Just weeks after having surpassed the million subscriber mark, the U.S. movie theater
subscription service MoviePass announced
another milestone last week. The “Netflix for moviegoers” which enables its subscribers to go see one movie per day for a monthly fee of $9.95 now has more than 1.5 million subscribers.
The latest announcement comes on the heels of an impressive five months, which saw MoviePass’ subscriber base skyrocket from just 20,000 paying customers in August 2017 to more than a million in December. The reason for this steep ascent is rather simple: MoviePass slashed the price of its movie flatrate from nearly $50 to $9.95 after selling a majority stake to the data company Helios and Matheson Analytics (HMNY) in August.
But how does MoviePass’ business model even work? Considering that just one movie ticket costs nearly as much as its monthly subscription fee, the company appears to be setting itself up to lose a lot of money. That’s where its new majority owner comes into play. After all HMNY is a big data company. According to a Bloomberg article
published after the takeover in August, the goal is not to earn money selling subscriptions, but to build a large customer base in order to collect data on viewing behavior. “It’s no different than Facebook or Google,” HMNY CEO Ted Farnsworth said. “The more we understand our fans, the more we can target them.”