Tom Dougherty, CEO – Stealing Share
15 August 2018
MoviePass – the great idea till it wasn’t
MoviePass is quickly dying. Its stock is now at five cents a share.
It seemed like a great idea. Though, in retrospect, it served only as a great idea for moviegoers, not for the company’s investors. MoviePass only costs $9.95 a month to watch a movie a day.
What a deal, considering a single movie at my local theater costs $11.68. If I watched a movie a day for 30 days it would cost me $350.40 – yeah I’ll pay $9.95!
Wait, they changed their plan. Now I can only watch three movies a month for $9.95. Again, a no-brainer right? The deal is nowhere near as good. But, if you go to the movies a lot, the math works out in your favor. Though, given the state of the cinema today, I’m not sure there are enough good movies for me truck out 36 times a year.
Precepts could’ve saved MoviePass
This is what MoviePass bet on. It was a bad bet. The company thought its model was like buying insurance. Get enough people to pay in with the hope they wouldn’t use it. They also thought theaters would come to them discounting movies bought through MoviePass. None of that happened.
“Our research with precepts shows people believe you get what you pay for. They also believe it’s only fair that companies turn a profit so they remain in business. And, therefore, keep serving you.”
Now, MoviePass hemorrhages cash. Reports say they have two months of cash left.
It’s too bad, really. Because this was a service that actually benefited the consumer more than the company. How often does that happen? Oh right. It never happens because, if a company can’t make money, it can’t stay in business.
Here’s the thing. While it may be too late for MoviePass, consumers understand that a company needs to make money. Our research with precepts shows people believe you get what you pay for. They also believe it’s only fair that companies turn a profit so they remain in business. And, therefore, keep serving you.
Someone will come along with a better business model. Maybe MoviePass re-emerges later, although the brand is mightily damaged. As long as the prices are fair to both sides, this can still work.
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