An in-theater, virtually all-you-can-watch movie service recognizes the need to compete with Netflix. Its new price tag says it all.
MoviePass, a monthly service, just lowered its price tag from $50.00 a month to $9.95 a month. The service is available in 91% of U.S. movie theaters.
This would seem to be the new threshold for what entertainment consumers will pay monthly for any new entertainment offering -- digital, place-based or otherwise: around $10 a month. The current price for Netflix or Hulu or Amazon ranges from around $8 a month to $12 a month.
On the first day of the price change, MoviePass’ website crashed. In a six-hour span, MoviePass drew 500,0000 users. That's a rocketing increase from its average traffic, around 10,000 users per week, according to reports.
And yes, its executives had Netflix on their mind.
Mitch Lowe, CEO of MoviePass and a former Netflix and Redbox executive, stated that the price change “completely disrupts the movie industry in the same way that Netflix and Redbox have done in years past.”
How will MoviePass pay for all this? That is a big question mark.
The biggest U.S. movie chain, AMC Theaters, doesn’t like the change, believing customers will ultimately be disappointed when prices are forced to rise again.
Analysts already worry that the continuing issue of high-average movie ticket prices -- especially in major markets -- is holding back growth among new moviegoers. MoviePass had been looking to change this.
Overall, movie theaters continue to see at-home TV entertainment competitors as a growing threat -- ad-supported, ad-free and other TV-based services.
What MoviePass did was a recognition of the new entertainment world. And it may not work. But it will prompt consumers to sit up and take notice, as early results to its website have seen.
In an increasingly digital world, full of big movie-like TV screens in living rooms, MovePass may lure a significant number of consumers to get off the couch.