MoviePass is a US subscription-based movie ticketing service. It has headquarters in New York City.
The service allows subscribers to buy a single movie ticket each day with a monthly fee.
The service uses a mobile app. When users check into a theatre they choose a film and showing time. The cost of the ticket is then loaded to a prepaid debit card that is then used to buy the ticket in the usual way.
Savings when signing up for a one-year plan
The company announced a limited-time promotion, and it will lower its fee to $6.95 per month, three dollars less than the current $9.95, if customers sign up for a one-year plan. This would work out to a flat fee of $89.95 annually including a one time fee for starting the plan.
The new plan is being made available to both new and existing subscribers. If existing subscribers switch over, they receive a 25 percent saving on their present monthly plan.
This is just the latest pricing change by MoviePass
Originally, MoviePass charged $15 dollars for two movies a day per month and even more in select markets.
In August of this year it introduced a new plan of $9.95 per month with one movie per day. This move was so successful that the company had trouble meeting the demand.
Within a few days MoviePass gained 150,000 new users. The company claimed it had 400,000 by September and through October this had incresed to 600,000 subscribers. The turnover after a month and two month's use had declined as well.
Helios and Matheson Analytics (HMNY) now are majority owners
In August HMNY bought a $27 million stake in the firm and in October raised its stake to 53.71 percent of the company. HMNY announced this month that it intends to raise $100 million to increase its investment even more.
This capital influx has made it possible for MoviePass to subsidize the cost of its subscriptions to the benefit of subscribers. However, the company is operating in the red in order to grow its subscriber base.
The company hopes to convince theater owners that they are growing their customer base so that they will profit. It also believes that it can collect valuable data on its subscribers which it can sell in the future.
The company's MoviePass works at fully 91 percent of theaters across the US.
Some theater chains are not happy with MoviePass
Business Insider named MoviePass as one of the "25 most disruptive apps of 2012" and also part of "The Best of Everything in 2012". However, not all theaters are happy with Movie Pass.
After the price lowering in August this year,
the chain AMC said that it was "actively working now to determine whether it may be feasible to opt out and not participate in this shaky and unsustainable program". AMC pointed out that MoviePass was losing money on every subscriber who saw two or more movies a month. With recent cuts to the fees, the company will lose even more. The issue is discussed on the appended video.
The business model the company used is similar to that of some health clubs. Customers pay for the service regularly but may use it only occasionally.
Other theater chains such as Regal and Cinemark are so far content to take a wait-and-see approach.
Ted Farnsworth, CEO of HMNY said about the new lower prices: " HMNY continues to be the biggest supporter of MoviePass, as it outpaces any other movie theater subscription service and continues to disrupt the movie theater industry. We look forward to helping MoviePass continue to broaden its reach and modernize the movie theater industry.”
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