MoviePass, the company that introduced a Netflix-style subscription model into the world of theatrical movie exhibition, has announced it will be shutting down. After losing millions of dollars pushing an unsustainable business model, the disruptive startup is calling it quits, but the subscription seed it planted is flourishing as every major exhibitor in the United States copies the model.
It's a common Silicon Valley model for a startup to lose money for several years while it grows and develops. Facebook took years to turn a profit, while Uber is still hemorrhaging money to this day, despite profoundly altering the world’s taxi industry. Over the last few years MoviePass has been a significantly disruptive force in the world of cinema, taking the subscription model successfully deployed by Netflix and Spotify, but trying to apply it to the theatrical movie-going experience.
After hitting a peak in early 2018, with millions of subscribers, MoviePass’s unsustainable business model seemed destined to fail with major exhibitors like AMC determined to not play ball, making it incredibly difficult for this new entity to survive. MoviePass was essentially paying full ticket prices to exhibitors, while offering users unlimited movies for between US$10 and $20 a month. This obviously could not last forever.
In an email sent out to all MoviePass subscribers, CEO Mitch Lowe finally broke the news.
“Over the past several months, MoviePass worked hard to relaunch its groundbreaking subscription service and recapitalize the company. While we were able to relaunch the service for some of our subscribers with an improved technology platform, our efforts to recapitalize the company have not been successful to date.”
In the email Lowe mentions the potential legacy of MoviePass, citing a number of new, similar subscription models instituted by all the major theatrical chains in the United States. Despite the limited nature of many of these second-generation subscription models, MoviePass has undoubtedly highlighted the public’s interest in this kind of model.
Of the new MoviePass-inspired offerings, Cinemark’s Movie Club is the most traditional, essentially providing one movie a month for $9 to $10. AMC, the biggest theater chain in the country, has Stubs-A-List, offering three movies a week for $20 to $24. Both AMC and Cinemark are reporting their subscription models have each collected nearly one million subscribers.
Regal Cinemas, the second largest chain, has just revealed perhaps the most aggressive and open subscription model to date, offering unlimited standard format movies at some, or all, its cinemas across the country depending on subscription tier. The most expensive Regal subscription tier is $23.50, offering unlimited access to nearly 600 cinemas.
