In 2017, it is hard not to notice the plethora of available subscription services. Consumer options run the gamut from beauty boxes to recipe delivery to car shares. This glut of subscription services is a reflection of the new subscription economy, in which traditional pay-per-product (or service) companies are moving toward subscription-based business models.
One of the most ubiquitous and popular services that has emerged from the subscription economy is streaming. Some argue the proliferation of streaming services threaten the film industry, as younger audiences prefer to stream, only venturing to theaters for blockbusters. This shift to in-home viewing may be a cause of the low box office returns of summer 2017. Despite the downturn in sales, a large group of theater goers still remain. The Motion Picture Association of America reports that in 2016 more than two-thirds of the U.S./Canada population aged two or older went to a movie at the cinema at least once.
While streaming services eat away at this consumer base, other subscription services hope to tap into this still rather sizable group of consumers and perhaps increase movie theater attendance in the process.
Like Netflix for Theaters
One such subscription service is MoviePass, which for a monthly, no-commitment membership fee of $9.95 allows subscribers to see one standard, 2-D movie per day in theaters. As a part of its business model, the company pays the full price for the ticket at each visit. The company predicts subscribers will only visit the movie theater just over once a month with MoviePass. In the past, when the service was four times as costly, subscribers averaged 3.8 visits a month. Regardless of what may seem like low visit averages, data shows that MoviePass increases movie attendance.
It would seem to the average individual that the subscription service only holds upside for movie theaters. Theaters receive an increase in attendance and theater goers have extra money to spend on concessions. However, AMC Theaters foresees MoviePass as a disaster for the industry and believes it has an unsustainable business model. The company worries that consumers will become accustomed to the low prices under MoviePass and will stop going to the theater when the company eventually goes out of business.
If you takes the perspective of AMC, the fate of the of the movie theater industry is endangered not only by alternative services such as streaming, but also by subscription services that seek to be complements. They are surrounded on all sides.
In the future, it will be interesting to see how the subscription economy continues to affect old industries like the movies and whether it can do more than just disrupt.