Movie theatres, Netflix style? It might be too good to survive
MoviePass is trying to let subscribers watch as many movies as they want for $10 a month.
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NEW YORK — MoviePass is trying to bring to movie
In doing so, MoviePass has struck a chord with moviegoers and a nerve with the movie industry.
For many people, going to the movies is worth it only a few times a year. Ticket prices keep rising, and moviegoers have plenty of cheaper alternatives, including Netflix.
MoviePass believes it can get people to
Subscribers with MoviePass can watch a movie a day, be it a splashy blockbuster or an indie movie contending for the Oscars.
Though MoviePass works at most
Nonetheless, the thrill of the bargain has sparked interest. MoviePass said Thursday that it signed up a half-million subscribers in less than a month, bringing the total to 2 million.
"I've seen a little over a dozen movies, which is way more than what I would have without it," said Cassie Langdon, a 28-year-old Indianapolis woman who works in sports communications and joined MoviePass in October.
Langdon said she's taking chances on smaller releases instead of sticking with blockbusters and their sequels.
Success could ultimately bring MoviePass' demise. Although subscribers pay just $10 a month, or less with promotions, MoviePass is paying most
Plus, with an unlimited plan, MoviePass has to eat some unnecessary costs, such as when a subscriber buys a ticket just to use the
MoviePass' parent company, Helios and Matheson Analytics, warns in a financial report that MoviePass' future is in "substantial doubt" because it "has incurred losses since its inception and has a present need for additional funding."
The service is ultimately counting on a "gym membership" effect: Subscribers might binge at first, but slow down once the novelty wears off. Although subscribers can cancel anytime, they wouldn't be able to sign up again for another nine months to discourage short-term memberships.
MoviePass wants to work out ticket discounts and revenue-sharing deals on the premise that it's driving more people to
And MoviePass believes it can help promote movies because it knows what subscribers see, when and where. Promotions could even extend to sending alerts to buy a soundtrack or movie poster as subscribers leave the
But several industry experts say MoviePass doesn't add much to the marketing data from
MoviePass will have leverage once it has "millions and millions of subscribers," said MoviePass CEO Mitch Lowe, a Netflix co-founder who left while it was still a DVD-by-mail business.
To get well beyond the 2 million it already has, MoviePass needs to convince people that they really want to go to movies more often. In most cities, a subscriber needs to watch 13 movies a year to break even. In big cities, it's eight.
"For someone like myself, who usually sees movies twice a year, it wasn't something I would end up doing," said Lisa Berey, a 40-year-old social worker in New York.
And consider that MoviePass' original business plan didn't work out. When the service cost $30 to $50 a month, it had just 20,000 hard-core movie fans. MoviePass slashed prices significantly in August to grow.
There's apprehension that as moviegoers get accustomed to much cheaper prices, consumer anger might be redirected at
Adam Aron, CEO of the giant
This fear isn't unfounded. In an attempt to gain leverage with AMC, MoviePass recently excluded 10 of the busiest AMC
For their part,
Meanwhile, Cinemark launched its own subscription program , though the deal isn't as good as MoviePass. Regal is testing higher prices for popular times and cheaper ones during slower periods.
"I have a hunch that most of the
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