
- Movie Subscription Service, catch the latest movies, at any theater for only $9.95 per month with no commitment
- Customers get a better pricing, and they try out more movies, and pay for more in concessions, according to the article: “customers are spending on average $13 on popcorn and soda, which is more than double the norm, because they’re not shelling out money for their ticket”
- MoviePass pays theaters full price for each ticket, whether a member visits once or 31 times a month – get your business partner hooked on these new customers then disrupt the flow of those customers
- Their business challenge: “the company needs to show that it can directly influence subscriber behavior through marketing maneuvers, whether in-app or through email and social media”
- “While 3 percent of all domestic box office gets purchased through MoviePass, the number jumps to 10 percent when MoviePass pushes a product, according to the company’s own tracking”
- Independents like this product, where “an incremental box-office uptick can turn a breakeven investment into a success”
- Grab a piece of the downstream revenue by acting as a film distributor via MoviePass Ventures: “As a distributor, MoviePass can offer filmmakers something the deep-pocketed streamers often can’t or don’t: A commitment to the big-screen experience, and the potential to maximize the number of people who see it there”
subscription service represents 62 percent of AMC’s operating income, and argued that the theater chain should share concession revenue—or continue to lose potential business. “We already know in past testing that MoviePass subscribers are not theater-loyal,” says Farnswroth. “They’re happy to drive by a theater that may be closer to a theater that will accept MoviePass -because of the MoviePass value.”
I see this as an iTunes like disruption of the music industry, but this time with the movie industry, with 3rd party apps and services steering customers and adding value to the traditional purchase path