MoviePass CEO Discusses Future Of Company And Business Model
MICHEL MARTIN, HOST:
It's a summer weekend. And for many people, that means movies and more movies. And if you love movies, you've probably heard of MoviePass. For a monthly fee, the service allows you to watch one movie a day for about the price of one premium ticket. More than 3 million people have signed onto the subscription service, especially after the monthly fee dropped last fall.
But now, some are questioning whether the company can survive. It seems like another cautionary tale about the tech world or maybe it's about whether people still want to go out to the movies or whether Netflix and chill is the new reality or none of the above. As you can see, we have questions. And the CEO of MoviePass, Mitch Lowe, was nice enough to join us to try to answer some of them.
Mr. Lowe, thanks so much for talking with us.
MITCH LOWE: Yeah. Thank you.
MARTIN: So I know you didn't found the company, but you are the CEO. And could you just give us a sense of, like, what was the logic behind the company to begin with? What was the thinking behind the startup?
LOWE: Yeah, you know, when it was founded about four or five years ago, what they were really trying to do is to create a service for the already-active moviegoer. So you know, there's - 11 percent of the moviegoers in the United States go to the films 18 times a year. And so they priced the product at about $35, $40 - even in some markets, $49.95. And they developed a product that essentially was, you know, aimed at making it easier for the already-frequent moviegoer to go to the movies.
MARTIN: But the business press and the people who cover - at least the business side of the entertainment - are all over you now. I mean, they say that the company is hemorrhaging money. They say that the stock price has plummeted.
And what do you think is going wrong?
LOWE: I find it really fascinating that people believe that since you're losing so much money, you don't have a long-term business model. Amazon lost money for 20 years. Netflix still loses money. And so this is the way you build a big company.
And you know, if you look at the numbers, we've grown faster than Spotify, faster than Netflix, faster than all those other services. And that's what we've spent our money on. And you know, we'll continue to fund it.
You know, our competitors are the ones who keep spreading these rumors that we're going to go out of business. And clearly, they're afraid of us and would much rather have a clear playing field.
MARTIN: So the other question is that there are some analysts who say that the real business model of MoviePass is collecting the data on what the subscribers are going to see and that that's actually more valuable. Is that true?
LOWE: Well, it's - you know, our model is to get to breakeven on the subscription service. And we're not there yet. That's why we lose money. But every month, that's going to get lower and lower as we go through the end of the year. And then we make money off of, essentially, delivering to our subscribers valuable things. Like, for example, they want to know what good independent films are out there. The studios pay us to promote their films. Now, many of them won't admit it because they're afraid of backlash from AMC. But when we promote a small film, we're buying 15 to 20 percent of all the movie tickets in the United States.
MARTIN: Yeah. But kind of the reason I ask you about the information is that people are becoming more suspicious about their information being aggregated and sold. I mean, you saw that there are new rules around disclosure and the European Union. And so that's why I'm asking is do you think that that's the right course of action and that people - maybe they're - might there not be a point at which people would say - you know what? - I'll just pay my $15. I'll go once a month. And I don't particularly want you creating a dossier on me about what I'm seeing.
LOWE: Absolutely. Absolutely. And that's why companies like ours have to be very, very clear on what we're doing with the data. And we've said this over and over again. We are not selling the data. We're only using the data that we know about you to give you better experiences. But you can always opt out or you can cancel our service at any time. That's why it's so great to have options.
MARTIN: So before we let you go, Mr. Lowe, I take it - I want to go back to where we started our conversation, which was that the whole idea here is that you want people to go out to the movies. And why do you think that matters? Why do you want people to go out?
LOWE: Because, you know, seeing a movie when you're sitting with a bunch of people who are laughing around you, are jumping because they're terrified, it's just a very interesting and valuable experience - this communal entertainment. And it's just a - you know, it's an experience that I don't think we should forget. And it's one that is very valuable and fun.
MARTIN: That's Mitch Lowe. He's the CEO of MoviePass.
Mr. Lowe, thanks so much for talking with us.
LOWE: Thank you.
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