MoviePass (Netflix for Theaters) is Awesome, but Niche

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What It Is

MoviePass (in beta right now) is a Netflix-like service for watching movies in theaters. The premise is pretty simple, for $30 a month you get admission to one movie (with a limit of one viewing per movie) per day.

Using the service is very easy too, just sign up for the service and you’ll receive a MoviePass credit card. Once you have your card, head to the theater, where you’ll sign-in to the MoviePass application on an iOS or Android device and select the theater you’re at, and the movie / showing time you want to watch. MoviePass will enable the use of your card for about 30 minutes. Head to the ticket counter or theater kiosk, select the same movie and use the MoviePass credit card to pay.  Voila, you’re in.

There are a few restrictions to be aware of. As I mentioned, you can only see a movie one time using MoviePass, so no double matinees of The Hobbit. Right now 3D is also out of the question (likely due to the added fee for 3D films). Lastly, the MoviePass card itself runs on the Discover network, so make sure the theaters that you use most accept Discover Card. Just make sure you browse the terms of service and FAQ so you’re aware of all policies.

Who It’s For

At $30 a month the service isn’t cheap, but it’s not expensive either. Quickly looking at some numbers, if you go to three movies a month at $10 a pop, you’d have spent $30. So as long as you go to at least three a month, you’re getting your monies worth. That also means that you’d need to go to at least four movies a month to see any real value from the service.

Depending on the types of movies you like, finding four or more a month to go to could be challenging. That’s why I feel like MoviePass (with the current pricing model) isn’t for everyone. For the casual movie goer that only watches comedy or action flicks, the service isn’t a fit. However, if you’ve got a versatile film palette and just enjoy the theater experience, it’s definitely something to check out.

Personally, I could watch at least four films a month if not for familial duties. With a wife, 4 year-old, and 7 month-old, catching a film every weekend isn’t achievable. So while I tested the service for a month (and LOVED it), I had to cancel my subscription after the first 30 days.

The Business Model

Right now MoviePass has a single customer price point at $30 with the restrictions I mentioned above. The value proposition of MoviePass isn’t actually about the service offered, it’s about the possibility of saving money when I go to more than 3 movies a month (the same value prop as renting movies from Netflix for X dollars a month). They make money when customer’s actual use is less than the monthly fee, and lose money when the customer uses more than the monthly fee. I’d guess that they are looking for alternative pricing models that have lower price points with limited viewings, and higher price points for added features like; the ability to watch 3D films, being able to watch a movie more than once, or to watch more than one movie a day.

As far as the app goes, I’d like to see MoviePass be a bit more pro-active identifying which theaters are on the Discover network and eliminating those that aren’t  (I ran into this over Thanksgiving in my small hometown where the card failed to process.) I’d also expect to see some integrating with a something like Flixter for ratings and reviews, and with some type of p2p payment option so they can eliminate the costs associated with using the Discover network. I’m not aware of any advertising currently in the app, or any third party use of my personal data, but you can only assume that MoviePass will seek additional revenue streams from these kinds of activities, kind of like Amazon. That will allow them to continue to subsidize the pricing of movies and keep them the low cost option.

When it comes to competitors, the model itself isn’t hard to mimic and there’s little capital investment needed to build the infrastructure. I’d expect that if MoviePass gains a quick following, individual theater chains, like my local Fridley or Cinemark, would be able to replicate the service pretty quickly.

The most interesting piece of the model is the financial piece, with the ability to charge a flat service fee and then “spot” the user funds when needed to watch the film. I could actually see that piece of the model used in other entertainment businesses and other industries altogether. I’m thinking of something like a gas card, or photo printing services (some people still print photos you know).

Final Thoughts

The service is simple to use, and fills a gap in the market for frequent movie-goers. If not for my own inability to make it to enough movies to make it worth it, I’d still have the card today. It’s time that services like this found their way into local brick and mortar shops, and offered consumers a value where it didn’t exist before. If you’re the right fit for MoviePass, I say check it out. If you’ve tried it yourself, let me know your thoughts below.

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