MoviePass and its digital platform was founded in 2011 by Stacy Spikes and Hamet Watt as a revolutionary subscription-based ticketing service. It allowed users to watch one movie per day for a flat monthly fee, giving them access to the theater at a fraction of the cost. This allowed people to go to the movies more often and to experience the cinematic experience without breaking the bank. The startup quickly gained a lot of supporters and became a popular option for entertainment industry fans.
By providing an affordable option for the entertainment industry, MoviePass opened up a whole new world of possibilities. They gave people the freedom to see movies they may have otherwise not been able to afford and allowed them to enjoy the cinematic experience more often than they could have before.
So, basically, MoviePass used to buy movie tickets in large quantities and offer them to their monthly subscription. Initially, customers had to print and show physical vouchers at the theater, which proved to be a hassle. However, the customers were complaining that it wasn’t convenient to always print the movie vouchers. In 2012 MoviePass launched a new version of its digital platform app that eliminated the need for physical vouchers. The digital platform's new version of the app allowed customers to purchase and redeem tickets directly from their phones, making it much easier and more convenient for them to go to the movies. Furthermore, this shift to digital ticketing allowed MoviePass to save on costs associated with printing and distributing physical vouchers.
But, as it turns out the startup’s revenues didn't meet their expectations. In response, they appointed Mitch Lowe, a former executive from Netflix and Redbox, as the new CEO in June 2016. Lowe proposed to expand the monthly subscription options to include more categories. The company trialed this by introducing a range of prices, starting at roughly $20 per month for a basic package, and going up to $100 per month for an all-inclusive experience that included 3D movies. However, these plans were met with criticism from the public.
Consumers felt that the prices were too high and that the company was trying to capitalize on the current trend of monthly subscriptions. They were also concerned that the packages were too limited and did not include enough content to justify the price. As a result, the company had to rethink its strategy and adjust its prices accordingly.
Therefore, in September 2016, MoviePass rolled out a fresh subscription plan. With this new version, the pricing would vary by region. The entry-level package would cost you around $15 per month and grant access to two movies each month. On the other end of the spectrum, the unlimited movie experience would set you back up to $50 per month. For instance, the $15 option in San Francisco allowed users to see up to two movies per week, while the $50 option allowed users to see one movie per day.
The only problem was that this pricing wasn’t appealing to as many subscribers as they had planned to. So, in 2017 the company was bought by Helios&Matheson. And, later that year Stacy Spikes was forced to step down from the company.
Listen, what made Movie Pass so great was the fact that with a simple monthly subscription, you could go to the movies any day you liked. But that’s not enough - at least not in the long run. However, Movie Pass did have its flaws. For example, the selection of movies was limited, and the quality of the movies was not always great. Additionally, the monthly subscription fee was quite high, and it was not always easy to find a movie theater that accepted Movie Pass. This meant that users often weren’t getting the full value from the subscription, and it was difficult to justify the high cost. As a result, many users eventually dropped their subscriptions.
They assumed that it would attract a lot of new subscribers as well as get those that left back. And the objective was that MoviePass would function like any other subscription service, similar to a gym membership that most people don't use every day. However, this gamble backfired and the company was unable to make up for the lost revenue.
They severely underestimated the audience's appetite for movies. To their surprise, people enjoyed going to the theaters more frequently than they anticipated. But, let's be real, who wouldn't love the opportunity to catch a movie every day for the price of a single movie ticket? MoviePass was therefore not able to keep up with the influx of new subscribers and the cost of maintaining the service was too high for the company. For example, MoviePass was paying theaters full price for tickets purchased by their subscribers, leading to losses of millions of dollars each month.
This led to a massive debt pile-up, as AMC theaters increased subscription sales by nearly 80%. Once AMC pulled out, MoviePass scrambled to find a solution to keep their subscriptions flowing. This decision caused MoviePass to take on a large amount of debt as they attempted to find alternative solutions to replace the income they had previously been receiving from AMC theaters.
And this led to a tone of problems. Customers were complaining about missing refunds, or about the fact that MoviePass was opting them into new subscription plans after canceling their accounts. Adding fuel to the fire, MoviePass was even charging their customers' credit cards without providing prior notification. This led to more and more people canceling their subscriptions, causing MoviePass to lose money at an alarming rate.
MoviePass was facing increasing competition from other subscription services, such as AMC's A-list and Sinemia, which offered similar services at a much lower price. This put MoviePass in a difficult situation since they could not raise their prices to compete without losing many of their customers. As a result, MoviePass was forced to abandon its unlimited subscription plan to remain competitive.
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