UPDATED: MoviePass is offering a limited-time subscription that will allow users to pay $6.95 a month to watch a movie a day for a year. The service typically costs $9.95 a month, but the new deal comes with a catch. Users have to commit to a 12-month subscription.
“We did a soft launch yesterday,” MoviePass CEO Mitch Lowe told Variety. “We’re discovering there’s much more interest and demand than we ever imagined. We keep hearing from customers that they want an annual plan or they wanted some way to give MoviePass as a gift.”
MoviePass is trying to become the Netflix of cinema-going, but right now it seems to be more focused on building a customer base than turning a profit. The company pays theaters the full price for a ticket, so it is in essence subsidizing its users’ movie-going and losing money each time they check out a film. The average movie ticket cost $8.60 through the first three quarters of 2017. In some major cities, such as Los Angeles and New York, it sets customers back more than $10. MoviePass said its one-year subscription plan will be available only for a limited time.
Some theater owners have been unhappy with the service. AMC, the country’s largest chain, threatened legal action and predicted the company would fail. There is anxiety that customers will get accustomed to paying a discounted rate for tickets, which will depress prices, like bargain movie rental services such as Redbox and Netflix made Blockbuster and its hefty late fees obsolete.
Last August, MoviePass sold to Helios and Matheson Analytics, a publicly traded data firm. As part of the deal, it slashed its monthly pricing from as much as $50 a month to less than $10. In the process, its subscriber rolls swelled. When it sold, the company has roughly 20,000 subscribers. Now it has north of 600,000. Recently, MoviePass announced it had raised $100 million to fund operations. Even though MoviePass is operating in the red, the company believes that it will be able to monetize the data it collects on its customers or that it will drive so much foot traffic to theaters that they will give them some kind of discount.
“There are a lot of ways to make a buck,” Lowe said. “There’s advertising revenue. There’s marketing revenue. We’ll start testing these things with potential partners in the coming months. We’ve proven that we can build a big base of loyal subscribers.”