MoviePass, the movie subscription service, today announced a new feature that will vastly increase their subscriber base. A detailed description of this new feature can be found here. Following is my short summary.
MoviePass offers a monthly subscription plan priced from $25 to $40 based on the movie ticket prices in your area. So, for example, New York City is more expensive than Omaha. This allows you to attend one movie a day during the month. So a maximum of 30 to 31 movies for $25 to $40. A great deal for avid moviegoers.
They have added a MoviePass debit card for each subscriber that works at any movie theater that takes credit cards. When you go to the theater you use the MoviePass application on your smart phone (available on the Apple application store and soon to be available on Android) to find the movie you want to see at that location and select it. This loads the card with the right amount needed for the ticket.
Once selected, you slide the card into the credit card machine and out pops your ticket. Because you have a prepaid subscription, you do not pay for the ticket-MoviePass does.
The Hollywood Reporter covered the release of this new feature by looking for any theater owners that might have given permission to MoviePass. To their astonishment they found none. Thinking this a bit peculiar they just moved on. You could read between the lines and see that The Hollywood Reporter thought this would soon fail. After all, don’t the exhibitors have to agree to this? Actually-no.
You see, here The Hollywood Reporter missed the key point. When it comes to successful innovation in this new connected world the best thing a new company can do is find solutions that do not require permission. The inherent nature of the distributed network we call the Internet is that anyone can get on and no one can say no. This “no permission structure” has created huge companies like Facebook and Twitter, as well as many others big and small.
However, if you live in the world of a centralized network (the world of mass media, i.e. the world of Hollywood) you have to ask permission at every turn. Your whole world is a series of permissions. This sea (a cesspool perhaps?) of permissions is what has caused Hollywood innovation to lag behind the Internet world. One could even say that innovation as we know it today does not even exist in Hollywood.
So the brilliance of the Movie Pass move is undetected by general Hollywood observers because it can not fathom a world where someone could sell tickets to a movie without the theater “giving permission”-i.e. getting a cut. Yet that is what Movie Pass has created. The movie theater gets it full ticket price but it does not get what Movie Pass will now possess and which is very valuable in today’s world.
What will Movie Pass have and why is it valuable?
1. MoviePass gets direct contact with the customer, with an email address and a physical address.
2. MoviePass knows what movies each subscriber sees, at what theater, at what time and on what day-and this crosses all theaters, not just one chain or location.
3. Through its location aware application Movie Pass has the opportunity to allow each subscriber to opt in to other services. Want to find a restaurant in the area? Coupons for local entertainment options? Want to find other movies similar to the movie you just saw and liked? What are other people on MoviePass recommending? The list of these layered services is endless and each is valuable.
Movie Pass gets to know its (and the theater’s) customers. The movie theater gets paid and flies blind.
It will take time for theaters to figure this out because they have not traditionally been in the “know your customer” business. They have always flown a little blind. But when movie theaters discover what MoviePass is finding out about their own customers, the tables will turn-now the theaters will ask MoviePass for permission.
And innovation will be afoot, even in Hollywood.