What Can We Learn from MoviePass?

As the movie subscription service rolls out yet another tweak, it's worth asking: where do we go from here?

Every great crime movie has the moment when they know the jig is up. The walls are closing in, the cops are on their trail, that knock hits the door and they know – it’s all over. It was fun while it lasted. They almost got away with it.

It’s tempting to think of the past month or so as that moment for users of MoviePass, the subscription service that offered moviegoers the opportunity to see one film per day at the getting-away-with-murder price of $10 per month. But we must be more accurate for this scenario; the last month has turned MoviePassers into Ray Liotta in the “May 11, 1980” sequence of Goodfellas, sweating through an extended, paranoid fever dream. Is it over? How long do I have? Am I imagining things? Yes, wear your lucky hat to the theater, I don’t know if it’ll let us check in! Are those helicopters following us?

The trouble started on the evening of July 26, when MoviePass users around the country lit up social media with reports that the service was down. The company issued a maddeningly vague explanation, but the truth came out quickly enough – they had straight-up run out of money, and had to take out an emergency loan to keep the lights on. CEO Mitch Lowe issued a statement the following day that framed the outage as a technical issue – “We have handled the issues on the back-end“ – and insisted, “our app is now up-and-running with stability at 100%.” This was wildly inaccurate; over the following weekend, the most in-demand new release, Mission: Impossible – Fallout, was blacked out entirely for most users, while other titles were either also unavailable or were marked for “surge” pricing.

That instability has continued in the days and weeks since, with widespread reports of unexplained errors, titles disappearing during the user’s trip to the theater, and refusals of reimbursement. Last weekend, the service hit its goofiest hiccup yet, with users across the country reporting that the service was offering up only two movies in most theaters: the abysmal new horror movie The Slender Man and off-hours showings of Fallout. (“Unfortunately, in order to stay financially stable we’ve had to curtail the service,” Lowe told the New York Post, in the understatement of the year.) Several theaters that weren’t showing those films were blacked out entirely.

In a way, the volatility of the service has become a side sport for subscribers, a will they or won’t they game played out in real time. Former Flavorwire editor-in-chief Judy Berman probably put it best, calling this period of MoviePass usage “a game of Russian roulette but with money.”

And thus, all eyes are on the app as it debuts the new, highly stripped-down version of the subscription today, reducing its allowance of movies from one per day to three a month– as little as one-tenth of the service, but for the same price. It will also limit access to wide release movies during their first couple of weeks of play, which was first announced in a quickly abandoned modification that would have raised the monthly subscription price to $14.95. And those tweaks followed earlier attempts to cut the company’s losses by introducing a “surge pricing” policy for in-demand new releases.

When you start tracking the changes, fixes, and backtracks, it’s easy to assume that this company is just making it up as they go along. The company has always been messy; here’s Variety item from 2011, calling the company “DOA” (in 2011!) for fumbling the launch of a $50/month phone-based version of the service, and they’ve also tried vouchers and debit cards, at a variety of price points. None of those made much of an impact, except among the most persistent moviegoers, until they launched the unlimited movies for $10/month version of the service about a year ago.

In retrospect, the $10 price point was both what made and ended MoviePass. It really did feel like we were getting away with something (I live in New York, where a single ticket, save for the earliest AMC morning shows, runs more than the $10 subscription fee – so If I used it once a month, I saved money). And while I’m no MBA, I feel confident in saying that any business model in which you’re spending money so someone can poop is not a sound one. I also feel reasonably secure in positing this question: why was the $10/month plan not just an introductory price for a trial period? Most “disrupters” hook new users with a ridiculously low taste of the service, drug dealer-style – but then, y’know, they bump it up to a sustainable price after a while. Making the money-bleeding $10 plan the standard was roughly equivalent to Netflix offering up a two-week free trial that never ended.

One can only speak to personal experience here. But I didn’t even consider MoviePass until I heard about the $10 price tag; I’d assumed it was just for people who wanted to see Marvel movies several times over at AMCs and Regals. Only upon investigating the service, because the cost was so irresistible, did I discover that most of New York’s arthouse and retro theaters took it, and thus I used the subscription as an excuse to visit those theaters more. If, after the first month or so, the price would’ve kicked up to $30, I’d have stuck with it; that still would have been a savings, and a way to support venues I cared about. (That’s also why I’ll probably remain a subscriber, even to this reduced form.)

So yes, I’m glad a bunch of wealthy venture capitalists subsidized our film consumption for a year. And the overall outcome, in which far more people are going to the movies, is a net good. But what now? Whatever your complaints about MoviePass – its Etch-A-Sketch TOS, its laughable customer service, the fun new thing where you apparently can’t cancel your subscription – there’s no denying they’ve changed the game of moviegoing. Just as the ubiquity of Napster made the idea of paying full-price for a CD of music seem (to a huge chunk of the marketplace) unthinkable, just as Netflix made the notion of a la carte physical media movie rental appear antiquated, it now feels like you’re somehow getting screwed when you go see to the movies and plunk down your $12 or $16 or (if you’re seeing it in IMAX 4DX or whatever) $24 for a single ticket.

The more sensible competitors that have already made themselves available to disgruntled MoviePass subscribers – namely AMC’s Stubs-A-List (which offers three movies per week at $20, without any new release blackouts, which is now a better deal than MoviePass) Cinemark’s Movie Club (which offers members one movie per month at a reduced $8.99 price point), and Sinemia (a similarly limited but tiered alternative) – wouldn’t get into the game if there weren’t a way to make money from it. Vox’s Alissa Wilkinson floats the persuasive theory that the model here is not Netflix, but glossy general-interest magazines like Vanity Fair and Cosmopolitan, which survive not on their meager annual subscription fees, or even on newsstand sales, but on their ads (and advertorials). It’s in the publisher’s interest to have a huge subscriber base to market products to directly, which MoviePass seemed to understand; they’ve partnered up with films like Three Identical Strangers and Blindspotting, and pushed those films directly to their email list. As a result, those films were seen by audiences that might not have even heard of them otherwise.

In other words, this can be done. The moviegoing subscription model can succeed, increasing theater attendance (and thus boosting concessions sales, which is where theaters make most of their money anyway), expanding the audiences for small but worthy films, and, ultimately, hopefully, showing a profit. But accomplishing those goals will require a company with a sound strategy. And it’s become clear that MoviePass might not be that company.