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The Rise And Immediate Fall Of MoviePass

Updated September 13, 2019 9.4k views17 items

From an outsider's perspective, MoviePass appears to be some sort of mystical phenomenon. For less than $10 per month, viewers could watch potentially hundreds of movies a year. Given the average ticket costs $9, how in the world did MoviePass plan to make money? Netflix has a long-term strategy that seems to make sense, and Amazon saves money by turning their warehouses into the ninth circle of hell, but how did MoviePass think it would work?

For a while MoviePass appeared to know its strategy wasn't entirely viable in the long run. The company attempted several different ways to turn the business around and make it profitable. But MoviePass announced in September 2019 the company would be shutting down for good, and moviegoers no longer get such a large cinema discount. 

MoviePass revealed it was struggling in August 2019 when the company confirmed a security lapse exposed customer records, including MoviePass card numbers and credit card information. The leak was immediately secured, but customers were concerned about the safety of their personal data. One month later, the company announced it was closing down. 

  • MoviePass Shut Down On September 13, 2019

    Photo: Back to the Future / NBC Universal

    On September 13, 2019, MoviePass officially announced it would shut down the following day. MoviePass's parent company, Helios & Matheson, lost 10% of their shares when they made the announcement.

    In the statement they sent to subscribers, Helios & Matheson said, "efforts to recapitalize MoviePass have not been successful to date" and that "the company is continuing its efforts to seek financing to fund its operations" but "there can be no assurance that any such financing will be obtained or available on terms acceptable to the Committee."

    MoviePass went from 3 million to 225,000 subscribers in April 2019 and laid of several employees focused on building relationships with movie theaters, foreshadowing its impending end. 

  • MoviePass Paid Full Price For Tickets 

    With a few exceptions, MoviePass basically pays full price for every single ticket their subscribers purchase. Though they tried to partner with larger retail chains like AMC and Regal, they just couldn't make it happen. As far as most theaters are concerned, MoviePass is basically your rich friend who seems totally willing to purchase your movie tickets for you.

    AMC doesn't care if it's your name or MoviePass on the card, as long as they get their money, they're okay with it. As you might imagine, this in and of itself isn't a great deal for MoviePass in the long run. On July 26, 2018, the service experienced an outage after MoviePass was unable to afford tickets. The company borrowed $5 million in cash to remedy the shortage.

    On July 30, 2018, the service went black. Users saw an error message on their screens reading, "Error getting available plans. Please refresh browser." This happened after the company experienced four outages within a week's time. 

  • The Company Started Selling Merchandise

    In June 2018, MoviePass subscribers started getting promotional emails from the company advertising official merchandise. The store featured T-shirts, hoodies, and mugs that don the company logo in an array of black, red, and white. All of the items have movie title pun names, like "Hood Will Hunting" and "Hat Damon."

    The store also featured some limited-edition wares from popular films, like Black Panther. Under the "About" section of the site, it is suggested "Since you made this trip to the MoviePass Store, you might as well bring something back with you to the real world. Like a MoviePass T-Shirt, or a Hoody, to name just a few unbiased suggestions."

  • Surge Pricing For Popular Movies Began In July 2018

    In an effort to make some financial gain, Moviepass announced that they were introducing surge pricing – or what they are calling "high demand pricing" – for popular movies. 

    "At certain times for certain films – on opening weekend – there could be an additional charge for films," MoviePass CEO Mitch Lowe said to Business Insider. This new pricing rule only applied to members who have month-to-month subscriptions, not the people who have yearly ones. Generally, the surge-pricing started at around $2, likely for blockbuster films like Marvel movies. 

    The company is also introducing a "Bring A Friend" option which allows members to purchase tickets for friends who are not part of the service. The price of the ticket is "somewhere near the retail price of the ticket," according to Lowe. The logic behind this is it will make it easier for MoviePass members to purchase seats next to their friends who don't subscribe to the service. 

    MoviePass also introduced the ability to pay a "premium price" option for members to see films in IMAX or 3D. Subscribers paid their normal monthly fee and then between $2 - $6 was be added to the ticket price.