Is the flat rate for the cinema the solution to refill theaters?
Moviepass launches the flat rate card to go to the movies for $ 10 per month in the US. The promotion allows you to watch one movie a day at the cinema. The main objective of the initiative is to return the audience to fill the cinemas without it becoming a luxury.
The film industry is going through one of its worst moments in the world, piracy, platforms in streaming such as Netflix or the rising cost of tickets, largely based on the rise in taxes, is forcing the sector to reinvent itself and offer new formulas so as not to let it sink.
Precisely the co-founder of Netflix and current CEO of Moviepass, Mitch Lowe, has been the promoter of this idea. Moviepass offers since 2013, the flat rate to go to the movies between $ 30-50 per month (about € 25-42) and many consumers still consider it a high price, so it has risked launching it for $ 10 (about 8 €) per month. In a few hours, the platform collapsed with success and no longer allowed to offer more cards with this price, for the moment.
How does the Moviepass card work?
Registered users in the application acquire a MasterCard debit card with which the Moviepass offers them the flat rate to go to the movies and for which it will charge them $ 10 per month. From the mobile APP, they choose the movie they want to see and go to the cinema with that card only once a day.
Moviepass is responsible for paying the full price of the ticket to the cinema, although the subscription paid by users is for a much lower price. So how does Moviepass make money?
The subscription model on which it is based is based on a previous study in which 50% of cinema tickets are sold to 10% of viewers, that is, there is a large mass of viewers who do not come too often to the movies. Not all users go to watch a movie every day and also, special formats such as 3D or IMAX do not fall within this basic rate, hence the loss margin is reduced.
“The flat rate for going to the movies is like the one for the gym; At first they go every day for the novelty but then they go one or two days a week ”.Mitch Lowe
Information is the gold of the 21st century; What is really behind the economic benefit of the flat rate to go to the movies of Moviepass is Big Data, that is, from the application a large volume of personal data, habits and interests of the viewers users of the APP that represent a great value for the advertising industry. This data can be sold to companies that wish to advertise in cinemas, for marketing and remarketing strategies by consumer segments ...
It is a business model with positive forecasts in the long term, as are all those based on data. The important thing is to grow in the number of users at all costs, despite the fact that the promotion itself is not profitable. This is the case in many of the startups of the moment such as Spotify, Uber, WhatsApp ...
Where can you use the flat rate to go to the movies?
In principle, there are more than 34,000 American cinemas that have joined this initiative, which represents 91% of the cinemas in the country. The model is not profitable in the short term and the company loses money with this system. However, for Big Data to be useful and profitable, data must be used globally for this reason, this trend may soon spread to other regions.
Cinemas continue to charge the full price of admission and see increased sales, in addition, the highest margin is obtained from the sale of soft drinks and popcorn within the facilities, so it appears to be a good initiative for the industry.
On the other hand, the commercialization of data or the online sale is not well seen by other parts of the industry (9% of the rooms not adhered to the rate) so the controversy is served.
After the one-year trial period that Moviepass has given to the promotion, we will see if the cinemas are filled again and if we can get to benefit from other parts of the planet.