Editor’s Note: In between the time this article was written and its publication, MoviePass has changed its policy again to allow new users to see one movie per day.
If you love movies and you haven’t been living under a rock for the last eight months, you’ve probably heard of MoviePass by now. For those subsurface rock dwellers, Moviepass is an app you pay $10 a month for. Actually wait, it’s $7.99 a month. Actually it’s $89 for the whole year. I don’t even know any more, it changes every month. But with it, you get to watch one movie every day. Well, actually now it’s four movies a month. And you can’t watch the same movie twice! Maybe you’ve started to notice the issue…MoviePass has actually been around for a while. Since 2011 it has existed in a state of constant flux. Pricing has ranged from $20 all the way up to $100 for a handful to unlimited movies a month. It seemed MoviePass was attempting to zero in on the perfect pricing formula to both sustain a satisfied customer base and remain profitable. In August 2017, it jettisoned concerns about staying profitable and lowered the price to $10 a month for one movie a day, regardless of region or timing. The only restrictions were no IMAX or 3D movies. Within a few weeks, a service frequented by a few thousand customers ballooned to millions.
Now, clearly MoviePass was (and is) a good deal. $10 a month for four tickets (the current promotion) is worth it if a customer uses the service even once for anything other than a matinee. For frequent moviegoers like myself, one movie a week for $10 a month is still a huge win. But the bloom is off the rose for a lot of customers who feel cheated by the constant, unannounced shifts in the MoviePass terms of service, especially for those of us who prepared for a year in advance only to have service reduced.
I think MoviePass has taken on the mentality of an insurance company. Get as many people signed up as possible and then make it as difficult as possible to actually use the service once they’ve paid. Is someone using it too much? Make them upload their ticket stub via a camera feature on the app. That’s annoying, maybe it’ll frustrate someone into not going to the movies. Or make it so they can’t see a movie twice, that way they’ll pay separately to see that movie and not use the thing they’ve already paid for that costs MoviePass money. Or we can whittle down the number of films they can see, that certainly limits liability.
There is perhaps something brilliant to the idea of getting great free press and advertising for their service by offering a too good to be true pricing, bringing in millions of users, and then slowly eroding the service to bring costs in line with expenses. Like the proverbial frog in boiling water, people won’t notice the slow deterioration of the service until it’s too late. It’s good for getting a fast start with a massive influx of customers, but it’s not very good for the kind of long term customer base Netflix has managed to round up.
There is a larger risk to this strategy as well. It’s one that movie theater chain AMC has been warning about for months. The feud between MoviePass and AMC isn’t exactly a secret. AMC tried to deny MoviePass users the ability to use the app at their theaters, and in retaliation, MoviePass cut off the app from their end to the top 10 AMC theaters in the country in a fairly bold shot across the bow leveraging the power of their user base. AMC maintains that artificially lowering the cost of movies is a long-term problem, because when MoviePass inevitably goes belly up, millions of frequent movie goers, the bread and butter of the industry, will be left disenchanted by the actual price of these movies. It will depress overall movie going and hurt the industry as a whole.
And there’s probably some truth to that. I used to see three or four movies a month at a matinee (to save money) before MoviePass. I probably average five or six at whatever time I damn well please thanks to the freedom MoviePass affords me. But if it disappeared tomorrow? I think it would take me awhile to ratchet my movie going back up to pre-MoviePass levels due to the budget shock. And therein lies the problem for the industry. MoviePass has shaken things up in a big way, and likely is responsible for boosting movie sales over the past couple financial quarters. But if they can’t find a way to stop gouging their customer base while finding a way to become profitable, the whole house of cards will come crashing down.
Or maybe MoviePass will find another way to become profitable. They’ve purchased moviefone.com, giving them a possible income stream (though I don’t know who really uses moviefone.com any more) that also integrates wonderfully with their service. They’re trying to negotiate special rates with theaters that will reduce the piles of cash they shovel out the door each month. Perhaps the most lucrative potential lies with collection of millions upon millions of data points from their users that could be sold to studios on who sees what movie, how many times, and when they see it. That alone could help studios with targeting advertising and content at different age and gender groups. As Google and Facebook have known for a decade now, data is where the real money is at. But who knows if any of this will come to pass?
I still think MoviePass is a great deal and would even be a great deal at four movies a month. The vast majority of movie goers would be happy with $10 a month to see four movies (so long as they could see any movie they want), and that might ultimately be the sweet spot MoviePass sticks with before too long. But it’s no longer a slam dunk. Now each TOS change that comes along and reduces the value proposition of the service gives new users and old users alike pause. For those of us who prepaid for an entire year, what will the service we paid for look like at the end of that year and will it at all resemble the service we started with? The answer to that question will likely have a major impact on the industry as a whole.
