photo: kopitiambot
MoviePass made a huge splash in August 2017 when it lowered its monthly-unlimited rate to $9.95. Observers are unsure if it’s sustainable, but it’s already disrupted the movie theater industry.
MoviePass’ strategy is to grow a massive user base with low prices, then find a way to make money later. If that seems stupid to you I’ve got some bad news: the modern web is basically built on this strategy.
A shift in the Market
Movie theater attendance in the United States has declined since peaking in 2002, according to the National Association of Theater Owners. However, people still crave the movie theater experience – just not at its current price tag. Enter subscription service MoviePass.
People can often feel as if they are wasting their time or money on collective experiences like going to the movies. People don’t realize that these experiences foster feelings of belonging, meaning, and companionship. They might even lower anxiety.
And with MoviePass, that feeling of wasting money on a collective experience may be less of a concern. Its base grew from around 20,000 at the end of 2016 to more than 3 million as of last month.
Sustainability vs. Modernity
Is MoviePass sustainable? “I don’t know, [and] to be perfectly honest, I think most of us don’t,” says BoxOffice Pro editorial director Daniel Loria. “But ‘I don’t know’ isn’t the answer you want when you have an offering like a subscription.”
MoviePass pays full price for tickets, a model that industry experts say can’t last. Meanwhile, AMC announced it would be offering its own subscription service, Stubs A-List, which costs about $20 a month for three AMC movies per week. Cinemark’s Movie Club service and Sinemia’s European subscription import are two other subscription services.
Despite the company’s confidence in the business model, the stock of MoviePass’s parent company Helios and Matheson (HMNY), is tanking to a current low of $00.11 a share. HMNY has unveiled a plan to raise a billion dollars from investors, and do what’s called a reverse stock split, which could temporarily boost the stock price.
It stands as the fastest-growing paid subscription ever in the history of the Internet, so one imagines it will have to go through some headaches.
MoviePass has also announced a slew of changes, including peak pricing, bring-a-friend options, and premium showings such as those at IMAX theaters. The company has also been plagued by complaints about bad customer service.
Even if MoviePass does not survive, it has been good because of its disruption. It’s a revolution for moviegoers and they have a power that they didn’t realize they had.
