The movie-ticket subscription service has quietly solidified its position as a viable, low-cost way for regular folks to see a whole lotta movies. Under the leadership of CEO Mitch Lowe (a former a Netflix and Redbox exec), MoviePass slashed its monthly fee from around $50 to $9.95 — growing its subscriber base from 200,000 to over 1.5 million over the past year. This pricing change also jumped their monthly revenue to nearly $15 million. Success!
MoviePass is still losing money, unfortunately. They buy tickets in bulk, but they’re still paying far more per ticket than their subscribers (by a wide margin). Behind the scenes MoviePass also collects customer data, which they sell to Hollywood studios, analytics companies, and other marketing-related industries. It’s still not enough.
Their next big initiative, announced at the Sundance Film Festival, is MoviePass Ventures, a subsidiary that will co-acquire films with distributors, according to Variety. Essentially, MoviePass will partner with these distributors to identify promising new films, purchase them, and then release them to other platforms (streaming, DVD, on-demand).
Lowe offered these comments at Sundance, as reported by SlashFilm:
We’ve experienced enormous success bringing people back into the theaters since our launch in August and with an influx of business from distributors, have proven the impact of our marketing over and over again, giving them an incremental lift in ticket sales. Given the successes we have demonstrated for our distributor partners in ensuring strong box office in the theatrical window, it’s only natural for us to double down and want to play alongside them – and share in the upside.”
MoviePass has been quietly running deals and specials to get their subscribers to see particular films, increasing the box office revenues for those projects (and presumably theater concessions too). In December, MoviePass ran an email promotion for the indie film, I Tonya — any subscriber who saw the film was automatically entered into a contest to win a free 12-month MoviePasses. The company has also been buying up tickets to other indies, like The Post, Call Me By Your Name, and The Shape of Water. Apparently, MoviePass was testing their ability to shape audience interests, and it’s working.
The risk for MoviePass is obvious: indie films are hit-and-miss. Even festival darlings can tank at theaters — The Birth of a Nation won in 2016, but made barely $15 million domestically. For a company struggling to turn a profit (despite increased revenues), this move has thorns. Dangers aside, this new venture is turning heads across Hollywood.
MoviePass’ end-game isn’t clear yet, but their aggression is admirable, and the industry is taking notice. If they can continue attracting subscribers, while also retaining their existing base (through promos and other incentives), the company has a shot at establishing a new Hollywood business model, at a time when audiences are dwindling and production costs are rising.
MoviePass seized a unique opportunity while the major studios were focused on defending themselves against online pirates and streaming services. They’re zigging when everyone else is zagging. Even if this new initiative doesn’t pay off, they’re still shaking things up, and (for a change) it’s kind of great for consumers, too!