MoviePass is an American movie ticket service that runs on a subscription model. It is not a new business, seeing as how it was founded in 2011. However, it made a huge change in August of 2017 when it decided that it would lower the price of an unlimited movies subscription to $9.95 per month, which is lower than the price of a single movie ticket in some places. In other words, the price is so low that it was unbelievable to a lot of movie-goers but nonetheless too good to be passed up on, which explains why the MoviePass team had to undergo a rapid expansion in order for it to be able to accommodate the increased demand.
Of course, some people might be wondering how MoviePass plans to make money from its new pricing. After all, if its subscription fees are so low, it can’t even hope to cover the costs of its movie tickets on those subscription fees. Never mind making a profit. However, it should be noted that MoviePass is more than aware of the potential issues, as shown by the fact that making a profit on subscription fees is not its intention. Instead, it wants to collect data about its subscribers using its services, which will then be used to enable targeted advertising. Combined with merchandising and some other minor sources of revenue, MoviePass hopes that the targeted advertising will enable it to function in much the same manner as Google and Facebook, which is ambitious but perhaps not beyond their reach.
Why Is MoviePass Convincing AMC to Pursue Its Own Subscription Service?
Regardless, it should come as no surprise to learn that MoviePass has provoked something of a mixed response from movie theater operators. On the one hand, MoviePass could encourage people to see more movies as well as a wider range of movies because of their lower opportunity costs, which means increased revenues for movie theaters participating in the program. Something that is particularly important at a time when movie theater revenues have been falling because of competition as well as other factors. On the other hand, other movie theater operators are less enthusiastic. In part, this is because they think that the model is unsustainable in the long run, which could have disastrous knock-on effects on their businesses should MoviePass fail at some point in the future. However, it should also be noted that some of those movie theater operators are concerned about not being able to capitalize on the same profit-making opportunities.
After all, a movie ticket service is far from being a new idea. There are more than a few examples of such services running in a wide range of places in a wide range of countries, including some being operated by the movie theater operators themselves. However, MoviePass’s price makes competition much more challenging because while price is not necessarily the end-all, be-all factor for people choosing between such services, it would certainly be one of the most important. As a result, it is interesting to note that one of the biggest movie theater operators AMC has stated its intentions to start its own movie ticket service in the United States, which would be similar to the one that it is running in the United Kingdom. However, while there are some things that said service would be able to offer that MoviePass would not, it is difficult to see how they could compete on price, which might explain some of their less than enthusiastic response to recent news.