- Business Insider
Netflix cofounder Mitch Lowe has a new business model for his startup, MoviePass.
For $9.95 a month, subscribers can see one movie a day in any US movie theater that accepts debit cards, with the exception of IMAX and 3D showings.
MoviePass previously had a tiered-pricing system that ranged from $15 to $50, depending on a subscriber’s location and the number of movies he or she chose to see.
The new $9.95 one-movie-per-day program is a vast price reduction for the service – and an outright steal compared to the average price ($8.84) of a single movie ticket in 2017.
As MoviePass will pay the full price of every ticket sold to theaters, however, the company faces potentially huge losses, and it has recently secured funding to accommodate the new subscription plan.
The startup announced Tuesday that it had sold a majority stake to the big-data firm Helios and Matheson Analytics to promote a nationwide rollout of its low-cost service.
“MoviePass was founded to make it easier for passionate moviegoers and casual fans to see films the way they’re meant to be seen – in the theater,” Lowe said in a statement. “Our vision has always been to make the moviegoing experience more affordable and enjoyable for our subscribers. We are changing the way consumers think about going to the movies by making it possible to experience a broader array of films – from the latest summer blockbuster to a critically acclaimed documentary – through a subscription model.”
For Ted Farnsworth, the CEO of Helios and Matheson, the goal of financing MoviePass is to collect data on viewing behaviors from a large base of moviegoers. Farnsworth told Bloomberg that the startup would be able to target ads and market to its subscribers in a manner “no different than Facebook or Google.”
MoviePass was founded in 2011 as a $30-a-month membership. Lowe took over the company in 2016, and its service is available in 91% of movie theaters across the country.