Test then scale. Test then scale. This is the mantra that all innovators should subscribe to.

Moviepass hit the headlines again this week. In August they slashed the price of their monthly subscription from $50 to $9.95. The take up was massive. 2300% uplift in members, but that wasn't good news. Their website crashed and they were unable to fulfil customer demand.

The subscription price of $9.95 might be great for customers, but MoviePass has to pay its partner movie theatres the full-ticket price, which can cost more that $10. Multiply that by the fact that a subscriber is allowed to watch one movie a day and MoviePass starts losing money the moment any subscriber watches two or more movies a month.

Test then scale. Test then scale. This is the mantra that all innovators should subscribe to.

Rolling the offer out in just one or two locations or conducting customer research would have enabled them to understand: 

• what kind of customer behaviour the price slash would drive so they could price accordingly

• how many customers would respond and to staff up according to meet customer demand

• how to position the offer with their partners and to negotiate better deals ie on revenue share or a commission

Now they have negative sentiment to deal with in the industry and hundreds of thousands of dissatisfied customers.

AMC, the world's largest theatre operator have stated it would work with attorneys to see about blocking MoviePass use at its theatres.

https://www.forbes.com/sites/tendayiviki/2017/10/15/lessons-from-the-business-model-struggles-of-moviepass/#1db9776b7105