UPDATE: MOVIEPASS HAS REVERTED BACK TO ITS ORIGINAL PROGRAM THAT ALLOWS SUBSCRIBERS TO ATTEND ONE MOVIE A DAY. CLICK HERE FOR DETAILS.
BY LEE PFEIFFER
Moviepass is a subscription program available to movie-goers in the USA that allows members to pay $9.95 per month in return for receiving a card that allows them to see a different movie every day for no charge at over 4,000 theaters nationwide. (The price is less if you get the card via www.costco.com, assuming you are a Costco member. Costco also includes a year's subscription to the classic movie streaming site www.fandor.com) Over 2 million people subscribe to the program through www.moviepass.com. Some skeptics have stayed away on the basis that the service was too good to be true. They were wrong. Moviepass isn't too good to be true and subscribers have become fervent enthusiasts of the service. There's no catch. From New York to L.A., from Montana to Florida, you could go to a different movie every day of the week. But now the party is at least partially over. Moviepass has been predictably bleeding red ink from its business design, which sees the company paying participating theaters the full price of a customer's ticket. Do the math. The company only gets $9.95 per month from each subscriber but in big cities, Moviepass has to pay out as much as $15 bucks a ticket to theaters every time the customer attends a movie. Moviepass has gambled that they would have enough leverage over theater chains to coerce them into revenue sharing proceeds from concession sales. But that hasn't happened in a big way even though the service can justifiably argue that theaters are selling seats to customers who ordinarily would not have gone to many movies. One of the problems is that theaters are raked over the coals by movie studios that command the lion's share of ticket revenues. It's only when movies enter extended runs that theaters get a meatier share of the ticket sales, thus they depend on sales of over-priced concessions. This is why your local big city theater now resembles a restaurant, offering everything from Mexican food to pizza, along with the ability to dine while watching the film. Theaters are stuck in a dilemma: they can deny Moviepass a percentage of those precious concession revenues but if Moviepass dies, their theaters will have far fewer customers.
Moviepass has announced a "temporary" change to its core program: new subscribers will only be able to see up to four movies a month- and customers can only see the same movie once. Existing customers can still see a different movie every day but are still barred from repeat viewings of the same film. New customers are supposed to take solace from receiving a three month trial to a subscription radio station....but that's caused a backlash because the subscription automatically continues on a pay basis unless the customer pro-actively remembers to stop it. An article in Fortune addresses the challenges to Moviepass and casts doubt on whether existing customers will be able to continue to enjoy their "movie a day" plan when they renew their subscriptions. Moviepass is already losing $20 million a month. On the other hand, even seeing four movies a month would probably satisfy the average subscriber, so it isn't known how many subscribers might defect- and if they do, what will they gain? They will just end up paying much more at theater boxoffices. It seems a happy medium is in order if both Moviepass and major theater chains can come to terms. Moviepass should get some percentage of the revenues they are sending into theaters, especially on slow nights when attendance is sparse. After all, theaters are selling far more buckets of popcorn to customers who would not be there if it weren't for Moviepass. At the same time, the Fortune article addresses the poor customer service at Moviepass, which lacks a phone number customers can call if they experience problems. The company is also rather slow in sending out important notices. When some New York City theaters dropped out of the program months ago, customers weren't notified for days, with the result being that people showed up at the theaters and were simply told their cards were no longer valid. Only after an outcry did Moviepass notify customers. Still, even a streamed-down version of the plan is a value that will continue to tempt avid movie-goers because it beats the alternatives. Click here to read more.