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MoviePass To Raise Prices, Block Out New Releases To Try And Save Itself

NEW YORK, NY – APRIL 19: Guests attend A Night At The Roxy with MoviePass on April 19, 2018 at The Roxy Hotel in New York City. (Photo by Craig Barritt/Getty Images for MoviePass )

In just under a week, MoviePass ran out of money and required a loan in order to keep itself in business, blocked out folks trying to see Mission: Impossible – Fallout, saw Helios and Matheson’s (its parent company) stock plunge below $1-per share, had a system-wide crash and apparently announced that it won’t support the newest releases on opening weekend. Who knows what horrors will befall the company today? As much as I rolled my eyes at the constant drumbeat of “Is this the end of MoviePass?” every time it made a policy change, this did seem like the beginning of the end.

As of this morning, MoviePass has rolled out a new strategy. It includes (so sayeth the press release) an eventual increase in price to $14.95 per month and a block on new releases opening on over 1,000 screens for the first two weeks of release. It also claims to have implemented steps to remove 60% of their “cash burn,” which I hope isn’t merely a whole bunch of layoffs or new rules requiring users to paint create an original still life of their ticket stub. It also claims that it is generating non-subscription revenue equal to around $4-$6 per subscriber.

I’m not sure how co-financing Gotti creates more profit, but at this juncture, I’ll choose optimism. Let us hope that (and I quote), partnerships with 3rd party media inventory to increase scale and reach of marketing efforts driven by data, continued rollout and refinement of the Peak Pricing program, creating strategic marketing partnerships and promotions with studios, content owners, and brands and integration of Moviefone.com to support the media buys of brands and studios does its thing and keeps the company in business. It really has changed the moviegoing habits of its subscribers, and now would be a terrible time for it to die.

MoviePass claims to be responsible for 6% of the domestic box office (I can’t imagine a movie like Three Identical Strangers tops $7 million without it), and you can argue its relative absence hurt Mission: Impossible – Fallout’s opening weekend. It wasn’t (k)night and day, but a 6% bump in the film’s $61.3 million debut would have meant a $65 million opening and a new record for Tom Cruise. Since folks now only go to the movies when there is a movie out that they specifically want to see, Fallout being blocked out won’t (yet) create a boost for the likes of Skyscraper or Equalizer 2.

Yes, you can make the case that MoviePass, which changed its game last year by offering a $9.95-per month “see one movie per day, every day” subscription, is a classic case of a disrupter that lived just long enough to disrupt. MoviePass may not live long enough to see the promised land, but it may have changed how American audiences look at theatrical moviegoing. No, three million subscribers is not a majority of general moviegoers, but TiVo didn’t need a majority of TV watchers purchasing its service in order to become a pop culture lexicon for a new kind of TV watching.

It took less than a decade for every cable company to offer a DVR box that allowed folks to record, pause, reward and fast-forward their TV shows. We have an entire generation who will never know the experience of watching live TV as it aired or having to actually watch the commercials during the respective commercial breaks found in network and cable TV. TiVO changed things. There was no going back. And now MoviePass is both a shorthand for a specific kind of theatrical moviegoing (paying a per-month fee versus moviegoing as a pay-per-view experience) and the drizzle that started a flood.

AMC now has its own monthly service, an A-List AMC Stubs program that allows folks to see three movies a week, in any format, for $19.95 per month. Cinemark has its own plan whereby folks get one 2D ticket a month, plus 20% off concessions for $8.99. The Alamo Drafthouse chain is currently testing its own service, exact details unknown, which will involve a monthly fee for unlimited movies. The key to these competitors will be a simplicity that MoviePass, with its peak pricing and blackouts, now lacks. The core promise, a monthly fee for one movie-per day in an old-school 2D, DLP auditorium, has now been undone.

The arguable switch from using MoviePass for blockbusters as they open to using MoviePass for older and smaller movies would be a positive development if it doesn’t doom the service. The big question is whether folks will pay $14.95 to either not see the hot new movie for the first two weeks or pay $14.95 and then either use another subscriber service or just pay for a ticket to see The Meg or The Nun on opening weekend. At its core, MoviePass was always supposed to be a way to boost attendance for smaller, non-tentpole movies. The tentpoles will survive if MoviePass doesn’t.

That would be a darn shame because our theaters are currently flooded with just the kind of movies folks should be seeing in theaters. Folks with MoviePass should still be using it (while you still can) to see the likes of Sorry to Bother You, Leave No Trace and Won’t You Be My Neighbor? in a theater near you. It has been an uncommonly terrific summer for movies of all shapes and sizes, from high-quality blockbusters like Avengers: Infinity War and Mission: Impossible – Fallout to solid studio programmers like Ocean’s 8 and The First Purge to indie/small-scale fare like Hearts Beat Loud and Blindspotting.

These were the kinds of movies that MoviePass was supposed to help. By removing the ticket price from the equation, the hope was that it would boost attendance for the non-tentpole movies during non-peak hours so that old-school movie-movies could survive in a Netflix-and-Chill era. MoviePass was always going to have to find a way to make money beyond the subscription price since it was an obvious loss-leader, but (I will argue) long-term plans to monetize user data fell out after social media created a scandal over users having their location tracked. I get that, but MoviePass isn’t a mandatory service.

That consumers were outraged that they might have to give up some privacy for a month’s worth of movies for the price of one ticket is another “something for nothing” symptom that pervades our current culture. It’s that “something for nothing” mentality that is part of what may be MoviePass’s lasting legacy whether or not it survives. Now that general moviegoers, especially the regular moviegoers who made the most of their monthly subscription fee over the last year, have gotten a taste of essentially “free” movies for $10-per-month, will they then view $8-$15 per ticket as even more of a needless extravagance?

Once you normalize the idea of having new movies available at the touch of a button for a monthly fee (like Netflix), it’s hard to then convince consumers to see a movie just to see a movie, or to buy a DVD just to buy a DVD, at what used to be the standard $10-$20 price point. And now that moviegoers have gotten a taste of an all-you-can-eat buffet in the realm of theatrical moviegoing, theaters may have no choice but to make that the new normal if they want to compete. AMC’s plan will almost have to be followed by Regal’s plan and so forth.

Maybe MoviePass will survive and will morph into what I will argue it was always intended to be, namely a way for general audiences to be encouraged to take a chance on a non-tentpole movie alongside the blockbusters they were already going to see in the first place. MoviePass was made for the likes of Tully and Whitney, not Deadpool 2 and Solo. If you have a MoviePass, use it now while you can. And if you don’t, you might want to pay that monthly fee and gorge accordingly. There’s a glorious buffet of good and great movies in theaters right now.

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