Source: MoviePass; Photo: Wikipedia/m01229
If movie theaters turn into major traffic drivers for malls, MoviePass promises to be a major contributor.
Described as “Netflix for movie theaters,” the controversial subscription service started in 2011 offering unlimited movie tickets for $50 per month. Subscriptions took off last summer when MoviePass slashed its monthly rate to $9.99 per month (with annual membership). Subscribers can see movies at any theater listed on the service's app, a maximum of once per day.
Since moving to $9.99, the subscriber count has catapulted from about 20,000 to over two million. The goal is to hit five million by the end of 2019. Recently, MoviePass upped the ante by offering a limited-time deal for new subscribers of $6.95 per month for its annual membership.
Despite concerns from theater chains about the long-term impact of discount pricing, MoviePass is now accepted at more than 91 percent of U.S. theaters.
The company reimburses movie theaters for the full price of movie tickets. With the average ticket price nationwide at $9.00 and much higher in cities, MoviePass is presumed to be operating at a steep loss while it builds its subscriber base.
But MoviePass believes the service will work like gym memberships. Subscribers use the service heavily when they sign up and then see fewer movies as the novelty wears off. To discourage short-term memberships, members who cancel their subscription are blocked from re-subscribing for nine months.
MoviePass also hopes to arrange more revenue-sharing deals — such as a cut on concessions — as well as discount tickets for driving traffic to theaters. The company is also reaching marketing deals with studios and distributors to promote movies based on its wealth of data on viewers' tastes and movie-going habits. Finally, studios benefit because they can charge more for streaming rights and foreign distributing rights due to higher in-theater attendance.
While potentially reducing the allure of streaming offerings from Netflix, Amazon and Hulu, MoviePass has its work cut out for it. According to a recent survey from Statista, 54 percent of Americans prefer to watch movies at home while only 13 percent prefer going to the theater.
- MoviePass Lowers Price to $6.95 per Month – MoviePass/Business Wire
- MoviePass’s All-You-Can-See Deal: The Pros and Cons – The Wall Street Journal
- MoviePass unlimited movie-theater deal could be too good to survive – USA Today
- MoviePass slashes prices to $7.95 per month—here's how it makes money – CNBC
- Do you prefer to see movies in a movie theater or wait for them to come out on home release? – Statista