Founding executive of Netflix, Mitch Lowe, spoke about his newest project, MoviePass, and its effect on the movie industry at the alumni meeting for the EAE Business School in Madrid, Spain.
MoviePass is a subscription-based, movie-ticketing service that allows users to pay a monthly flat rate of $9.95 in exchange for unlimited trips to the movie theater. This change for the movie industry is modeled after Netflix, and so far, it has received the same backlash as well.
While larger companies like AMC have critiqued MoviePass for their surprisingly low rates, Mitch recalls similar criticism accompanying the launch of Netflix: the online subscription movie rental service. He stands by his belief that no startup can destroy an industry if the established players are listening and adapting to their customers’ demands.
When MoviePass was launched in 2011 the profitability of it was unclear. The service was created in response to the falling theater sales and a lack of innovation in the movie industry. However, subsidizing America’s movie watching is no cash cow. Instead, the company is losing money in exchange for data. As people jump at the deal MoviePass gains more and more information about their consumer.
Mitch plans on using the data he collects from the current MoviePass users to help develop the service into its final product. MoviePass will give the industry greater insight into the patterns of movie-theater goers as the entire process of when, where and what movie to choose is compiled into one service. The information will also be used for advertising and marketing purposes.
Bernadette McCabe was recently hired as MoviePass’s senior VP of exhibitor relations with the duty of turning the data into profit. Mitch believes that “Bernadette’s proven track record will allow her to step right in and help exhibitors realize the power of our data, create partnerships designed to help the industry benefit from these insights, increase attendance and ultimately have a tangible impact on their business.”
After the theaters see the boost in business this service creates, a world of opportunity and development opens for MoviePass.
Jessica Welch is the Content Marketing Associate at BigSpeak Speakers Bureau, holding a Bachelor’s Degree in English Literature and Anthropology from California Polytechnic State University, San Luis Obispo. Her business thought articles often appear on Business 2 Community, Born 2 Invest, and YF Entrepreneurs.