The Popularity of MoviePass
https://www.theverge.com/2019/9/19/20872984/moviepass-shutdown-subscription-movies-helios-matheson-ted-farnsworth-explainer
On September 14, 2019, MoviePass, a start-up selling movie subscription passes, shut down. The MoviePass subscription plan consisted of unlimited movies for less than $10 per month. The idea behind the success of MoviePass was that the people who frequently go to the movies would balance out the people who infrequently go to the movies. However, this model failed due to many issues, including that MoviePass doesn’t offer any new benefits to users, rather they are merely repricing an existing product.
As MoviePass tried to build its success, it tried various tactics in order for the company to become popular and not die out. This relates to our class discussion of popularity and the rich-get-richer models. For example, MoviePass started out as $50 per month, however they then dropped the price by 80% in order to gain more customers. This is an example of decreasing price in order to lower the tipping point and increase sales. If the price is lowered, then more people will value the service more than the price, so the demand will increase. Therefore, the tipping point will be lower, and this creates a lower threshold to reach in order for the service to become popular. The company also stated that, “the more [they] understand [their] fans, the more [they] can target them.” This relates to the fact that you want to find early users who will enjoy the product because the initial feedback is most influential; we learned that people like to follow the decisions of earlier people. If the service is better targeted, then the early users will enjoy the service and will influence more people to follow their decision of buying the service. Although MoviePass tried to use these tactics, ultimately it failed because it was losing too much money and went bankrupt.