Over the last week MoviePass has been getting a ton of buzz around the internet. For those of you still unfamiliar with what MoviePass is, to those that are hesitant to trust the company, we have a rundown for everything you need to know. Let’s start with just what MoviePass is. MoviePass is a subscription based company where users pay a nominal monthly fee in order to be able to watch one movie per day. MoviePass touts that they are useable at more than 4,000 theaters throughout the US, including every major chain. The main reason MoviePass has been getting all of the buzz the last two weeks is that they changed their monthly fee from $50 a month all the way down to just under $10 a month.
Now you may be wondering how MoviePass hopes to be profitable at this price point. They don’t. From what I can gather MoviePass is prepared to take losses in the short-term in order to gain market value, and then utilize their new user base in order to seek profits in the future. MoviePass has been around since 2011 and was founded by one of the main people behind Netflix (Mitch Lowe). But the company recently had 51% of it’s shares purchased by data analytics firm Helios and Matheson. MoviePass has already stated that they hope to partner with movie chains in order to get compensated for bringing in customers by getting a percentage of concessions revenues. Though I’m guessing that MoviePass will utilize their users’ data in order to sell that proprietary information to theater chains or movie studios that way studios can make even more informed decisions into their marketing of new movies.
Now we get to the biggest part of MoviePass’s recent success. December 2016 the company had 20,000 subscribers. As of the writing of this post that has shot up to 150,000. that’s a 650% increase in users in the matter of less than a year. This is weirdly scaring AMC, the largest theater chain in the US. MoviePass pays full ticket price for movies, even though users only pay the $10 a month subscription. Meaning that even with MoviePass existing AMC would likely not lose any profits, and if anything would likely gain profits by this move. However, AMC is of the belief that MoviePass’s price point is unsustainable (it probably is). They also believe that if MoviePass comes in, disrupts the market, then fades into obscurity it will have a lasting impact on the movie going experience. Because of all this AMC is attempting to block MoviePass from being used at their theaters. Here’s the issue with that, though. It just won’t be possible. MoviePass sends users a MasterCard to use at the theater chains, meaning AMC would have to block all MasterCard use at their theaters, and then guess what? MoviePass can just move on over to Visa instead.
Expect this to be a long, drawn out fight between MoviePass and the theater chains. Companies like AMC and Cinemark are typically averse to change in the markets. They like things the way they are. Weather MoviePass succeeds as a company or not, they’ve shaken up the market and there’s no turning back now. In the meantime, if you love movies and want to save some money doing it, sign up for MoviePass. A few of us in the Play Your Way Network have already signed up for the service and in the coming weeks we will make sure to update you all on the usability of it across theater chains and in different markets. No matter how things shake up we as the consumers should come out ahead, so let’s enjoy the ride.