You Know MoviePass is Dead When Elon Musk Can't Even Pretend He Can Fix It
MoviePass, the discount service for movie tickets, is raising prices by 50 percent and barring viewings of most major releases during the first two weeks. The new $15-a-month rate for up to one movie each day still won’t make MoviePass profitable.
Because it typically pays theaters the full cost of tickets – which can be $15 or more in big cities – a movie or two can put the service in the red. The old monthly rate was $10.
MoviePass has shown that many moviegoers will make time to hit theaters when movies are affordable, despite more convenient options such as Netflix and video on demand. At some theaters, it is common to see long lines with people holding red MoviePass cards, which subscribers can use to charge a movie to the service.
MoviePass has grown to 3 million subscribers, from about 20,000, since it slashed monthly rates nearly a year ago to $10, from as high as $50. The company claims that its subscribers accounted for 6 percent of U.S. box office revenue in the first half of the year.
But its financial sustainability has come into question. Last week, its parent company took out a $5 million emergency loan to pay its payment processors after missed payments resulted in service outages.
So it turns out that whole MoviePass master plan to create a new and improved way to get people to the movies and make money off of it, didn’t actually make any money….at all! MoviePass was really banking on people paying for their subscription and no one remembering they bought it. Similar to a gym membership. Similar to ESPN Insider. Except, people didn’t forget about it. Instead all three million subscribers went to the movies non-stop because that’s what they paid for. Believe it or not when you ask people to pay $10 a month and then they can go see a new movie every day, those people are going to see a million movies. When your parent company has to take out a loan to pay processors, that’s not good.
Last week, its parent company took out a $5 million emergency loan to pay its payment processors after missed payments resulted in service outages.
It’s actually bad. So now MoviePass is increasing its monthly fee and more importantly preventing people from seeing blockbusters until the third week of its release. Sooo…..what’s the point of that? You mean I can’t go see Mission Impossible the day after it happens? What does that even mean? Now you’ve rebranded your unlimited movie pass for the avid movie goer to something a guy who maybe watches a movie here and there and doesn’t care to see big time blockbusters the first week they’re out. I don’t love the business model here. What’s most concerning is that Elon Musk, the master of saying he can fix everything but not actually, says he’s got nothing for this.
Death sentence. Here lies MoviePass. It was fun while it lasted. Don’t show Chaps this blog, I don’t want to break his Purple Heart.
