As MoviePass continues its rapid growth, drops its subscription price and offers bundled services, it could seek partnerships with players such as Netflix, Inc. NFLX or Amazon.com, Inc. AMZN's Prime as an added value benefit, Ted Farnsworth, the chairman and CEO of MoviePass parent company Helios and Matheson Analytics Inc HMNY, told Benzinga.
"We can see doing joint ventures with Amazon Prime [and] Netflix. We're going to stick to what we know, and we know how to drive people to the theater," Farnsworth said in an interview this week.
In December, MoviePass announced a deal to provide Costco Wholesale Corporation COST members with subscriptions at a special price.
Following the deal with the high-profile warehouse club, MoviePass is in negotiations with other brands about potential partnerships, including retailers, ride-sharing services and production companies, Farnsworth said.
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Targeted Marketing
In the tech world, the acquisition of users, revenue and market share is key, and investors figure that with a large enough user base, the company will find a monetization strategy. MoviePass’ advantage is that it's able to direct subscribers to specific theatres and movies through targeted marketing.
MoviePass accounted for 62 percent of AMC Entertainment Holdings Inc AMC operating income in the most recent quarter, Farnsworth said.
Last month, Piper Jaffray downgraded Imax Corp (USA) IMAX from Overweight to Neutral, partly because it did not have MoviePass at its theaters.
Streaming Service Included In New Bundle
MoviePass is expected to drop its price yet again Monday to $7.95 per month in the company’s first bundled package offering, which includes the streaming movie service Fandor.
Farnsworth said he expects this move will push the company in the 3-5 million subscriber range. The company announced Thursday it had surpassed 2 million subscribers, up from the 1.5-million figure it reported one month ago.
A misconception is that MoviePass focuses on subscription revenues, when in reality it is a data play, Farnsworth said. Once Helios and Matheson took a majority stake in the company, Farnsworth dropped the subscription price from $50 per month to just $9.95, igniting a firestorm of publicity.
“The data we are gathering on the consumer has never happened before in this industry. People are so fixated on the subscriptions, but it's the opposite. We are gathering data as a Facebook or a Google."
Word-of-mouth about MoviePass spread so quickly that the company insists their cost of acquisition per subscriber is zero, despite shelling out money to buy tickets for subscribers.
'It's A Brand For The People'
MoviePass accounted for 5.7 percent of all movie ticket sales last month, and CEO Mitch Lowe said the company purchased 1 of every 35 movie tickets.
MoviePass' model rests on an ambitious plan to breathe new life into a legacy business, Helios and Matheson's Farnsworth said.
“It’s a brand for the people. We are fighting for the small guy. If nothing else, by pushing our people, we are definitely adding to the ecosystem of the theaters."
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