When I think about all of the options today for subscription services, from lifestyle boxes, to video memberships, food meal plan options, to high end clothing, I never think about movies (aside from a Netflix or Hulu reference).
But recently a friend referred me to a service called “MoviePass,” an option to subscribe at a single low monthly fee and, as he claimed (and the service marketed), see unlimited movies per month in cinemas. He laughed, claiming the fee was so low he hadn’t even tried the service yet, but purchased it for less than a single ticket price.
I reacted with sheer confusion, and the questions followed, how is that even possible? How is that sustainable? How would a company profit with that model? After researching a bit, I decided to give it a shot and signed up using the referral code, despite the initial trepidation.
What I didn’t realize until reading fine print and stipulations was the service that was initially available on an unlimited basis for new subscribers had been quietly changed to a 3 movie per month maximum allowance.
Subsequently, the unlimited plan was reinstated and removed once again, in favor of the $9.95 fee for 3 movies per month. My friend was unaware of the shift as he wasn’t active with use of service. This came with the additional hassle of having to find approved or “select” movies to choose from, ones that were pre-selected or partners of the platform itself.
Ultimately, this was way too much additional confusion for a service that didn’t seem to provide any solution to a problem anyways. By using movie coupons, specials, and discount promotions, you can obtain similar rates for movies while also supporting theaters.
Initially the strong motivating factor was in effort to support theater employees, whose jobs and salaries seem to be phasing as the industry devolves into obsolescence in favor of streaming options. But there seem to be more suitable options for doing so.
MoviePass’s subscription-based ticketing fee option comes with a corresponding app, where members can check in to a desired (or in this case, supported) theater and showtime. The fee is then applied to a prepaid debit card, used to purchase the ticket from the theater as usual.
The company was founded in 2011 and has experienced structural shifts for years, along with corresponding shifts to service. The pricing options are frequently changed and they’ve experimented with different options, perhaps to see if any can help with profitability. Along with the change to 3 movies per month as a service maximum, MoviePass has implemented demand-based fees and blackouts to high-profile releases. The service was then further restricted to 6 select movies per day, as specified by the company, on a rotating basis. The company has had major issues with different cinema companies, who claim the service is unsustainable and ultimately detrimental to their own profits. AMC has even publicly disassociated from the company all together. MoviePass still claims to be committed to offering unlimited service options, however these are speculated to come at costs of around $100 per month, with similar limitations and other restrictions. The company has recently experienced financial issues, having to take out substantial loans to turn into capital, and started surging prices further for all movies during peak hours (i.e. after work, weekends).
The other main issue here, as I initially suspected, is the business model is simply not profitable to the company at all. MoviePass pays cinemas full prices for tickets, meaning the more subscribers the company signs up, the more losses it faces. It’s sustainability is simply people who get the service and don’t use it at all, or use it very infrequently. A company that wants people to sign up but fears marketing the services to them later? Impossible to profit this way. Additionally, the company has had to hire and spent quite a bit on customer service to resolve issues and constant consumer complaints.
The company currently only has several months of capital left to spend on business operations and “heavy users” of the service. All of this begs the question, is there any plan for success or profitability here?
Positives and Negatives
While the tone here, and it’s a transparent one, has certainly been a bit more negative and in reference to a multitude of recent issues surrounding the service (as well as customer complaints and frustrations)- to play both sides of the fence and maintain a fair objectivity, here are a look at some overriding positives and negatives. There are a couple of benefits to the company, and of course there is a reason they’ve managed to stay afloat.
- Independent studios can find value in MoviePass, whose customers may attract new business they wouldn’t have without the service, ultimately this can help lower-budget movies see success or at least break even in costs
- Cinemas do see success when MoviePass effectively markets a specific movie to its user-base, meaning a better working relationship, or the potential for such, with larger studios
- If you do like the select movie options, and frequently go to the movies, it may make sense to save the money by investing in the service
- There is a commitment to getting more people back to traditional cinemas and investing in big-screen movies, as opposed to more common streaming options
- There is a limited selection of movies that can be seen using the service
- There are surge prices for popular showtimes, creating hassle and minimizing savings
- The marketing efforts were initially focused on unlimited options, which seems to lack a transparency you would expect of any suitable company
- As the company continues to lose funds, there is the risk the service may either stop being offered or experience further stipulations, which means this may be a risky service to invest in or do business with
- Ultimately the company has not created profitability for traditional cinemas or employees
The Final Verdict
In retrospect, and all honesty, I would not use this service or recommend it to others. I think even beyond the issues with surging prices, changing membership options, increased fees, and limitations on movies that can be seen, the overriding issue here is one regarding a lack of transparency.
It seems like one service was being marketed and promoted, while another was the actual offering. While the wording has changed with respect to the website and general marketing to outline stipulations and monthly limitations more clearly, at the time I signed up I was completely oblivious to this- and it was in fact being marketed with unlimited features. In fact the only caveat was supposed to be needing to purchase in person and in inability to purchase any tickets online.
While I love supporting traditional cinema and the movies, I will continue doing so the old-fashioned way, and adding on plenty of overpriced snacks (the way they maintain profitability at all). I don’t care for services who practice poor marketing, especially in relation to an industry that needs help and positive efforts. My message is to find a better way to champion tradition and support local cinema, while saving yourself the hassle of investing in a service with so much fine print and hidden stipulations. Not every business can succeed, but this much lying with marketing efforts and the amount of false promises is the tough part here.
The company knows they can’t fiscally deliver the unlimited plan or live up to lowered costs for less limitations, but has to keep up the implication or face total failure.