Sarah Grace Goolden
In 2017, movie theater attendance in the U.S. and Canada dropped to the lowest since 1992, according to Box Office Mojo. Whether it was due to subpar films or impossibly expensive tickets and concessions, the business is struggling and MoviePass seemed like its knight in shining armor. However, many are calling what was supposed to be a cinematic savior too good to be true.
MoviePass, founded in 2011, is a subscription-based movie ticketing service. They currently offer two plans, one of which gives users the opportunity to, theoretically, watch a new movie every day for only $9.95. In an age where a single ticket can cost over $10, this is a steal. How does it work? Well, it doesn’t- at least, not for the company.
After signing up for MoviePass, users are provided with what is basically a credit card. When a movie that they want to see comes out, they select the exact location and time they want on a mobile app and the exact amount required to see the film is loaded onto the card. Instead of paying with their own money, they swipe their pass and, after a couple times, enjoy the theater for absolutely free. The company then reimburses the theater for the tickets as long as members keep up with their monthly fee.
There are several limitations, which exclude members from using their card to see the same movie twice, to go more than once a day or see anything in 3D. However, at the killer price, those exclusions hardly seem like a dealbreaker.
MoviePass, at its core, is a flawed business model. We’ll use the example of a movie fanatic who does not have the time to sit in a theater for two to three hours a day but still takes advantage of their Unlimited Plan. If they see 10 movies in one month for the cost of $10, MoviePass still has to cough up $90 for the theaters where our member saw them. Not only is that a huge loss just for the one user, it is multiplied by over two million people.
This is not a mistake; all of the employees and investors of the company can do basic math and are aware of the risk taken with every sign-up. Essentially, MoviePass is relying on lazy or busy members who let the automatic payment roll around month after month without going to the theater. Therefore, the death of MoviePass will be the people who love it too much and, at their current price, how can you not?
In an episode of the podcast ‘Recode Media with Peter Kafka,’ CEO Mitch Lowe explains that his business is a way to save a dying industry. “For me, what’s really, really exciting is how people are actually going back to the movie theater when many people said it was on the way out.” he says.
Lowe was a cofounder of the popular streaming service Netflix, which encourages users to enjoy movies and TV shows from the comfort of their own homes. The company seemed to help the decline in theater attendance by making media available in seconds at a great monthly price. MoviePass does the exact opposite; it prompts members to return back to the movies- easier said than done.
The world has tossed aside movie theaters dates for Netflix and chill, but I think the sentiment of trying to preserve cinema is a beautiful one. However, sentiment does not pay the bills which is why big theaters are voicing their concerns.
One would think that giants like AMC would be thrilled to take part in such a business scheme. After all, it seems like partnering with MoviePass is nothing but profitable. To the contrary, some companies think that associating with such a fleeting, far-fetched idea is dangerous to their reputation. “That price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” said AMC in a statement.
While the service is currently compatible with 91 percent of theaters nationwide, it is possible that companies could start to cut ties and limit their location options in the future.
As someone that grew up on Saturday night trips to the movies, I was originally obsessed with this idea. The concept seems perfect for both casual and fanatic moviegoers, whether every card swipe brings you back to simpler times or it satisfies your inner comic book fan. However the model is unsustainable. Only time will tell what will happen to MoviePass, but perhaps it will start a revolutionary shift to save our dying theater culture.