MoviePass offers near-unlimited theater visits at a staggeringly low cost

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by Trent Gleason
Southeast Associate Editor

For many, going to the movies is a way to clear the mind and relax after a long week. However, the price and inconvenience of attending a movie theater compared to options like Netflix and iTunes movies have caused the industry to falter over the years. One service seeks to change this.

MoviePass is a subscription service that was established in 2011 with the goal of making theater-going an easier, more casual experience. The service asks that the user pay $9.95 per month to attend a movie theater showing once every calendar day.

The service requires that the user download the official MoviePass mobile app, where the desired theaters and showtimes can then be selected.

Upon subscribing to the service, the customer is shipped a MoviePass MasterCard, which is used at any desired movie theater when purchasing tickets. This all works through the application. The user must first “check-in” at the theater location, which requires that the user be within a 100 yard radius to the theater, and once this action is completed, the required funds are loaded onto the MasterCard.

The service covers tickets up to $12, and if a ticket exceeds that amount, the user can cover the remainder.

Select theaters also offer “E-tickets,” allowing for tickets to be purchased through the MoviePass application without having to use the MasterCard.

Does this sound too good to be true? Many think so, and the recent announcement of the service’s new, incredibly low price point shook theater chains and moviegoers alike. Most notably, theater chain AMC took issue with MoviePass for what they felt was a unsustainable price drop.

“From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month,” AMC’s statement read.

Ultimately, the popular theater chain believes that the service will, more or less, spoil theater attendees. Since the company is confident that MoviePass will go under sooner than later, they believe that potential AMC customers will be unable to go back to paying full price for movie tickets.

In an interview with Variety, MoviePass CEO Mitch Lowe—previously involved with Netflix and Redbox—revealed concern that AMC’s statement could hurt the business.
“I’m not worried about it killing the sale,” Lowe said. “What I’m worried about is it confusing customers and making them believe they can’t use this service at AMC theaters.”
Since using MoviePass at a theater is as simple as swiping a debit card, a theater chain would effectively have to block MasterCards as a whole to keep customers from using the service.

AMC has taken steps to keep MoviePass out of their business by removing E-ticket support from a few theaters, but it goes without saying that such an effort hardly moves the needle.

“This is so much like Blockbuster was when we rolled out Netflix or Redbox,” said Lowe. “It’s the big guy being afraid of the little guy offering better value to consumers.”
Prior to the service’s price change, the company had a meager 20,000 subscribers, most likely due to the service’s initially high cost, which made it a niche product that most appealed to movie buffs.

Following the announcement of the service’s new $9.95 price point, the company’s subscriber numbers have sky-rocketed to over 400,000.

“We underestimated the response,” said Lowe in an interview with Forbes. “My wildest dream was that we’d reach 150,000 subscribers in 15 months; we hit 150,000 in two days. We had 1.3 million unique visitors to our website in four hours and it crashed our servers. And even though we turned off all our marketing and social media, we’ve continued to acquire more new subscribers than we’ve been able to keep up with.”

The massive number of potential customers pushed the service to a breaking point, causing their whole system to crash. This prevented current subscribers from using the service they were paying for, and prevented interested customers from sealing the deal.

Once customers were finally able to register, there was still the issue of how MoviePass was going to ship thousands of specially manufactured MasterCards to thousands of new subscribers within the promised span of 5-7 days.

Shipping times quickly jumped from a week to over a month. This caused mass outrage and confusion from customers, as they sought answers for why they had yet to receive what had been purchased.

“I was happy because it shows how passionate people really are about the service we offer,” Lowe said. “But we weren’t ready to fulfill the demand. Our staff was just nine people, half of them customer service reps, and we got caught unprepared.”

Ultimately, though the launch of the new price point was a disaster, MoviePass succeeded in growing their user base, and now that customers have been able to actually use the service, reception has been very positive.

There are still some wrinkles to be ironed out: having to be on location to purchase tickets is anything but convenient; tickets cannot be purchased in advance, making the process of reserving seats early mostly impossible; tickets can only be bought solo, making reserving seats with a group incredibly difficult.

All that aside, MoviePass succeeds in making going to a theater a much more enticing option, and there is no doubt that the service will only improve from here.
For more info, visit moviepass.com.

trent.gleason@tulsacc.edu

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