This case study “The Rise and Fall of MoviePass Inc.” describes the journey of a technology-based subscription movie ticket company in the US since its inception in 2012. The company launched its services after two unsuccessful attempts in 2011 but soon landed itself in trouble. The case explains the company’s struggles in the initial phase and how it overcame rejection from movie theaters in the US and went on to increase its subscriptions from 20,000 in December 2016 to 3 million by June 2018. The case highlights the discounted tickets pricing model of MoviePass which eventually led to its bloating financial debts. The case also explains how the company changed its pricing model several times, creating confusion in the minds of its subscribers. The case concludes with the steps taken by MoviePass to remain afloat.
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The case is structured to achieve the following teaching objectives:
The importance of a business model for the long-term success of a startup.
Challenges faced by startups in making money.
Role of the business environment/ external environment in the success of a startup/company.
The importance of market research for a startup before it launches its business.
The role of disruptive business models in making a traditional vertical industry structure irrelevant.