MoviePass - How LOW Can It Go ?

CMG has been following the MoviePass saga for several years and last week it reached new heights in testing credulity.

MoviePass, the subscription-based service which offers low movie admission pricing, seems hell-bent on trying to confound, not only, the theater chains and  major film studios but anyone who has been following their quest to disrupt the long-standing cinema admission/concession pricing tradition.

The company, last week, pared another dollar off its monthly fee, so now a subscriber is entitled to one movie ticket per day for $6.95 per month!
The only catch being that users must pay for a year upfront and there is a one-time processing fee of $6.55. So, that's $89.95 to join.

It's hard for me to count the number of times MoviePass has changed its pricing scheme. When it launched, 6 years ago, the price was $40 per month. Then it was raised to $50 per month, there were several others price changes, but most significantly, 8 months ago the price was slashed to $9.95. That change had the desired effect of increasing the user rate, which ballooned from 20,000 to 3 million!

MoviePass has many critics, most notably the large cinema chains and studios which believe the service cheapens the moviegoing experience. Additionally, studio executives stress over the fact that the company will not survive (it pays mostly full price for the movie tickets it subscribers use) and believe that its users (left out in the cold) will never want to pay the regular price of admission - now averaging $9.50.

Still, MoviePass presses on, but not without competition. A company called Sinemia, which launched several years ago in Europe, recently entered the U.S. market. Sinemia provides two movie admissions for $9.99 per month and unlike MoviePass, includes IMAX and 3D screening in its offering.  But Sinemia's two tickets per month is a far cry from the 30 admissions per month MoviePass users can obtain.

It remains to be seen if either of these disruptors will turn a profit.  For its part, MoviePass is committed to its quest of eventually striking agreements with  movie exhibitors to share in their admission and concession profits as more and more of its users crowd into cinemas. So far, that hasn't happened.

MoviePass's 'burn-rate' gets higher as they get more subscribers, so they need to make deals and they need to do that quickly. Can it drop its price to $4.95 per month?  Only time will tell.

Stay in touch,
Jim Lavorato