There’s a significant chance you’ve heard of MoviePass; the cinephile-friendly startup that has movie-lovers clamoring to subscribe. For just $9.95 a month, MoviePass-ers can see unlimited movies, in theaters. In most (if not all) cities, this monthly fee is even less than the price of a single movie ticket. While some are simply enjoying soaking in blockbuster after blockbuster, others have been left scratching their heads, wondering how the company is turning a profit.
The real MoviePass story begins in 2011, when the company was founded by technology and entertainment entrepreneurs Hamet Watt and Stacy Spikes. Originally, MoviePass offered unlimited tickets for $50 a month — still too good to be true if you’re seeing a handful of movies each month in a city like New York, where even a matinee screening can set you back $17.00.
Across the country, though, the average ticket price sits at around $9.00, and thus the firm dropped its monthly subscription rate and saw its user base explode into the hundreds of thousands in just several days — and that number currently sits around two million.
The tool functions using your current location to show you movies and seats that are coming up. In order to actually purchase your ticket, you must go to that theater and use MoviePass to secure your seat in person.
MoviePass represents an important shift in the way the average individual consumes entertainment. It was only recently that major theater chains found themselves reeling at the rise of services like Netflix and Amazon Prime, which decreased their consumer base. MoviePass offers a unique alternative that allows people to see the latest releases in the excitement of a theater setting, while still paying for the same price as your average streaming subscription.
The ticket subscription company has faced some backlash from major theater chains, such as AMC, who have expressed fears that MoviePass is likely operating at a loss and could drive theater chains to a similar state. Still, MoviePass alleges their service is available at 91 percent of theaters in the United States, including some AMC locations as well as other major chains, including Landmark and Regal, as well as many smaller, independent screens.
As for the question of how MoviePass is making due, the overall business model of the company is becoming increasingly clear. Sponsored, in-app tie-ins help studios promote their films while serving as a source of revenue for the company.
What’s more, people simply aren’t exploiting MoviePass as much as you may think. According to MoviePass CEO Mitch Lowe, the average American moviegoer is taking in only four to five films a year. While the hype of a fresh MoviePass account may inspire a slew of viewings, the company ultimately sees users peter off into more typical (a.k.a. infrequent) trips to the movies.
Among tech-based e-commerce companies, MoviePass is no doubt taking a big risk — but with such unbeatable buzz surrounding the product, it seems like this significant risk is paying off in a big way.
