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Can MoviePass’ risky subscription model sustain itself with such cheap prices?




theater marquee movies
theater marquee movies
Photo by Larry Darling via Flickr Creative Commons

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Movie theater subscription service MoviePass recently dropped its monthly fee to $9.95 – meaning customers can see one film a day at any theater in the U.S. that accepts debit cards for less than the price of one ticket at most theaters in Los Angeles.

It's basically applying the Netflix subscription model to movies still in theaters, and customers are jumping at the chance to see films on the big screen for an affordable price. Two days after MoviePass announced its new price model, it surpassed 150,000 subscribers, causing its website to crash.

After signing up for MoviePass, customers are sent a MasterCard debit card that automatically loads with the full price of a ticket when they use it to see a film. Of course, the subscription comes with some limitations. Customers can’t use MoviePass for 3D or IMAX films, and premium theaters like ArcLight and Landmark aren't included.

Some theaters that do take MoviePass are not happy with the increase in subscribers. AMC has threatened legal action against the service, and even stopped allowing MoviePass users to buy e-tickets in Boston and Denver – but because MoviePass is still paying theaters the full price per ticket, it’s not clear what they can do to prevent it, short of declining all MasterCard debit cards.

A week after the price drop, there are still many questions about how the service works. Why did MoviePass lower its subscription fee? Why are theaters upset if they’re still getting paid the full price per ticket? And is this model sustainable, or will MoviePass lose too much money to stay afloat?

Guest:

Brent Lang, senior film and media editor at Variety who has been following the story; he tweets @BrentALang