MoviePass’s Latest Plot Twist: Bringing Back ‘Unlimited’ Plan
(Bloomberg) -- MoviePass Inc., the upstart movie-subscription service that threatened to disrupt Hollywood, continues to bewilder the film industry -- and its own customers.
The company brought back its $9.95 “unlimited” plan, which lets subscribers see a new film every day, not long after abandoning the service in favor of a less generous deal.
The revival of the offer marks the latest twist for a mercurial company that is striving for profitability. MoviePass had been criticized for quietly removing the option from its website in April. It replaced the plan with an offer co-sponsored by IHeartRadio that included just a handful of films a month.
“The demand for this unlimited plan is incredible, and we have a clear path to even stronger growth,” MoviePass said in a statement.
MoviePass, backed by tech firm Helios & Matheson Analytics Inc., has been a victim of its own success. After slashing its monthly price below $10 a month in August, the startup’s subscriber ranks soared above 2 million. But along the way it racked up losses and made enemies of some theater chains. MoviePass had hoped that exhibitors would help defray its costs by splitting revenue from tickets and concessions or offering bulk discounts -- a scenario that’s proven elusive.
The average ticket price in the U.S. is over $9, leading theaters like AMC Entertainment to say the offer is unsustainable. MoviePass hopes to eventually fuel revenue by forging partnerships with other companies and selling the customer data that it gathers.
Shareholder Ted Farnsworth said in an interview last week that the company was losing an estimated $12 million to $13 million a month. Farnsworth posits that MoviePass could break even when it reaches 5 million subscribers -- a target he expects it to reach by year-end.
MoviePass’s own auditors, however, have expressed “substantial doubt” about its ability to continue as a going concern.
The company has made other moves that irked customers, including a policy change that prevents subscribers from seeing the same film more than once. That thwarted repeated viewings of “Avengers: Infinity War” and caused an uproar on social media.
MoviePass said the policy “falls within our continued effort to limit fraud on our app and has been effective in doing so in the past.”
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