MoviePass is a monthly subscription service that allows you to see 1 film a day. The service only cost $9.95 a month and currently has over 1.5 million subscribers. The price of the service is cheaper than the cost of most movie tickets. MoviePass pays theaters full price for each ticket, so they may lose a lot of money on some subscribers that regularly attend movies. The unfortunate part of MoviePass is that they only allow you to purchase tickets in person and not online. Therefore you may get to a theater and the film could be sold out so you have to plan ahead and have a back up plan. Do you believe this is a good idea and will take off? Or do you believe they will fail because of their lack of a solid revenue stream?

MoviePass saw a slowing industry and decided to figure out how they could make it better. Subscription services such as Netflix, Hulu, AmazonPrime and others have led to people to stay in the comfort of their own home to watch a movie or TV show. Theaters have been battling their decrease in box office sales for quite some time. Movie theaters have either taken the expensive approach by offering reclining chairs and home like seating or some theaters are very cheap and hope to sell a lot of tickets for minimal price. MoviePass saw this decline as an opportunity to disrupt the market with a new approach.

MoviePass is a great idea, however I believe its missing a good revenue stream to be successful . Although they have 1.5 million subscribers, they still only receive $9.95 a month from subscribers who might end up going to over 10 movies a week which will cost MoviePass.

MoviePass hopes to generate a revenue stream from attracting studios as investors. They are still in the adopting stage so if they are able to prove that they are bringing in a decent amount of revenue to theaters then maybe they will be able to sell their service to theaters. However, there is no protection in their business because theaters could eventually create some kind of membership program to viewers that will offer the same type of business. AMC theaters have already told MoviePass they wont invest because AMC executives have said they have no interest in sharing any admissions or concessions revenue with MoviePass.

Subscription services are on the rise because of their convenience and ability to add a twist to an industry. Clothing, video, and music have all become very successful subscription markets. However, something like MoviePass having no backbone with them creating their own content or having their own product line in some form may be an issue for them. They have to rely too much on the market and without a solid revenue stream it will be tough.

I believe MoviePass can teach us a few lessons about Internet Entrepreneurship business models. Although the idea may seem like it’ll add a twist or disrupt an industry, you have to ask yourself if the idea has a good revenue stream. Some applications only have advertisements as their main revenue stream and this can be very problematic. Another problem with MoviePass is that it doesn’t offer anything to unique that cant be easily replaced. Movie theaters can easily offer something that’ll put them out of business. Generating their own content or offering something that can’t replaced/copied is important. Look at Netflix for instance. Netflix began to create their own content to make them more unique and customers who like Netflix shoes can only watch them on Netflix. Although these are two different industries I do see a problem with MoviePass because movie theaters can easily offer something similar to their idea. In order to be unique they would have to offer some sort of streaming service that allows people to watch brand new movies online, however this would be a tough service to offer.

It will be very interesting to see the development of this service, but in my opinion it will be very difficult for them to generate much revenue.