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Binge

Why a former Netflix and Redbox exec is betting on brick-and-mortar theaters

Mitch Lowe
Lucas Jackson | Reuters
Mitch Lowe

A former executive at Redbox and Netflix, Mitch Lowe helped build the binge-watching society — and now, he's betting that he can get bodies back in the theater.

Lowe is now CEO of MoviePass, a movie subscription service that gives members access to all major movie theaters for a monthly fee. The start-up has been backed by investors like Aol Ventures, according to Crunchbase, as it tries to elbow in on an industry that is increasingly focused on online streaming.

"There are so many options and so many ways to get content, so many people trying to chase what's really valuable to consumers, and I don't think anyone has figured it out," Lowe told CNBC's "Squawk Alley" on Tuesday. "There's little bits of it everywhere. Netflix has it with some their series, 'Orange is the New Black.' Amazon has it with 'Transparent.' Everybody has a little bit, but not enough to keep you coming back on a regular basis."

With so much free content available online, young consumers are "completely un-loyal" to any service that doesn't deliver the next hit, Lowe said. About 52.6 million American households had Netflix service in May, with many subscribing to more than one service, according to new analysis of Nielsen data obtained by CNBC.

Still, more than two-thirds of the U.S. and Canada population – amounting to 235.3 million people – went to the cinema at least once last year, up slightly from 2014, according to the Motion Picture Association of America.

"I think a lot of people have forgotten what a kind of great social interaction it is," Lowe said. "So I'm hoping that we can reinvigorate this. Our subscribers go to the movies twice as often after becoming a subscriber, so I think that's really great for the whole entertainment ecosystem."

Average ticket prices have risen to $8.43 from $6.41 in the decade up to 2015, according to the National Association of Theater Owners.

But Lowe noted that in that time, theaters have upgraded their experiences, offering cleaner floors, plusher seats and even 4-D viewing. He said it's important for all the industry players — not just brick-and-mortar companies — to remind people of the value of getting out of the "cocoon."

"How well a movie does in the box office dictates the terms for streaming, for international rights. So it's incredibly important for both the creative community as well as the business community that it succeeds in the theater," Lowe said.

Devour the full season of "Binge" with Carl Quintanilla here.