Groupon Goes Hollywood & Daily Deal Competition Heats Up

Groupon has built a billion dollar business around selling small businesses' daily deals to local consumers. But it's Groupon's big national deals last year with Gap and Nordstroms that really put the deal-a-day service on the map. And now Groupon is teaming up with a Hollywood studio for the first-ever deal of its kind. Groupon will sell tickets to Lionsgate's film "The Lincoln Lawyer," which opens this weekend.

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Lionsgate is taking a risk — betting that it's worth earnings less on the tickets to get the promotional value from Groupon pitching the film and the deal to its 60 million subscribers. Groupon's not just selling the film in its direct emails to subscribers but thousands of its affiliate websites will also promote the film and the deal. The Groupon promotion page includes a description of the movie, an interview with Mathew McConaughey, and it links to a trailer.

If this deal works, Lionsgate will get millions of dollars of free promotion. Plus, people who buy the deal can share it with their friends via Facebook or Twitter. Best case scenario, Lionsgate takes a major discount on the tickets it sells through Groupon(somewhere south of 1 million, we won't know until the deal closes), but makes that up by extending its life at the theater and on DVD. With marketing costs shooting through the roof and movies living and dying faster than ever, it's crucial to generate buzz and excitement on opening weekend.

If the deal's a success, Groupon will cash in too — it's sure to get other movie studios on board. And this opens the door for Groupon to sell a whole series of other types of products — Groupon's President was quoted in the Wall Street Journal suggesting that cable subscriptions are another option.

Now this is hardly the first time a daily deals service has gone to the movies. Groupon's smaller rival recently offered two movie tickets for $9. But the difference here is that instead of striking a deal with Fandango, Groupon is negotiating directly with a studio, which is treating this like the next frontier of marketing. We'll be watching the deal on Groupon; so far —on a local LA-area site — 1,440 people have bought the 2-ticket package, with over 11 hours left to go.

UPDATE: As of now nationwide, more than 150,000 people have bought the ticket. Six bucks buys one ticket to the film—limit two per person, though subscribers may buy two additional tickets as gifts.

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