MoviePass is a great idea. For a low monthly fee, you can see as many movies as you want. Sure, there are some restrictions, but it’s still pretty great. So great, many people have wondered how it even makes money on the deal. But so far, the answer appears to be, “It doesn’t.” After a new flurry of troubles, many people are asking, “Is MoviePass dead?” We’re not sure — but things certainly don’t look good.
What is MoviePass?
If you’re one of the handful of people unfamiliar with the MoviePass system, it’s pretty simple. You pay $10/month, and you can see a movie a day. A lower-cost plan, for $8/month, allows you to see three movies a month — though the $10/month plan is the most popular. There are a few restrictions: You can only see a film once and only at a regular screening (no 3D or IMAX).
How it works is you check in with the MoviePass app and tell it which movie you’re going to see. The app then authorizes the user’s card, which the user then uses like any other credit card.
At least — that was originally the plan. Today, some changes were announced. The biggest is a price increase: Starting next month, the price will go up to $15/month. It is also limiting the ability to use MoviePass on certain blockbusters; for example, for a film like Mission: Impossible Fallout, a limited number of tickets would be available for the first two weeks of the film’s run.
And, last month, the company adopted a “surge pricing” plan, similar to Uber. Users can be charged an extra $2 to $6 for seeing a film at what it calls “peak showtimes.” It’s also announced a “Peak Pass,” a perk that will let users waive one peak fee.
Throughout its surprisingly long lifespan — MoviePass has been around since 2011 — the company has run into some problems. Earlier this year, the company started to request some users photograph their ticket stub. See, when a user checks in with the app, the card is activated for approximately a half hour. Some people were taking advantage of that to “check in” to a movie, and then use the MoviePass card at nearby restaurants, or using the funds to pay for concessions rather than a movie ticket.
Last Thursday, a service interruption kept users from seeing anything. It wasn’t due to a technical glitch, either — MoviePass had legitimately run out of money. After the company borrowed $5 million, the service was turned back on. Though temporary, the outage was enough for a featured spot in the credits of this week’s episode of Last Week Tonight With John Oliver.
Part of the problem is that MoviePass’s attempts at other revenue streams have been shutdown. According to a phenomenal video essay by Nerdwriter1, part of its intended business model was to ask movie theaters for a flat “finder’s fee” for each person who buys a ticket and a cut of the concessions. Theaters unanimously refused, citing the thin margins on ticket sales. As is, the average subscriber sees 1.5 movies a month; since the average ticket price is $9.16, MoviePass is taking a loss on the average subscriber.
Finally, there’s a new competitor. Five weeks ago, the theater chain AMC announced its Stubs A-List program, which lets members see three movies a week for $20/month. Though more expensive and only available at AMC theaters, Stubs A-List has fewer restrictions; users can see IMAX and 3D films, for example. Today, AMC announced that over 175,000 customers have signed up for the new service.
Is MoviePass dead?
While it’s still early to tell, things don’t look good for MoviePass. The company expanded too much too quickly, and is struggling because of it. It’s clear that something has to change — either MoviePass’s service will become worse and more expensive, potentially scaring away members, or it’ll go away completely. There’s still the possibility an angel investor will pour more money into the service in hopes that it will finally become profitable — but after seven years, we’re not holding our breath.