Netflix co-founder Mitch Lowe, who is also the CEO of MoviePass, a subscription-based service for movie theater tickets, wants to transform the way you see films on the big screen. He'll also combat lukewarm movie theater ticket sales. How, you ask? By dropping the price of admission.
Lowe plans to decrease the cost of MoviePass's monthly ticket subscription to $9.95--about the price of a single movie ticket--starting Tuesday, according to Bloomberg. MoviePass, which was founded in 2011, originally charged subscribers $30 or more per month.
The startup's business plan allows customers who pay a monthly fee to see one movie a day at any theater in the U.S. that accepts debit cards. To accommodate this, MoviePass will pay theaters the full price of each ticket used by customers, excluding the more expensive Imax or 3D tickets. To offset subsidizing ticket sales, MoviePass sold a majority stake to the data firm Helios and Matheson Analytics, but the terms of financing were not disclosed.
The four top theater operators lost $1.3 billion in market value earlier this month and the number of tickets sold in the U.S. and Canada dropped, according to Bloomberg. What's more, the cost of tickets has nearly doubled in the last 20 years, according to Box Office Mojo. In New York City, for instance, a single movie ticket will set you back $16 or more.
Lowe, who also served as president of rental-kiosk operator Redbox, believes the theater industry's decline is a result of high ticket prices and not competition from streaming services like Netflix or Amazon Prime. He became the president of MoviePass last year.
While it seems like risky gamble, Ted Farnsworth, CEO of Helios and Matheson, told Bloomberg that the goal was to collect viewing data and create a large base of subscribers. He added that the information could later be used for targeted advertising or marketing materials to subscribers.