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MoviePass CEO's backpockets on location tracking and bargaining strategy to reach breakeven by 2019

In a rare moment of contrition, MoviePass CEO Mitch Lowe admits to misleading consumers and advertisers by claiming last week that the company tracks the location of users before and after the cinema. "We do not do the things I've described," he told TechCrunch. As for the location, "We do not save it, we do not save it, we do not track it."

Customers may find this total flip-flop unconvincing last week, especially since the company released an updated days of application after Lowe's remarks that "suppressed the capacity location of unused applications. "

That too was inaccurate, Lowe said. "The update has not changed anything, only the menu options." He later wrote in the same direction in a blog post on the company's website.

The way I have portrayed what we are doing is not accurate. MoviePass CEO Mitch Lowe

This series of "misrepresentations", as Lowe called them, does not inspire confidence in a company that has openly stated it wants to use exactly this type of data to create a personalized evening with its customers – thanks to advertisers who would make offers based on these data, of course.

But Lowe explained that he was a victim of his own excitement. Speaking to a host of data vendors at the Entertainment Finance Forum, at a conference devoted specifically to monetizing the data collected by MoviePass, he claims to have just made some advance on himself and talked about projects like they were reality.

"Sometimes I'm excited about our future vision of a night at the cinema and building an ecosystem around her," he said. "I need to correct what I said.The way I have portrayed what we are doing is not accurate.I have hinted that we know where you are when you are on the way to the cinema, and that's not what we do. "

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Specifically, he said that the application checks the location when the user has opened the application in order to find cinemas close to them, at the case where they want to search for cinema hours or others. Then there is another location check when the user registers, to make sure he is at the theater, his ticket is for.

"We only know where they are at this moment.Once they come out of the application, we do not know where they are.We do not know where they are going after, we do not know where they are. Let's not save, that's all we do, that's all we've done. "

I had already pointed out that stalking as he had said was a flagrant violation of their own privacy policy, which exposed them to legal proceedings or even actions of the FTC. Lowe specifically said that they conform to it; Although background technical verification of nearby locations is not listed here (only "one request for your location"), the functionality of nearby theaters is not really the type of invasive data collection.

MoviePass Premium?

If the company decides to launch a more complete "movie night" service, with follow-up before and after the film, "we will comply with all acceptable rules and conditions by first sending an opt-out in or opt-out, explaining in plain English what we do with this information. "

As for other changes to the product, Lowe said expect new offers soon.

"There will be new things in the near future," he said. "We are going out with a premium package, a package to bring a friend, a package of couples, a family package."

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I would put money on some kind of "red carpet" branding. It did not detail what these packages would include exactly, but he said you can expect the original monthly system to be in place in the foreseeable future.

"Most people assume that the number of movies our subscribers go to is much higher than it is," he said, which is consistent with the Early Adopter model. to extract a last drop of value from everything. eat the service. He declined to quote real averages, but said "you'd be shocked to see how low it is."

He said, for example, that many users will see on order 4 or 5 movies a year at 10 a year – not 10 a month as some believe. The value, he speculated, was to "minimize the risk" of seeing a bad movie or movie – which can also increase ticket sales for these films.

Fill the pit with money

That said, Lowe pleaded guilty in response to the most frequent and obvious criticism of the service, which is simply that she loses money at a phenomenal rate and survives only by frequent infusions of cash.

"In ancient times, it was a ton of money and then developing a business.Today, what you are doing is that you are harvesting enough money. "It's a month-by-month money to basically fund this negative cash flow," he explained – which is really a simpler way of formulating the problem – but Lowe likened MoviePass to people like Netflix and Spotify, who took a huge debt to position themselves to grow and monetize their user base.

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Whether the comparison is appropriate or ambitious depends on the success of MoviePass over the next year; Lowe said, "We are 100% sure that we have committed funds … to break even, which we think is early next year."

The stages of this plan:

  • Show users an average of 1.1 times per month
  • Get the average monthly cost of goods (that is, what MoviePass offers the user) up to $ 9
  • Generate $ 6 per user in revenue from advertising and data sets

"Obviously, we are not there yet," he concluded. But he pointed out that "the necessary money drops significantly compared to what it was a few months ago." He later stated in an email that "revenue from studios and partnerships However, the road to getting a share of the dealerships – the most profitable part of the business – will be difficult, especially given MoviePass' antagonistic stance with industry leaders like AMC.

For now, it seems at least sure that consumers are using the application without fear of being followed surreptitiously, any more than they are online, at least right now. 2018 will be the year MoviePass either becomes a major force in the industry or collapse, its millions spent a sad example of the advanced subscription economy.