MoviePass: The 'Get Big Fast' Strategy
In August 2017, MoviePass dramatically lowered its subscription price from $50 per month to just $10 for up to one movie per day. The idea was to rapidly scale the business to the point where they could generate incremental revenue streams form related businesses (e.g., a share of ticket and concession revenues from theaters, advertising revenue from movie studios; and revenue from ride-sharing companies). Within two days, Moviepass had gotten 150k new subscribers; within six months, they had more than 2 million. But as of February 2018, the company faced three challenges: theaters were resisting the concept, investors were shorting the stock in record numbers, and competitors were beginning to appear. Could CEO Lowe convince investors that they did, indeed, have a viable business model and could monetize their growing subscriber base? At the same time, Lowe had to decide whether to raise subscription prices to cover the growing losses or keep prices low to attract subscribers as quickly as possible.
Keywords: Market entry; growth strategy; profit vs. growth; subscription business; cash burn; Data Analytics; get-big-fast; buyer power; strategy implementation; movie industry; Racing; Business Strategy; Value Creation; Consolidation; Cash Flow; Growth Management; Business Startups; Entrepreneurship; Disruptive Innovation; Mobile Technology; Motion Pictures and Video Industry; Entertainment and Recreation Industry; Advertising Industry; Information Industry; United States;
Citation:
Esty, Benjamin C., and Daniel Fisher. "MoviePass: The 'Get Big Fast' Strategy." Harvard Business School Spreadsheet Supplement 720-854, January 2020. View Details