I have to admit, I blew it with my earlier post on the potential significance of HMNY's (Moviepass) acquisition of Moviefone. Not only did I spell Moviefone wrong - calling it MoviePhone. I missed the biggest potential that this deal has for the future of Moviepass. The light went on for me when I read this quote from Mitch Lowe - CEO of Moviepass, in what was the most detailed interview I have found covering the acquisition from Indiewire.com.
The deal’s “most important” advantage for MoviePass, Lowe said, is “build[ing] our relationship with Verizon. This is just the beginning of what we believe will be a much bigger and a much more interesting relationship.”
I think it is very possible that this "much bigger and much more interesting" relationship with Verizon could be a bundled offer of Moviepass to the (VZ) Verizon Wireless subscriber base. Could a bundle like that make sense? I think it could, and I will explain why.
- Verizon is now in business with Moviepass, and they are incented to see Moviepass be a success. The Moviepass acquisition included both stock and stock warrants that are worth somewhere north of $20 Million dollars, and could be worth much more if Moviepass has great success. Verizon now has a pretty significant stake in any HMNY or Moviepass stock appreciation.
- Verizon Wireless is currently not competitive with T-Mobile, (T) ATT or Sprint in providing a premium video offering.
- T-Mobile offers a free subscription to Netflix - If you have two or more lines on its T-Mobile One unlimited-data plan, you get a comped Netflix Standard subscription. If, like almost 111 million people, you already pay for Netflix, T-Mobile’s offer will zero out that $10.99 monthly cost.
- ATT offers free HBO with both of its unlimited-data plans, “Unlimited Plus Enhanced” (unmetered data with HD video streaming and 15 gigabytes of mobile-hotspot use) and “Unlimited Choice Enhanced” (only standard-definition video, no mobile-hotspot use).
- Sprint includes Hulu’s Limited Commercials streaming service with its unlimited plans. That can save you that option's $7.99 a month rate.
- Verizon offers no premium video at all. It once offered NFL streaming as an exclusive, but now that anybody can use that feature in the NFL Mobile app it is no longer an offer.
For Verizon - this is a fairly significant problem. Big subscription businesses don't like to have any glaring shortcomings when compared to their rivals. T-Mobile has heavily marketed getting "Netflix" "on us", and once customers have a free video service attached to their phone service they are much less likely to leave, which reduces expensive churn for the big wireless phone companies.
Now imagine that Verizon both wants to see Moviepass succeed, and they also have a missing ingredient that they can now easily offer to their 150 Million subscribers. A tremendous Win/Win for both Moviepass and Verizon.
This is so obvious that I am sorry I missed it the first time.
You might first see Verizon offer a discounted rate for Moviepass, or include it as an offer as part of their subscriber rewards program. Verizon already offers premium iTunes subscriptions and other premium offers as rewards to existing subscribers in their heavily marketed rewards program. This alone could drive many hundreds of thousands of new subscribers for Moviepass.
If Verizon made an offer similar to what T-Mobile does with Netflix - the impact would be nothing short of massive subscriber and revenue growth for opportunity for Moviepass. And lucky for Verizon, they would stand to profit handsomely from that new fortune.
Now some of you may point out that Moviepass is not a streaming service, so is less relevant to wireless carriers who are trying to drive more phone and data usage. There may be some truth to that argument, but I believe the benefit of the incredible value Moviepass provides far outweighs that drawback, and of course, Verizon has many millions of reasons to want to see Moviepass become a big success in the marketplace,
What a beautiful partnership this could turn out to be!
Disclosure: I am/we are long hmny, VZ.