Tuesdays with Tom: Is Movie Pass Too Good A Deal?
How many times have you heard about a deal that sounded too good to be true? There’s almost always a string attached, a Catch-22, a deal-breaking compromise you have to make with yourself. When I first heard about Movie Pass, I instantly asked myself this initial question. Movie Pass has been a hot topic of discussion in 2018 and many others are wondering how the hell this company’s simple premise is going to outlast it’s questionable and rapidly changing business model. How long will this ridiculous sounding deal last? If you’ve never heard of Movie Pass, you’re in luck. It’s this week’s Tuesdays with Tom topic. If you have, well guess what you’re still going to read about it anyways!
Movie Pass is a subscription-based service that allows you see movies in the theater for extremely cheap prices. Think of it as Netflix but for movie theaters. Here’s how it works. I got a Movie Pass debit card with my name on it about a week after signing up. I downloaded the Movie Pass app on my phone and looked up some theaters to see if it they were Movie Pass eligible. I checked into a showtime once I’m at the theater, showed them I checked in and they swiped my card to pay for the ticket. For $9.95 a month I can see one, 2D movie per day at any Movie Pass-participating for the entirety of that month. That means technically I could see 30-31 movies in the theater every month if I really wanted to.
Movie Pass was founded in 2011 but didn’t do much until hiring a guy named Mitch Lowe to be their new CEO in June 2016. He came from Netflix and quickly updated Movie Pass to switch their pricing from $50 a month for unlimited movie screenings to the $9.95 deal I received. His goal was to significantly grow the number of Movie Pass users, knowing that they’d operate at a loss for awhile, and then worry about making the money back later. Movie Pass went from 20,000 subscribers to two million in one year. Right now, Movie Pass’s main draw of customers are people who frequently go to the movies. If you go once a month, it’s a good deal. If you go more than that, it’s a huge steal. But for this to truly work out long term, Lowe is essentially hoping that people like treat Movie Pass more like they often treat gym memberships: pay every month but only use on occasion.
How are people using it currently? The company conducted a survey of their users and the results are fascinating. 83 percent of those surveyed are “more satisfied with Movie Pass than any other subscription service.” More satisfied, in theory, then Netflix, Spotify, Amazon, Blue Apron you name it. That would explain why users are going so frequently to the movies. Per the The Hollywood Reporter, “On average, subscribers have taken six more trips to the cinema in the past six months than nonsubscribers, while they are twice as likely to go on opening weekend. And nearly half of MoviePass customers say they are now willing to take a trip to the theater alone, while a hefty number (42 percent) happily go midweek.” So in short, people are going a lot more than the average American moviegoer.
If there’s been any catch with Movie Pass so far, it’s how often they’ve changed their offering. I’ve been a member for four months and in that time alone, Movie Pass has changed their new customer deal four different times, including twice in the same week! First they lowered the price from $9.95 to $7.95 a month in February. Then it went down to $6.95 in March. They’ve tested out upfront 12-month commitments rather than monthly charges, which was an unpopular move. They even tried to bundle a bizzare 3-month deal for $29.95 that came with a free trial of iHeartRadio (raise your hand if you’ve ever met someone who subscribes to iHeartRadio). Last month they made their most controversial decision publicly to date. They quietly removed unlimited viewings of the same film for users. It was a troubling sign that took direct aim at one of the services biggest current benefits. Was it a coincidence that this announcement came shortly before the release of Avengers: Infinity War, projected to be one of the biggest movies of the year? I don’t think so. Fortunately after two weeks, the company changed their mind and reinstated unlimited viewings. They’re not established enough to be alienating their current user-base.
Aside from a volatile business model there is another major problem for Movie Pass. AMC, the largest movie theater chain in America, is openly rooting for the company to fail. Think about it. Movie theaters in major American cities often charge much more for one adult ticket than Movie Pass is offering for the right to see several movies at a time. If you see five movies at an AMC with Movie Pass, that’s five times they aren’t making money off you in ticket sales. Despite this, it doesn’t stop them from partnering with Movie Pass (who claims 91% theater coverage in the U.S.) and the average Movie Pass user is spending $15 per showing on concessions. I know from personal experience that I feel more inclined to get concessions since my ticket is “free”. Movie Pass is still a niche audience, but if they grow to the 30-40 million subscriber counts that would cover the size of the American audience that sees one film a month, it could be a game-changing arrangement for all theaters involved.
It’s too early to say whether Movie Pass is the next Netflix or Spotify or if it’s more like the ill-fated Sean Parker projects Screening Room (which offered users a $50-per-month plan to get opening weekend movies streamed to your home) or Napster. It’s currently very successful at generating press and making a fairly committed group of moviegoing superfans very happy. Can they take the next step at a more mainstream audience? It’s hard to say. My guess that Movie Pass is doing wonders for fringe-type “in the theater” movies. I can count three movies on hand right now that I used the service for that I never would have considered if I had to pay full price for a ticket. I’m also an early adopter for one of their initial offers. The deal is likely to change as the service grows and how it grows remains to be seen. The company will need advertising revenue to survive (users currently get sent emails and push notifications promoting films and other products). Frankly, they’ll need people who sign up for the service and only use it a few times a year. Most of us already pay for a number of subscriptions without thinking much about it. The difference with Movie Pass is that it requires a lot of active, physical participation to get full use of it. So now you know how this works. Does it still sound too good to be true? Even 65% of Movie Pass users think so. Personally, I’ll be enjoying the perks for as long as I can.
Tom’s Thoughts of the Week
I eventually picked My Boy Jack as my predicted Derby winner. He finished 5th place, which is two spots shy of earning Win, Place or Show (the horse equivalent of Gold, Silver and Bronze). Instilled Regard, whom I slandered in last week’s newsletter, finished fourth at 85-1 odds. The winner was the favorite, Justify. Big surprise, I still know nothing about horse racing. We’ll check in on Justify at the Preakness Stakes in a few weeks.
Loyal White Sox fan update. I went to a game on Friday and saw two things I’ve never seen before at a game. The first one was a very sad showing attendance wise (nothing new for the Sox) that prompted the team to literally close off the 500-sections of the stadium. That’s right. Not a single person either attending or working in the stadium was in the highest third of the stadium. The other astounding thing was while I waited in line at concessions, I saw not one but TWO separate fist fights break out within 15 seconds of each other. The first one made its way directly next to me in line and I politely pushed these two gentleman out of my way. So I kind of was involved in a fist fight at a sparsely attended Sox game. Big Friday night for me.
Avengers: Infinity War is currently on track to be the most financially successful film of all time. It must have been a daunting task to balance so many different characters, storylines and also provide thrilling action sequences, but I think this movie pulled it off wonderfully. I openly cheered more than a few times in the theater. I won’t spoil more than that, but this will definitely be a game-changer for many characters in the MCU.
I’ve thoroughly enjoyed a lot of Kanye West’s music over the course of his career. I respect his artistic talent. But outside of that, I don’t take anything he says seriously. That’s all I have to say about that.
My run as a bandwagon Philadelphia 76ers fan is about to come to an end. What a pathetic showing by them in this series against Boston. Turns out we were all jumping the gun on this team being mature enough to make a run to the Finals. And once again, LeBron benefits from a perennially weak Eastern Conference. Ho hum.
Imagine you are a boss on one of your top employees tells you that they’re considering retirement. Then a year goes by and this person says they’re still considering it. So then you decide to hire a young up-and-coming person for them to mentor and potentially replace this person in the next few years. Pretty understandable right? Well what if the retirement-flirty person’s reaction was “Hey what the hell, I think I could work for five more years. What gives?!”. If that makes no sense to you, I present you with Ben Roethlisberger’s comments about the new Steelers rookie QB Mason Rudolph. Here’s an idea Ben. Maybe DON’T suggest you’re retiring if you don’t actually mean it. It’s not like anyone believed he was going to turn down $20 million plus a year in salary if he is healthy and good enough to continue playing. Why then be so shocked if your employers want a potential plan for the future? That’s all I have to say about that!