MoviePass hoped to disrupt the theatrical experience with $10 a month unlimited movies, but their business model may be ruining the long-term future of cinema subscription deals.
When MoviePass announced their plans to drastically lower their subscription price to $10 a month, most experts wondered what the catch was. How do you create a viable business model by promising unlimited cinema visits - with some caveats - at such a low price? Hollywood didn’t prove to be too enthused with his disruption of the cinema-going experience either.
And yet it's worked. The company has talked repeatedly of its rousing success since the price drop and the millions of loyal users, some of whom challenged themselves to see one movie a day. However, is everything as rosy and viable going into the future as it looks? With competition springing up in unexpected ways, perhaps not.
- This Page: MoviePass vs. AMC
- Page 2: Has MoviePass Outpriced The Market?
MoviePass’s Business Model is Messy
The MoviePass bubble is close to bursting and has been for many months now. In April, it was revealed that new subscribers would no longer be able to see one movie a day. The much-lauded $9.95 a month would allow for four tickets in as many weeks, which is still value for money but nowhere near the glorious deal originally offered. An upfront payment of $89.95 for a full year of unlimited access is also no longer available, and MoviePass CEO Mitch Lowe admitted that he didn't know if the unlimited plan would ever return. The plan eventually did, but no guarantee has been given that such changes will be permanent.
MoviePass has always come with caveats, such as the inability for subscribers to see a movie more than once. New problems that have concerned users include the need to pay three months of fees upfront, with no guarantee that certain movies won't be impacted by the rule change regarding repeat viewings. Last week, to add further fuel to the fire, the company announced the introduction of price surging on films that are popular with subscribers, forcing an extra fee of £2 and upwards.
Add to that the questionable finances of the company, the fact that they lose staggering amounts of money on every deal, and a recent report that the company has deep ties to an Indian company accused of fraud, and it's no wonder people are waiting for the MoviePass dream to crash and burn. Now, competition is moving in and trying to beat MoviePass at their own game.
Is AMC’s A-List a Good Deal?
Cinema chain AMC has announced their own subscription plan, A-List. The plan will allow moviegoers to see three films a week for $19.95 a month, with no extra fees for IMAX or 3D. Users can also enjoy free popcorn and drink upgrades, no online ticketing fees, and the ability to skip queues at the ticket and concession stands. Unlike MoviePass, subscribers can choose to see their three films in one day, if desired.
In strict business terms, this is a solid deal from AMC. It’s a realistic model for the cinema chain and offers perks that MoviePass doesn’t as well as extra streams of revenue for themselves, such as the concessions deals. It also feels like a better fit for general moviegoers, who make up the majority of ticket-paying audiences. Of course, if you’re a MoviePass user, even if you’re irritated by the increasing rule changes, going from as many as 31 films a month for $10 to three a week for double the price may be a thorn in your side.
Going to the cinema has become increasingly expensive and less appealing to many film lovers. Why spend $20 on a ticket for one movie to sit in a crowded multiplex with people who won’t turn off their phones when you can get a Netflix subscription for less? Cinema attendance in America plummeted to new lows over the 2017 Summer season, and while there have been major hits this Summer, those box office heights aren’t what they used to be (see Deadpool 2 and Jurassic World: Fallen Kingdom making less than their predecessors in their opening weekends).
MoviePass wasn’t so much an investment for the general moviegoer as it was a lifeline for avid fans who go to the cinema far more than the average attendee. How does anyone say no to the possibility of a movie a day for less than $10? While that may not be a possibility anymore for new MoviePass users, it’s still hard to argue with paying less for getting more; four a month is more than enough for the average cinemagoer, who see only a handful of movies a year. Even if AMC’s deal is better, people like to stick with what they know.
With the announcement of A-List, a key factor is becoming clear: by out-pricing everyone else, MoviePass is making the subscription cinema deal an increasingly impossible market for American cinemas.