Do you love movies but hate how much tickets cost? Well, Mitch Lowe, an early Netflix Inc. executive, has an extreme proposal for getting people to go back to movie theaters: let them go to as many showings as they want for about the price of a single ticket each month.
Bloomberg writes that Lowe now runs a startup called MoviePass. He plans on dropping the price of the company’s movie ticket subscriptions on Tuesday to $9.95. What will this get you? One showing every day at any theater in the U.S. that takes debit cards.
MoviePass will pay theaters the full price of each ticket used by subscribers, writes Bloomberg, except 3D or Imax screenings.
Do you think that MoviePass might lose a lot of money with this plan? So were they. So they also raised cash by selling a majority stake to Helios and Matheson Analytics Inc., a small, publicly traded data firm in New York. Though the financing of that deal is unknown, MoviePass intends to hold an initial public offering by March.
Ted Farnsworth, chief executive officer at Helios and Matheson, told Bloomberg that the goal is to get a large base of customers and collect data on viewing behaviors. Then, this information can be used to target ads or other marketing materials to subscribers, like Facebook or Google does.
MoviePass would founded in 2011 with a similar model to a gym membership. Lowe was named CEO last year. He sees the high price of tickets as the theater industry’s biggest decline. Ticket sales declined last year in the U.S. and the cost of a ticket has almost doubled in the last two decades.
The top four cinema operators, led by AMC Entertainment Holdings Inc., lost $1.3 billion in market value early this month after a disappointing summer, writes Bloomberg.
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