MoviePass: Disruption Through Subscription
(6 pages of text)
Case (Pub Mat)
In August 2018, MoviePass, a New York City–based movie ticket subscription service, faced an acute cash crisis that threatened its ability to continue in business. The company had disrupted the movie exhibition industry by offering movie tickets at a discounted monthly subscription price. Despite having quickly grown its subscription base to 3.2 million, it faced several challenges. The company had cash to survive for only the next two months, and a competitor was pushing its own subscription service. As a disruptor in the newly emerging subscription economy, MoviePass faced an existential crisis. How could the chief executive officer and his team increase MoviePass's subscription base and turn the company’s first-mover and wider-network advantages into greater profitability—before the company ran out of capital?
This case is ideal to use as the lead-off case in an undergraduate or graduate course in strategic management for two reasons: first, the focal company operates in the movie exhibition industry, which should draw students’ interest and motivate them to analyze the case; and second, the theoretical underpinning for the case is the concept of a business model. Analyzing a business model early in the course forces students to make the leap from understanding strategy as an abstract concept to appreciating strategic management as a practical activity that involves specific decisions. After completion of the case, students will be able to
- identify the salient aspects of the subscription economy, and explain what they mean to both consumers and providers;
- examine a company's business model and the viability of its individual components; and
- describe how the business model concept helps operationalize a firm's strategy.
Arts, Entertainment, Sports and Recreation
United States, Medium, 2018
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