MoviePass Quietly Changes its Terms and Conditions So You Don’t Use It Too Much

Like just about everyone else, when you sign up for a new service or download a new app there are those infernal Terms and Conditions (TaC) we are asked to agree to — and never read. What is just as annoying is the email notices we get about changes made to the original terms that we have either marked as Spam or delete when it hits our inbox. Most of it is legal jargon anyway, so reading it can result in many lost hours of productivity or entertainment.

Of course, those changes sometimes have a major impact on the Service or software we use. Take MoviePass as the most recent example of the little things they change that have a big impact on what we pay for. In section 2.4 of the recent update to the TaC, the company uses “any time” three times. Then there is the “from time to time” wording that limits the number of movies you can see per month.

Huh?

Their website Homepage says:

  • ANY MOVIE
  • ANY THEATER
  • ANY DAY
  • ONLY $9.95 PER MONTH

Now that feature has been somewhat limited (based on the discretion of the company) to the number of movies, theaters, and days of their choosing.

So what happened? The plan behind MoviePass was to bet on the fact that a $10 a month subscription would not be used be every subscriber on a regular basis. If you have, or know someone who has, a gym membership the idea is pretty simple. Very few people will go to the gym every day, so the cost of your membership is basically spread among other members. There was some doubt about whether the business model could hold up over time. It didn’t. And now they changed the terms to make their model work.

It’s likely there was a fair amount of subscription sharing among those savvy young people who passed their phone around to trusted friends to get a two-fer-one or greater benefit from their subscription. But even if we presume everyone is using their subscription according to the TaC, it’s hard to see how the company makes money. Netflix charges the same but you sit at home (or elsewhere) and they stream the movie to a device. MoviePass had to make money on people not using the Service and stay on top of movie prices by geographical location. A single movie ticket in New York City costs $10, which means they lose a bit of money for every user in the city every time they use the service.

For its current users, the question is whether it is fair for MoviePass to put limitations on its service. Telecomm companies did a similar thing when people were using their unlimited bandwidth plans to download every known movie on the planet. (For other uses, I had a friend who was updating 6 iPhones at a time with his connection. He probably charged them $20 a piece to do it, but I’m not sure of that.) So as is often the case, the 90% get punished for the actions of the 10%. Curtailing your use of MoviePass to keep the monthly price at $9.95 may be acceptable, especially if you are someone who is a “model” user.

Also there is the possibility that users who get cut off will dig around to find a way to sue the company, and it will shut down. The best approach seems to be to continue using it, and hope for the best. If you are a reasonable person you agree that even with the restrictions MoviePass is a good deal. Let the company deal with the people who use the service too much.

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