Source: The Verge

Source: The Verge

MoviePass just announced that it now has more than 1 million paying users. 

This summer, the subscription service dropped its prices from a tiered model of $15 to $50 per month, to a flat fee of $9.95 per month. One week later, MoviePass was up to 150,000 subscribers, when it had just 20,000 a few months earlier. Last month, the company briefly offered an even cheaper one-year subscription plan, which came out to around $7 per month, but required users to pay for the full year in advance.

MoviePass has ballooned in just a few short months, but subscribers and theater chains are suspicious of its business model. MoviePass is subsidizing the cost of each ticket its users buy, at a maximum of one ticket per user per day, and almost definitely losing money. For people in big cities where theater prices can hover around $15, buying one movie ticket each month will already put MoviePass at a loss. MoviePass CEO Mitch Lowe has said the company hopes to offset the cost of city users by growing its subscriber base in more rural areas. The company also hopes that the data it collects from users will eventually be valuable to studios. 

But theater chains are worried that MoviePass will devalue the cost of movie tickets, because users will get comfortable paying so little. This summer, AMC threatened MoviePass with a lawsuit, and said it might opt-out of participation. For now, MoviePass works at most AMC theaters. 

Other theater chains have taken an alternate approach: trying to offer their own version of MoviePass. Earlier this month, Cinemark launched a MoviePass competitor called Cinemark Movie Club, but its price doesn’t really compare. It costs $8.99 per month for one 2D ticket, plus $8.99 for any additional tickets.