Wednesday, August 15, 2018

Deeper Lessons From MoviePass -- From Tickets to Subscriptions to Relationships

Many have commented sagely on the folly of MoviePass, but, at a deeper level, it is something of a caricature of how we are just at the baby-steps stage of The Subscription Economy. It is easy to laugh at what seems to be a Wyle E. Coyote model: "we lose money on each customer, but we will make it up in volume."  Of course it is not quite that simple, the intent being to monetize consumer data to compensate, but still the value proposition seems to defy gravity. There are important lessons here, as recently noted in the Washington Post, Price Intelligently, and Harvard Business Review.

These commentaries point to many dots that we have yet to fully connect into the larger image. There are many excellent insights about what Tien Tzuo of Zuora calls "The Subscription Economy" in his recent book Subscribed, and in these recent articles. The bigger picture I see here is what I call "The Relationship Economy." Subscriptions are an important way to structure profitable customer relationships, but what matters is how a business co-creates value in its relationship with each customer. If you focus on creating and sharing value with each customer, the rest will follow. That is explored in some depth in my recent post, The Relationship Economy -- It's All About Valuing Customer Experiences.

The core lesson of co-creating value is the shift from the Goods-Dominant Logic of tickets, through the more Service-Dominant Logic of subscriptions, to a fuller understanding of that logic in the value of service relationships. As the head of Stanley Tools was reported to say long ago, "our customers don't want drills, they want holes."

Eddie Yoon's article in HBR lists five lessons that serve as nice examples of some of the dots I refer to -- which I would connect into this larger picture of value-centered relationships. My perspective on his five points:
  1. Price elasticity is powerful -- and highly variable -- "playing with it requires great skill and precision." The issues are so dynamic that an adaptive, mass-customized approach to pricing is needed to profitably serve more than narrow niches. We need to go much farther down that road.
  2. "MoviePass serves as a cautionary tale of treating consumers with a transactional mindset" and "seeking to monetize them through advertising." I believe the age of services that are predominantly advertising-supported is giving way to models that are predominantly customer-supported (even if they retain some advertising value exchange in a way that is more customer-value focused, such as with a "reverse meter").
  3. All you can eat models are economically inefficient for both customers and businesses. Highly engaged "superconsumers" should be a prime asset to a business, not a gaping liability. Pricing and value propositions must adapt to different consumer needs.
  4. The movie ticket is only one aspect of the consumer experience. The customer wants holes (a good experience), not drills (tickets). A service relationship, value co-creation perspective points to ways to get more "share of wallet" from each customer.
  5. Yes, "bullying is a bad business plan." Long term success models are win-win, not zero-sum -- for consumers and business partners/suppliers.
Changing an industry like movies with essential entrenched players (theaters and studios) wedded to rigidly antiquated models will be challenging, but even so, the ultimate direction of relationship=value-focus seems clear.

My work on FairPay points to how such a new logic can work, but there may be other paths. The future of The Relationship Economy will be more mass-customized, and more win-win, drawing on deeper customer "dialogs about value." The power of businesses and customers will be more evenly balanced, and cooperation in co-creating value over the ongoing relationship will be the key to success.

------------------------
More about FairPay

For a full introduction to FairPay see the Overview and the sidebar on How FairPay Works (just to the right, if reading this at FairPayZone.com). There is also a guide to More Details (including links to a video). 

My article in the Journal of Revenue and Pricing Management, "A Novel Architecture to Monetize Digital Offerings" also provides an overview of FairPay (summarized more briefly in the ESADE Knowledge article "Three building blocks to monetize a digital business," and previously in Harvard Business Review, "When Selling Digital Content, Let the Customer Set the Price.").

Even better, read my highly praised book: FairPay: Adaptively Win-Win Customer Relationships.

(FairPay is an open architecture, in the public domain. My work on FairPay is pro-bono. I offer free consultation to those interested in applying FairPay, and welcome questions.)

25 comments:

  1. Good post. I be taught one thing more difficult on different blogs everyday. It should always be stimulating to read content material from different writers and apply a little bit one thing from their store. I’d choose to make use of some with the content on my blog whether or not you don’t mind. Natually I’ll offer you a link on your net blog. Thanks for sharing. marketing job singapore

    ReplyDelete
  2. Wow that was unusual. I just wrote an incredibly long comment but after I clicked submit my comment didn't show up. Grrrr... well I'm not writing all that over again. Regardless, just wanted to say wonderful blog! o level physics tuition

    ReplyDelete
  3. I'm truly enjoying the design and layout of your blog. It's a very easy on the eyes which makes it much more enjoyable for me to come here and visit more often. Did you hire out a designer to create your theme? Superb work! digital advertising

    ReplyDelete
  4. Hello just wanted to give you a quick heads up. The words in your content seem to be running off the screen in Internet explorer. I'm not sure if this is a formatting issue or something to do with browser compatibility but I thought I'd post to let you know. The layout look great though! Hope you get the problem solved soon. Cheers Maths tuition centre

    ReplyDelete
  5. I haven’t checked in here for a while because I thought it was getting boring, but the last several posts are good quality so I guess I’ll add you back to my everyday bloglist. You deserve it my friend :)brand training workshop

    ReplyDelete
  6. Wonderful post however , I was wanting to know if you could write a litte more on this topic? I'd be very thankful if you could elaborate a little bit further. Appreciate it! coding classes for kids

    ReplyDelete
  7. Hello! I could have sworn I've been to this website before but after checking through some of the post I realized it's new to me. Nonetheless, I'm definitely glad I found it and I'll be bookmarking and checking back frequently! lcd display module

    ReplyDelete
  8. I've been surfing online more than 3 hours as of late, yet I by no means found any attention-grabbing article like yours. It’s pretty worth enough for me. In my opinion, if all web owners and bloggers made just right content as you did, the internet will probably be much more useful than ever before. sem adwords

    ReplyDelete
  9. My programmer is trying to persuade me to move to .net from PHP. I have always disliked the idea because of the expenses. But he's tryiong none the less. I've been using Movable-type on various websites for about a year and am concerned about switching to another platform. I have heard excellent things about blogengine.net. Is there a way I can transfer all my wordpress content into it? Any help would be really appreciated!
    professional painter Singapore

    ReplyDelete
  10. I don’t even know how I ended up here, but I thought this post was great. I do not know who you are but certainly you're going to a famous blogger if you are not already ;) Cheers! music classes singapore

    ReplyDelete
  11. Wow that was unusual. I just wrote an very long comment but after I clicked submit my comment didn't appear. Grrrr... well I'm not writing all that over again. Anyways, just wanted to say fantastic blog! commercial litigation lawyer


    ReplyDelete
  12. Pretty section of content. I just stumbled upon your web site and in accession capital to assert that I acquire in fact enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement you access consistently quickly.
    grounds for divorce singapore

    ReplyDelete
  13. I have been exploring for a little bit for any high quality articles or blog posts on this sort of area . Exploring in Yahoo I at last stumbled upon this web site. Reading this info So i am happy to convey that I've an incredibly good uncanny feeling I discovered just what I needed. I most certainly will make sure to do not forget this web site and give it a glance regularly.
    digital marketing companies list

    ReplyDelete
  14. I know this if off topic but I'm looking into starting my own blog and was wondering what all is needed to get set up? I'm assuming having a blog like yours would cost a pretty penny? I'm not very internet savvy so I'm not 100% certain. Any suggestions or advice would be greatly appreciated. Thanks
    travel insurance

    ReplyDelete
  15. This is the fitting weblog for anyone who wants to seek out out about this topic. You notice so much its nearly exhausting to argue with you (not that I really would need…HaHa). You definitely put a new spin on a subject thats been written about for years. Great stuff, just great! Responsive Design

    ReplyDelete
  16. Hi there! I just wanted to ask if you ever have any trouble with hackers? My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no backup. Do you have any solutions to prevent hackers?
    pay very close attention to the SEO

    ReplyDelete
  17. Somebody essentially help to make seriously posts I would state. This is the very first time I frequented your website page and thus far? I surprised with the research you made to create this particular publish extraordinary. Great job!
    seo training singapore

    ReplyDelete
  18. Scholars are a one of a kind variety. You realize when you're perusing content composed by a specialist, or possibly an astute essayist. This article is for all intents and purposes flawless as I would like to think.


    SEO services in kolkata
    Best SEO services in kolkata
    SEO company in kolkata
    Best SEO company in kolkata
    Top SEO company in kolkata
    Top SEO services in kolkata
    SEO services in India
    SEO copmany in India

    ReplyDelete
  19. I love all the articles, I need to point out my partner and i treasured, My partner and i wants more information with regards to this kind of, simply because it is rather fantastic., Many thanks relating to uncovering. Wordpress Development

    ReplyDelete
  20. At Vakantiehuis Dordogne you will find your holiday home dordogne. Holiday homes Dordogne is for anyone looking for a holiday home or other accommodation in the Dordogne, but we are also there for renters of holiday homes and chambres d'hotes in the Dordogne. We are the specialist for the Dordogne and the adjacent departments in the field of rental and rental and we also offer an overview with interesting facts and other information about the Dordogne.

    ReplyDelete
  21. https://www.startupicons.in/ Online Digital Marketing Course and Services in Hyderabad

    ReplyDelete
  22. Exploring legal internet businesses is always intriguing. I'm eager to check out the insights and opportunities you've highlighted in the link Smd screen in Pakistan. Here's to discovering new ventures and possibilities.

    ReplyDelete