Moneybox

MoviePass Will Work This Time*

*If by “work” you mean “won’t instantaneously blowtorch tens of millions of dollars’ of wealthy people’s money.”

The MoviePass logo, on a smartphone.
Welcome back, friend. Photo by Pavlo Gonchar / SOPA Images/Sipa USA)No Use Germany

MoviePass flamed out spectacularly the last time anyone had anything to say about it, but it was a marvelous trip into the sun. The company was founded in 2011, but it was in 2018 that a new ownership group came up with a business plan that basically amounted to lighting money on fire and allowing us, the moviegoers of America, to watch several (or many) films per month on the dime of the parent company’s investors. Specifically, MoviePass charged a little bit less than $10 per month and, with only a few nonintrusive exclusions, bought us tickets to see however many movies we wanted in theaters. Movie tickets cost right around $10, and MoviePass reportedly paid the full freight for each ticket. So, any MoviePass subscriber who went to more than one movie a month was bleeding the company dry. It was awesome, and MoviePass’ parent lost a quarter of a billion dollars in the first three quarters of 2018 before the money people decided that their largesse had reached its limit. Nothing good ever lasts.

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By all rights, that is where the MoviePass story should have ended. Some investors who probably live in Connecticut or the Bay Area spent a few months subsidizing our collective film-inhaling habit, and then they realized this was a problem and started imposing user limitations and pulling shenanigans, and then the company went bankrupt in 2020. The end! But it wasn’t, because MoviePass’ original founder, Stacy Spikes—who was not the guy who decided to buy us all those tickets—bought his company back in 2021 and began plotting a relaunch. MP-Day is now approaching, and MoviePass will soon exist in yet another iteration. “We’ll let you know when you’re eligible to sign up!” the company is emailing potential customers.

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I am more curious about MoviePass 2.0 (or maybe it’s 3.0; it’s hard to say) than I should be for a money incinerator that paid for me to see The Spy Who Dumped Me on the silver screen. But I had such a rollicking good time with MoviePass for a month or two that I cannot resist this comeback story. Can MoviePass succeed this time? I wouldn’t bet on it. The fundamentals don’t look that strong. Yet the people who drove MoviePass into a glorious crater are no longer in charge, and maybe Spikes can at least beat the existing bar by performing the relatively simple task of not losing $250 million in nine months while a nation of cinephiles squeals with glee.

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For one thing, the business plan this time around looks a little bit more thought through than “charge people $10 a month for nearly unlimited movies and pray they don’t take you up on it.” The idea in MoviePass’ last go-around was that a movie subscription would function kind of like a gym membership, in that too many people wouldn’t use it all at once to make the entire thing unsustainable. Whoops! Meanwhile, the theory went, MoviePass would cultivate a big, loyal user base that it could eventually use to extract goodies from theaters, like discounted tickets or a cut of concession profits. I do not know if that ever could’ve worked, but we never got to find out, because, well … [gestures at the roughly quarter-billion-dollar losses]. MoviePass was far from the only company of this era to intentionally take huge losses in the hopes of making something out of them later on. It was, if anything, a little bit too wrapped up in a theory of business that has also defined far more successful companies—even those that have toiled for years to just now scratch the surface of making a profit.

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This time, Spikes says, MoviePass has prenegotiated ticket deals with theater chains, though it sounds from this NPR interview like mega-chains AMC, Regal, and Cinemark are not included. Spikes also says there will be varying subscription prices from $10 to $20 to $30 per month, and they’ll involve a credit system that makes it pricier to go to popular movies at peak times. That should depress demand somewhat and may even spare MoviePass from hemorrhaging cash in the same manner it did last time. It will also make the product less appealing, and that’s a problem. It’s hard to offer a better perk package than the “buy one movie ticket, get a handful in return” approach of the old days.

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In addition to the less obviously ridiculous business plan, MoviePass has a lot of name recognition, an email list of what should be several million possible return customers, and presumably some sense of who the people behind those email addresses are: where they’ve gone to movies before (in 2018), what kind of movies they liked (in 2018), how often they went to the movies (in 2018), and maybe more. Spikes can’t wave a magic wand and make MoviePass a good business with any of that, but profitable businesses have started with less. Sure, MoviePass burned some goodwill when it attempted to uncancel a bunch of accounts and block users from using the service the way it was advertised. But I think I still remember it fondly? Maybe it’s because I canceled a month or two ahead of time in fear of being collateral in the wreck.

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None of this is practical for the moment, but I could envision a world in which MoviePass has a nonterrible few years, raises some more money, and becomes a public company on its own. (Its one-time acquirer, Helios and Matheson, was public before its management of MoviePass preceded it no longer being a company at all.) In that world, is MoviePass well-liked enough to cash in on the market’s continual memestocking? You can’t really plan for a bunch of Redditors to fall in love with your stock and drive it to the moon, and maybe there are some hard feelings between AMC’s APEs and MoviePass. But, hey. Sometimes water falls under the bridge, and some of us think MoviePass is at least a valiant public servant for having bought us so many good afternoons four years ago. Maybe MoviePass, too, can one day sell some stock into an internet-bred rally and use the funds to shore up its business for the long haul. (If nothing in this paragraph makes sense, then congratulations on understanding business as of two years ago. It was a calmer time.)

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The new MoviePass is already going to be a pretty internetty sort of thing. It will be metaverse-ish, as Spikes recently told Inc. He said things like, “Customers, theaters, and studios will be able to trade in everything from commemorative NFTs to digital currency and more,” as well as, “These emerging technologies will allow us to build a full end-to-end cinematic marketplace that we have dreamed of for some time.” The burden is on MoviePass to explain to the rest of us how any of that will serve its goals as a movie subscription service or make our lives better as people who enjoy movies. I do not understand it, will not lie to you about understanding it, and am only 40 percent sure that MoviePass itself understands it.

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I am also not sure if the next MoviePass is ideally suited to our times. Movie theaters weren’t pandemic winners. There are still a lot of theatergoers in this world, but the biggest chains (AMC among them) took cues from Old MoviePass and started their own subscription services. It’s a little easier to not bleed money on tickets when you are the ticketer, and so to whatever extent there’s an appetite for a movie subscription service, even a much smarter MoviePass might be a blackjack player going against the house.

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Thing is, gambling against the house is a significantly better plan than MoviePass employed the last time it was prominent in the public conscience. As long as New MoviePass can lose something less than the GDP of a small nation in its first, say, half-year back in the world, it will have been an improvement. An email sat waiting in my inbox all day prompting me to sign up for the new product’s waitlist, and a few minutes ago, I clicked on it and (re-)entered my email address and zip code. I will see MoviePass in heaven.

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