On-demand services, even those delivered at a physical location, will embrace the subscription model. There’s a simple reason, they can lower their perceived prices and reap profits on the “breakage” — when subscribers fail to use their benefits.
The challenge will be keeping the breakage to a reasonable minimum. In retail and services, this means having sales/support/delivery people who engage the customer and encourage their positive experience with a service, such as curated food or on-demand auto service. In the movie business, the weight falls on creatives, who must produce enough theater-ready experience to keep the audience coming back.
Between 2012 and 2016 alone, in fact, the number of 18- to 24-year-old frequent moviegoers fell from 8.7 million to 7.2 million, and from 9.9 million to 8 million among the 25-to 30-year-old age bracket, according to the Motion Picture Association of America.
To offset this decline, movie theaters are increasingly taking a page out of Netflix’s early-days subscription playbook to bring back the crowds.
PYMNTS recently caught up with Ted Farnsworth, chairman and CEO of Helios and Matheson, majority stake owner in theater subscription service MoviePass, to discuss the strategy behind introducing subscription commerce into movie going.