MoviePass, in its most recognizable and disruptive form, lasted approximately two years, from August 2017 to September 2019. This period marked a turbulent era in the movie theater industry, characterized by rapid subscriber growth, unsustainable financial models, and ultimately, the company’s demise. Let’s delve into the fascinating story of MoviePass, exploring its inception, peak, and eventual downfall, and addressing the key questions surrounding its brief but impactful existence.
The Dream of MoviePass: An Idea Before Its Time
MoviePass wasn’t a completely novel concept. Subscription-based moviegoing had been attempted before, but never with the same level of ambition and national reach. The initial idea was simple: for a monthly fee, subscribers could see a certain number of movies in theaters. However, it was the dramatic price drop in August 2017 that catapulted MoviePass into the mainstream.
A Revolutionary Price Drop and Explosive Growth
Before August 2017, MoviePass offered various tiered subscription plans. However, the arrival of Mitch Lowe as CEO marked a turning point. Lowe, known for his experience at Netflix and Redbox, spearheaded a radical price reduction to $9.95 per month, allowing subscribers to see one movie per day in most theaters.
This drastic price cut fueled explosive growth. Millions of subscribers flocked to the service, drawn by the promise of affordable and frequent moviegoing. The company’s subscriber base swelled from around 20,000 to over 3 million within a year. This rapid expansion, however, came at a significant cost.
The Inevitable Downfall: An Unsustainable Business Model
The $9.95 price point was simply unsustainable. MoviePass paid theaters the full ticket price for each movie its subscribers saw, meaning that the company was losing money on a large percentage of its users, particularly those who saw multiple movies per month.
Mounting Losses and Desperate Measures
As subscriber numbers soared, so did MoviePass’s losses. The company burned through cash at an alarming rate, forcing it to seek additional funding and implement a series of increasingly restrictive measures. These included:
- Peak Pricing: Charging higher prices for popular movies or showtimes.
- Movie Restrictions: Limiting the availability of certain movies.
- Showtime Limitations: Restricting the number of available showtimes.
- Eliminating Unlimited Plans: Introducing plans with limited movie viewing options.
- Mandatory Ticket Stubs: Requiring users to submit photos of their ticket stubs.
These attempts to curb losses were met with widespread frustration from subscribers, leading to a significant drop in membership and further accelerating the company’s downward spiral.
The Final Chapter: Bankruptcy and Shutdown
Despite numerous attempts to salvage the business, MoviePass’s financial troubles proved insurmountable. In September 2019, Helios and Matheson Analytics, the parent company of MoviePass, announced that the service would be shutting down. The company ultimately filed for bankruptcy in January 2020.
MoviePass FAQs: Addressing Common Questions
Let’s address some of the frequently asked questions that still linger about MoviePass.
FAQ 1: What was the original business model of MoviePass?
The initial business model revolved around selling data collected from its users to movie studios and other industry players. The idea was that this data, detailing moviegoing habits and preferences, would be valuable to studios in making marketing and distribution decisions. However, this data monetization strategy never fully materialized.
FAQ 2: Who owned MoviePass?
MoviePass was owned by Helios and Matheson Analytics Inc., a publicly traded data analytics company. Helios and Matheson acquired a majority stake in MoviePass in 2017.
FAQ 3: How many subscribers did MoviePass have at its peak?
MoviePass reached its peak subscriber count in June 2018, boasting over 3 million subscribers.
FAQ 4: Why did MoviePass lower its price to $9.95?
The drastic price reduction to $9.95 was a growth strategy aimed at attracting a large subscriber base quickly. The company believed that it could offset the low price point through data sales and partnerships with theaters.
FAQ 5: What were some of the biggest criticisms of MoviePass?
The biggest criticisms centered around its unsustainable business model, restrictive policies, and poor customer service. Subscribers often complained about peak pricing, movie restrictions, technical glitches, and difficulty reaching customer support.
FAQ 6: Did MoviePass ever make a profit?
MoviePass never achieved profitability. The company consistently lost money on each subscriber, particularly those who frequented movie theaters.
FAQ 7: What impact did MoviePass have on the movie theater industry?
MoviePass forced movie theaters to consider new pricing models and subscription services. It also demonstrated the potential for attracting a younger audience to movie theaters with affordable options. Some theater chains launched their own subscription programs in response.
FAQ 8: Were there any attempts to revive MoviePass?
Yes, Mitch Lowe himself attempted to revive MoviePass after acquiring the assets in bankruptcy. This second iteration, launched in 2022 with a tiered pricing system, did not gain significant traction and ultimately shut down again in 2023.
FAQ 9: What lessons can be learned from the MoviePass story?
The MoviePass saga highlights the importance of sustainable business models, realistic growth strategies, and effective customer service. It also demonstrates the potential pitfalls of prioritizing rapid expansion over long-term financial stability.
FAQ 10: What are the alternatives to MoviePass?
Several alternatives exist, including movie theater subscription programs offered by chains like AMC (AMC Stubs A-List) and Regal (Regal Unlimited). These programs generally offer more sustainable business models and a more reliable experience.
FAQ 11: How did MoviePass contribute to the “streaming wars”?
Indirectly, MoviePass contributed by demonstrating consumer demand for subscription-based entertainment. This helped pave the way for the rise of streaming services like Netflix, Disney+, and HBO Max, which offer a wider range of content for a fixed monthly fee.
FAQ 12: Will MoviePass ever return in its original form?
Given the previous failed attempts and the competitive landscape, it is highly unlikely that MoviePass will return in its original, unsustainable form. The industry has learned valuable lessons from its rise and fall, and future subscription services are likely to be more carefully designed and financially sound.
The Legacy of MoviePass: A Cautionary Tale
MoviePass serves as a cautionary tale about the importance of sustainable business practices and realistic expectations. While the company briefly revolutionized the moviegoing experience, its flawed business model ultimately led to its downfall. Despite its short lifespan, MoviePass left a lasting impact on the movie theater industry, forcing it to adapt to changing consumer preferences and explore new pricing models. The dream of affordable and frequent moviegoing remains appealing, but future attempts must prioritize financial stability and long-term sustainability to avoid repeating the mistakes of MoviePass.