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Join the CineClub

Last week, Cineplex Inc. announced plans to launch a monthly subscription program.

"CineClub" will reportedly cost subscribers $9.99 per month, for which subscribers will get one free movie, cheaper “member-priced” tickets, and 20 percent off all concession items.

Representatives for Cineplex apparently did not respond to requests for more details... which is a problem, since the information we've been given isn't enough to get excited about the program. "Teasers" may be the way upcoming films are promoted, but launching a product, service, or program usually requires you to have more information ready to share.

Still, let's examine what we know.

1. We definitely know why Cineplex is launching a subscription program

The COVID pandemic has not been kind to Canada's largest theatre chain, which has been forced to remain closed for most of the last 18 months. Their stock plummeted in March 2020 (right about the time when mandated closures first began), and while it's recently started to recover, it has to almost triple from where it is today to get back to where it was.

So why launch a subscription program? Two words: recurring revenue.

Take a minute to think about your Netflix subscription. And... that's probably the only time this month you've thought about your Netflix subscription. You sign-up for the service, and then your credit card gets billed automatically every month whether you watch anything on Netflix or not. That's actually one of the amazing benefits of subscriptions: subscribers don't need to decide every month whether to buy your services or not; they tend to operate on auto-pilot, paying their bills diligently until either the company makes them angry enough to consider cancelling or their financial circumstances require them to audit their monthly expenses. And when was the last time you sat down with your credit card statements and thought about what recurring expenses you could easily eliminate? Exactly.

"A traditional model means a brand must go to great efforts to re-engage a customer to make a repeat purchase. Subscription, on the other hand, means that that onus shifts from merchant to customer, who, by default, is automatically opted in to repeats unless they sever the relationship by cancelling."

That's from Adam Levinter's The Subscription Boom, a book so insightful, I literally make it required reading for students who take my Retail Marketing Strategies class.

Cineplex simply wants to achieve the same level of "thoughtless spend": they'll offer me an incentive to sign-up for the program (in this case, a monthly movie that's $2.76 less expensive than the "regular" adult movie ticket price of $12.75), then charge me $9.99 every month indefinitely whether or not I actually visit the theatres. That's a revenue win!

But for Cineplex, it gets even better... because when I DO take advantage of my "free movie", I'm very likely to a) go with a friend (because most people don't go to movies by themselves) who will need to buy an additional movie ticket, and b) buy over-priced concessions to enjoy while watching the film. Incremental spend on top of monthly recurring revenue? Ka-ching!!!

2. We know why Cineplex isn't offering "unlimited movies"

The idea for a movie subscription isn't new: it's been around for at least a decade. That's when MoviePass first began testing a model that allowed subscribers to see unlimited movies for a set monthly fee. Predictably, the theatres resisted the commodification of their primary offering, but MoviePass did gain tremendous popularity with movie lovers as a result of the tremendous value it offered, especially when the "unlimited" price dropped to just $10 per month... or the same as Cineplex is planning to charge for a CineClub membership.

Of course, MoviePass is dead now. And anybody with a tiny bit of business sense, a few reasonable assumptions, and a calculator can understand why: the unlimited movie model isn't financially sustainable at a $9.99 price point.

That's why CineClub is only offering a single movie as part of your monthly subscription. If you want unlimited content for a $9.99 fee, you'll need to stick to one of the streaming services... but you forgo first-run films and the full in-theatre experience.

3. We know that $9.99 could represent value.

We know that CineClub will cost $9.99 each month. A regular adult ticket currently costs $12.75, so the monthly cost represents about a 22% savings on a single movie.

But if you've tried to purchase a movie ticket anytime in the past decade, you'll know that "special" tickets cost extra. Do you want to watch a 3-D film? Um... that'll cost more. Want to see the film in Ultra AVX? Upcharge. Ultra AVX D-BOX? Show me the money!!!

So the keyword in that headline is "could": a $9.99 monthly subscription fee that gives me access to a $22.50 D-BOX seat represents a tremendous value. But am I likely to get excited about the thought of saving $2.76 every month on a regular ticket? Probably not.

If I were in charge at Cineplex, I'd make "prime seating" (via those AVX D-BOX seats) one of the key incentives for people to sign up to CineClub. Sure, you could argue that forgoing the upcharge would represent a financial opportunity cost... but every time I've been to a theatre in the past five years, the majority of those D-BOX seats have remained unoccupied. Offering these existing assets as a prime member benefit represents value and generates goodwill for the program.

4. We know some additional benefits will be offered

Right now, the additional subscriber benefits reported are "member-priced” tickets and a 20 percent discount on concession items.

But those aren't exactly WOW benefits.

The cost of a regular ticket is $12.75, so even if CineClub members can buy additional tickets at their monthly subscription price of $9.99, that doesn't add up to significant savings unless you're buying for large groups or attending with a guest on a very regular basis.

And a 20% discount on concessions that cost 100% more than they do at the grocery store? That's probably not enough of an incentive for regular moviegoers to... um... stop wearing bulky clothing into the theatre (if you know what I mean).

So what additional benefits should Cineplex consider?

Here are five ideas that would make the offering much more compelling.

1. Allow subscribers to accumulate their movies

I subscribe to HP's Instant Ink Program: instead of purchasing ink cartridges for my printer, HP sends them to me "for free" whenever my printer tells HP it's out of ink. In exchange, I pay $5.99 per month for the ability to print up to 100 pages on my printer, with each additional set of 10 pages for just $1.25. And if I don't print 100 pages in any given month? I can rollover any unused pages indefinitely, up to 300 unused pages in total.

The roll-over makes sense. After all, I paid for the ability to print 100 pages, and I should get to print those 100 pages. Although HP's plan only lets me roll over three months' worth of printing, that's probably enough for me to realize that I don't have the right plan in place and make the necessary downgrade.

The temptation for CineClub to implement a "see it or lose it" policy as it relates to those monthly movies would likely be strong... especially because it would mean subscribers couldn't "save up" all their movies for the summer and holiday seasons when the blockbusters typically hit theatres.

But such a policy would be a mistake if the goal is to grow the number of CineClub subscribers. You want people visiting the theatre regularly, sure... but you never want subscribers to think, "I don't really want to see a movie this month, but I paid for it so I guess I'll go." Because if they do that too many times, they'll inevitably start to wonder whether the CineClub subscription is worthwhile.

2. Leverage the Cineplex Store

I never understood why Cineplex decided to open up their own digital movie store instead of simply partnering with Apple; it would have been far easier for Cineplex if they directed theatre-goers to make their movie purchases within iTunes (in exchange for a cut of the revenue, of course) and it would have been better for consumers to have their movie collection in a single place instead of with numerous companies.

But... they have a Cineplex store, and so they should fully leverage to provide additional benefits to CineClub members.

Been a member of the Cineclub for three months? Congratulations: here's a free rental!

It's your birthday? Whoo-hoo! Choose a classic film to add to your Cineplex library, with our compliments!

Referred a friend to CineClub who became a member? You both get a rental!

You get the idea.

Leveraging the Cineplex Store not only allows Cineplex to provide additional benefits to CineClub members but also gets subscribers to visit the Cineplex website and sample the digital store experience... and having subscribers start to think of "Cineplex" as an "entertainment company" instead of just a "theatre company" is a good thing.

3. Access to Advance Screenings

I've had the good fortune of attending several advanced film screenings in my life to date.

They. Are. Awesome.

For a film lover, perhaps the only thing better than seeing a terrific film on the big screen is seeing it before everybody else gets to see it. And this type of exclusive access is something that Cineplex can -- and should -- offer CineClub members on a regular basis.

4. Monthly Draws for Merchandise

I have a framed "Fast Five" poster in my home office that's signed by two of the film's stars: Jordana Brewster and... somebody else. (The signature is more illegible than mine, and that's saying something!)

I got it years ago when I worked with Universal Studios on a consumer promotion for a brand I was managing at the time; my contact was able to get it for me as a memento of our deal.

That's because... film distributors often have great access to cool stuff!

And Cineplex is in a unique position to leverage its relationships with the studios to request movie paraphernalia that can be used in monthly draws for CineClub members.

Hey CineClub members: excited to see Spiderman: No Way Home in December? Enter now for a chance to win a movie poster signed by Tom Holland!

If you love the movies enough to see a film every single month (and become a CineClub subscriber for the privilege to do so), these types of promotions would be a really big deal.

And why would distributors hand over valuable film merchandise for giveaways? Because when Cineplex features their film-related prize in communications to subscribers, they're effectively promoting the upcoming films and building buzz amongst those most likely to see the film on opening weekend. Some signed merchandise is a small price to pay to generate excitement amongst movie-lovers.

5. A Name Change

"CineClub" sounds like an exotic spice or a fungal infection.

Okay, fine, they can keep the name.

But before I hand Cineplex my credit card and authorize a monthly recurring charge, I'd like to see everything else become a part of the program.

And if you're reading this as a Cineplex employee and want more ideas on what you can do to make your CineClub a success, send me a note: I'd be happy to take my consulting fee in movie tickets and theatre nachos.


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