Mitch 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.
MoviePass is absorbing the ticket discount and hoping to make up the discount through monetizing the data and the breakage.
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 behaviors. That information could then be used to eventually target advertisements or other marketing materials to subscribers.
Lowe said MoviePass has data that suggests that audiences want to go to the movies—they just aren’t willing to pay upward of $16 for a ticket.
Attendance among the coveted 18-to-35 year old demographic is slumping, but Lowe said that’s not because they don’t want to go to theaters, but rather that they see the value in the subscription model and don’t like being nickel-and-dimed.
“[MoviePass] isn’t the solution,” Lowe said, “but I think for the first time in a while we’ve found a way to increase ticket sales.
“It’s a single digit percent increase in a $13 billion business, but it’s one way to combat people saying ‘I’ll just wait for that movie to come out on Netflix’… I truly believe this can be a $1 billion company.”
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