Start of Main Content
Author(s)

Meghan Busse

MoviePass is a movie ticket subscription service that grew slowly between 2011 and 2016 under its founder, Stacy Spikes. In 2016 and 2017, the company brought in a new CEO, Mitch Lowe, and a new majority owner, Ted Farnsworth, who cut the monthly subscription price to $9.95.
The service grew meteorically but struggled to make the subscription ticket business profitable because $9.95 per month could not cover the cost of the movie tickets that MoviePass had to buy on behalf of its customers. According to Farnsworth, turning a profit on the subscription business was never the main idea; it was just a path to an advertising and marketing business built on the data. (The case provides some data on Facebook that enables students to benchmark this claim.)
The original MoviePass went bankrupt in 2020 but was reincarnated in 2022 by Stacy Spikes with a business model that differed in several significant ways from the MoviePass of 2016-2018: the new model was a credit system, the subscription price was higher, and it had the support of a network of participating theaters.

Date Published: 12/06/2024
Key Concepts: Value creation, Value capture, Competitive advantage, Competitive forces, Industry analysis, Scenario planning, Disruptive innovation
Citations: Busse, Meghan. MoviePass: Unhappy Ending or Reboot?. KE1277 (KE1277).