MoviePass, a start-up moviegoing service which lets the customers watch a film per day at the theaters for just $10/month for an annual subscription, has now decided to limit its new customers to only four movies per month.
This move comes to update the terms of service comes in as the question of sustainability of the MoviePass’ business model came forth. As MoviePass is paying for the full price of the ticket to most of the theaters, the service loses money with just one or two films releasing in a month. The average price of a ticket in the US is around $9, although ticket price of $15 is coming up in some common big cities.
It is still unclear whether MoviePass will get back the one movie a day deal as it keeps changing its promotions and rates. It seems like the subscribers of the old plans are not affected but is not known if they would be able to renew their existing plan under the new generous terms off the service. MoviePass would only say that the service is “continually testing various promotions.”
MoviePass’ one-movie-a-day deal was very popular among moviegoers with most people seeing more of films by visiting the theaters more than they normally would have. Before MoviePass was established, most of the people would prefer going for movies just a few times a year. The ticket prices keep on increasing and the moviegoers have other cheap alternatives available now, including Netflix.
However, MoviePass has struck a nerve in the film industry. CEO of the AMC theater chain, Adam Aron said that the MoviePass’ ticket price is ‘unsustainable.’ The theater chain had initially threatened the service of taking a legal action, but later seems to have taken a back seat.
The service wants to work on ticket discounts as well as revenue sharing deals with the movie theaters on the promise that these strategies will help to attract more people to the theaters. The service is also trying to take a share of concession sales, saying the people are willing to buy popcorn and soda when they opt for ‘free’ movie. However, the movie theaters have shown no interest and have backed off to offer MoviePass anything.
Helios and Matheson Analytics, MoviePass’ parent company has warned in a financial report that MoviePass’ future lies in a ‘substantial doubt’ as it “has incurred losses since its inception and has a present need for additional funding.”
MoviePass currently has over two million subscribers, which is up from 20,000 when the service cut down prices to $10/month in August.