How MoviePass Will Let You See 365 Movies a Year for $90, and Why Theater Chains Are Furious About It
The next time you go to the theater to catch a movie, take a look over at that area next to the doors that you never go to anymore — the box office. You’ll notice that there’s an increase of people going up to and actually using the box office these days, and the primary reason is an upstart company called MoviePass. The phrase “market disruptor” is much used in marketing pitches by companies, but MoviePass is one that truly owns the right to the phrase probably unlike any other company since Uber.
Originally forming back in 2011 in New York City, it’s been a slow road to build their financial backers and get their monthly user base to finally start going viral. For its first several years, the service cost varied by time and region between $20 and $99 a month. The service would allow a member to see up to a certain number of movies a month for the one subscription rate. Some packages would allow for completely unlimited movies, while others would limit the total number of films per month or whether a person could see the same film more than once.
Then in August of 2017, a majority stake in MoviePass was purchased by the analytics firm Helios and Matheson and quickly announced that the monthly rate would drop to $9.95. Now more recently they have started offering a prepaid annual package for $89.95 (plus a $6.55 processing fee). After that first year it would then convert to the normal $9.95 per month rate.
As a card-carrying member now for the past few months, the question arises: is it too good to be true? As a moviegoer, I can say kinda yes, and kinda no. So let’s get into the fine print and the details of how using it works:
You sign up for a membership online and enter in your credit card information for your subscription payment. It doesn’t actually charge you at this point.
In 1-2 weeks, you’ll receive the red MoviePass debit card (yes, it’s really a real honest-to-goodness VISA debt card).
Download the MoviePass pass onto your iOS or Android device.
The next step is to head to your local movie theater. Once you’re within 100 yards of the theater, spin up the app and log in with your credentials that you created when you signed up. It will ask you to enter your MoviePass card’s number and it will then activate your account. This is when billing happens for your first month’s membership, and that date will be your monthly anniversary date. This step does have to be done within proximity to a theater. It doesn’t entirely make sense as to why; perhaps they want to make sure you actually have a participating theater in your area before starting billing.
Now you’re set to start seeing movies. There are a few chains around the United States that will allow for online MoviePass ticketing; however, for the vast majority of theaters, you have to purchase the ticket from the theater itself at the box office. You have to again be within 100 yards of the theater you want to see a movie at. Bring up the mobile app and select the theater, movie, and time you want to attend (note that you can only purchase tickets for same-day screenings). After clicking a confirmation link, it should give you a “success, you’re ready to buy your ticket,” message.
What has happened under the hood is that the amount of funds required to purchase that ticket has been transferred to your debit card. You can then go to the box office and use the card to purchase one adult ticket (another detail is that it must be “normal” 2D films only at this point. IMAX, 3D, XD, and other premium-style presentations aren’t eligible).
So in most regions, going to see a single movie will more than pay for the monthly subscription — especially in large metro areas where normal tickets can run upwards of $15 each.
There are no blackout dates; however, at the moment you can see each movie only once. Also, since it only allows for same-day screenings and you have to be within 100 yards of the theater to make the reservation, the type of viewer it works best for are those who favor the last minute, “you wanna go catch a film?” For those that like to make reservations a week or more out, it doesn’t really work as well.
The terms do state that MoviePass is only eligible for individuals 18 years of age and older, but any weekend day will find many kids coming in with the cards in hand. Since they’re having to buy an adult ticket, the theater winds up making additional revenue, so they’re little motivated to monitor their use.
So that’s MoviePass and how it works. The big question is: can the company possibly make a profit? The business plan proposes that with the now more than 1,000,000 subscribers, the company can data mine the viewing habits of those individuals to sell to other companies. Assume that with tickets costing $12/each and watching three movies a month, that’s $36 – $10 = $26 that the company has to pay out to the movie theaters (each month). That’s an incredible burn rate, and it only goes up faster as more subscribers jump onto the boat. Theater companies (along with most of the business world) are highly dubious, and that’s what has gotten chains like Cinemark and AMC all riled up.
The theater chains don’t inherently care how they get the money for their tickets, since they’re paid in full. What concerns them is that this could change the viewing habits of audiences. If they spend six months or a year getting multiple films a month for a flat rate, if (or, as they expect, when) MoviePass folds, they may no longer be willing to go back to paying $10-15 for each film.
If chains could get away with it, they would refuse the cards; however, to do so would violate their terms with VISA as a credit card processor (since they’re obliged to accept any badged card). So theaters are stuck for the moment with accepting the cards. MoviePass is also going out of its way to make the case that patrons using a MoviePass card will wind up spending more on concessions. After each of my last few times using my MoviePass, I wind up getting a user habits survey.
So will it last? It’s hard to say. But with the rapid rate of adoption that’s going on with their audience having passed 1,000,000 users just a few months ago, it’s certain that if they were out to disrupt the market, they’ve definitely done what they set out to do.
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