How the Heck Does MoviePass Make Money, Anyway?
If you’re wondering how MoviePass can make money by selling an all-you-can-eat subscription that costs less than an individual movie ticket, you’re asking the right questions. It’s reasonable to assume that there’s a catch. For MoviePass, there are two catches. First, the company expects that you’re not actually going to go to the theater thirty times a month (who has the time, and are there really that many movies worth watching?) and second, they want to sell data about your viewing habits.
That first one is the easiest to explain. According to MoviePass, their average movie ticket payout is $8.84 per ticket. They also found that 51% of moviegoers visit the theater three to six times a year. They also found that their previous customers (who were paying upwards of $35/month, so it’s not entirely comparable) would eventually settle into a pattern of going to the theater twice as often. Even if the average moviegoer doubles their attendance, they’re still maxing out at twelve movies per year.
So, it turns out MoviePass wants to make some money the same way most subscriptions do: they get you to use a product more often than you would if you had to pay per visit, but you’re still using it rarely enough to make it worth it. Every time you visit the theater once (or fewer) times per month, MoviePass makes money.
Then there’s data. MoviePass gets a lot of data about moviegoer habits, and it hopes it can leverage that for a payout from theaters and studios alike. If you decide to see more B-movies that you wouldn’t see otherwise, MoviePass wants to prove your visit came from them and get a cut. They’re also considering proposing a revenue-sharing model with movie theater concessions if they can increase attendance.
This all sounds pie-in-the-sky and it’s based on a lot of ifs, but here’s the takeaway for you: MoviePass hopes to make money, but it can’t guarantee that it will work. And in the meantime, they’ll be breaking even as long as everyone doesn’t actually use the service as much as they say you can. If you’re comfortable taking advantage of the deal while it’s around, go for it. Just keep in mind it could come crashing down if customers use it too much, if theaters and studios don’t play ball, or if the company can’t keep up with demand. All of which very possible. On the other hand, who cares what the future holds if you can save some a bunch of money on your movie addiction for now? The choice is yours.
What You Give Up With MoviePass
Thankfully, MoviePass has gotten rid of some of its old limitations that made it a pain to deal with—like only being able to watch a movie once, or requiring a year-long commitment—but there are still a few caveats that are worth knowing about before you sign up:
You can’t use MoviePass for 3D or IMAX screenings. Want to see the new Christopher Nolan film in the glorious IMAX he meant it for? Well, you’ll have to pay the normal price for it. MoviePass flat out does not pay for any theater upcharges. There’s not even a more expensive tier that includes it. At least, that’s their stated policy, though in my own experience, I found the occasional subpar IMAX retrofit in MoviePass’s listings. I wouldn’t pay extra for these faux IMAX screens, but if MoviePass is paying, then you may as well try. You can only order advance tickets at a few theaters. When the next Marvel or DC movie comes out, your theater is going to be packed. If you try to buy tickets day-of, you’ll probably end up out of luck if you’re using MoviePass. The service lets you order ahead with a few theater chains who work with MoviePass, but AMC, Regal, and Cinemark are not among them. You can only reserve seats ahead of time at a few theaters, too. This one goes hand-in-hand with the last one. Many modern theaters use a reserved seating system, so you’re not negotiating with strangers for the center seat. While technically you can reserve your seat when you get to the theater, you can’t do it from MoviePass’s app, unless it’s one of the partner chains (and again, AMC, Regal, and Cinemark are not). You’ll only be able to pick your seat when you’re physically at the theater. So if you want a good seat, you’ll either have to go to the theater earlier in the day first to save a seat, or hope that there’s space empty by show time. You have to be physically at most theaters to order tickets. Once again, this works with the last two to cause major headaches. With the exception of a few smaller chains (like Goodrich Quality Theaters, Studio Movie Grill, and MJR Theaters), you have to be within 100 yards of the theater to check in and use your MoviePass card. That may not be an issue with matinees, but if you’re planning a group outing, everyone else will be able to buy their tickets from home on the way, while you won’t be able to get yours until you’re there. For some, this might already be your routine anyway, but it’s one more possible inconvenience. You need one account per moviegoer. At the moment, MoviePass doesn’t offer couple or family plans. This quite possibly one of the biggest inconveniences. If you want to take your significant other out to a movie, you’ll each need your own account. You’ll need to pay for each ticket in a separate transaction. And you can’t share accounts, either, since the account is locked to a single phone. If I want to let my girlfriend use my MoviePass to see a movie, I’ll either need to go to the theater myself and buy the ticket, or let her take my phone. You can only watch one movie per day. Yeah, bummer, I know. This probably won’t be an issue for most people, but MoviePass uses the word “unlimited” and we don’t want you to be misled. One movie per day, then please go outside.
For the average moviegoer (and even the few obsessed ones like me), these won’t be deal-breakers, but they’re important to know. Movie theaters chains in recent years have restructured a lot to give passionate film goers—and even people who like to plan ahead—a better experience, and MoviePass doesn’t keep up with a lot of that. Seeing IMAX movies, organizing a group, or getting reserved seats are all more inconvenient with MoviePass. On the other hand, that may be worth it to you for the amount of money you’re saving.
The Real Value With MoviePass is Freedom (If You Love Movies)
So you’re giving up IMAX showings, advance tickets, and the ability to save a seat ahead of time. Plus, MoviePass is hoping you won’t actually go to the theater all that often, and they’ll sell data about your visits to the studios and theaters when you do. If you can get past all that, then you’re still faced with a basic question: do you really want to go to the theater at least a dozen times a year?
Even if you’re a film buff, using MoviePass enough can be a tall order. In 2017 there was an average of 11 movies with national releases every month. That sounds like a lot until you have to sit through them all. If you wanted to get the absolute most out of your subscription, it means you’re starting your December with Polaroid, then The Disaster Artist, The Shape of Water, and Just Getting Started, all in the next week. You’ve gotta get through them fast because Star Wars: The Last Jedi, Ferdinand, and Jumanji: Welcome to the Jungle land the week after that. Then you can cleanse your palette with Bastards, Downsizing, and Pitch Perfect 3, before you settle in for The Greatest Showman on Christmas day.
You’re doing well if you’ve even heard of half those movies, much less if you want to see them. Contrary to MoviePass’s lofty marketing, the value in the subscription isn’t in going to see every movie. It’s in being able to see any movie. Only want to see The Last Jedi this December? You got it. Interested in The Shape of Water, The Disaster Artist, and Jumanji? You’ll pay the same price! Want to sit out this whole month but binge next month? Heck, you can cancel and re-up whenever the movies you like come out. You can hit the theater on a whim, or check out a movie that looks kinda crap without wasting anything but your time.
That deal isn’t going to appeal to everyone, of course. If you’re the type who doesn’t like movie theaters, thinks most of what Hollywood puts out these days is garbage, or if you just don’t have the time to visit the theater, then you’ll probably want to skip MoviePass. On the other hand, if you can find at least a dozen movies a year (and preferably more) and don’t mind putting a little extra work into getting your ticket, MoviePass is going to be a dream for you.
Image Credit: Deklofenak/Bigstock.
