To the shock of absolutely no one in the motion picture industry, or the global business world for that matter, parent company Helios & Matheson announced today that MoviePass, the on-life-support movie ticket subscription service would shut down for good on Saturday, September 14th.
The company, which had been around for several years as a subscription service that featured plans for $39.99-49.99/month, exploded on the movie-going scene two years ago when it offered unlimited movie tickets at a mere $9.99 per month. Its subscriber base soared to a high of nearly 3 million members which had a palpable affect on theatrical box office, especially for smaller and midrange films that moviegoers felt they could take a chance on as they basically saw that trip to the movies as free with their MoviePass subscription. This would prove especially beneficial to independent and Oscar nominated films which would often receive 10-12% of their box office gross from MoviePass ticket buyers.
Unfortunately, however, the company was a financial head-scratcher from the start. In an industry where the average ticket price was roughly $9.00 it didnt take an economic whiz to figure out that if a customer used his or her MoviePass card more than once a month then the company would essentially be underwater. Film rental due to the studios is based on the full ticket price, a policy that MoviePass avowed from the beginning that they would obliterate. They never did. Both the studios and exhibitors saw MoviePass as a bit of a necessary evil, one that was wonderful while it lasted, but also one to whom they would never hand the keys to the kingdom. Most industries treat middlemen with disdain. In the movie industry they are treated more like pariahs.
As the months went by and MoviePass failed to gain concessions from either the studios or the theater owners, its financial viability became more and more precarious. This eventually led to service outages, blacked out films, unavailable showtimes and a pricing plan policy that would change almost daily. Their subscribers never knew from day to day whether their MoviePass card would get them into a specific movie. In addition, the companys customer service record could best be described as appalling. One irate customer put it eloquently online earlier in the year when she said, and Im paraphrasing here, that reading the Comments section on MoviePass Customer Service Twitter account was often more entertaining than the movies that the company wouldnt let them watch.
As the company started hemorrhaging money and its subscriber base began to take a massive hit, Helios & Mathesons stock price began to plummet to the point where it sunk below a penny. Then, to make matters worse, along came AMCs Stubs A-List subscription program and customers realized they could sign up for a stable, clearly delineated subscription-based plan that wouldnt black out films or showtimes, and provided customers the added benefits of Stubs Club points and concessions discounts. The service exploded and other circuits, including Cinemark, Regal, and Alamo Drafthouse, to name but a few, followed suit with their own successful subscription plans.
Things got so desperate for MoviePass that it paused operations during the height of the most recent summer movie season. Its one thing for a service like MoviePass to pause during lighter movie-going times like September or March but doing so midway through summer was the final straw for whatever subscriber base it had left. The latest count of MoviePass subscribers showed roughly 225,000 members. The guess here is that most of those customers either dont check their credit card statements regularly or simply dont care. An exhibitor I spoke with a few weeks ago indicated to me that he never sees anyone buying tickets with their MoviePass card any longer. In effect, the service went away some time ago.
So what happens now? How the company may attempt to save face is to proclaim that it disrupted the movie industry by becoming the first entity that successfully drove moviegoers away from POS to subscription-based attendance. The only issue with that is that both exhibition and the Hollywood studios saw where content consumption was headed before MoviePass and were already planning for a portion of its customer base opting to see films on a Netflix-like theatrical all-you-can-eat basis. Subscription-based movie-going was a hot topic in the early to mid 2010s when I was Head of Sales at two Hollywood studios, long before MoviePass erupted on the scene.
Unfortunately for MoviePass, its legacy wont be as conquering disruptors of the film business. Instead it will turn out to be something entirely different and nothing to boast about.