For movie fans, the idea of MoviePass is extremely appealing. Being able to see basically unlimited movies in theaters for a low monthly rate is an enticing proposition that sounds too good to be true -- and still may be down the line. That has been the concern and repeated criticism of MoviePass' business model. With the service subsidizing the cost of tickets for its subscribers, MoviePass is losing money on those users who really take advantage of the service and see everything. Yet it turns out that these power users are not even close to the majority. In fact, most MoviePass users see fewer than 4 movies a month according to MoviePass CEO Mitch Lowe, who recently said:

80% of our members see fewer than four movies per month, however we know there is a segment of moviegoers who use the service more frequently. We're grateful for the support of all our members and love the level of energy and enthusiasm they bring to our great offering.

This statement to Business Insider gives us a better idea of how MoviePass's subscriber base, which has grown exponentially since a price drop last year, is actually using the service. This breakdown still means that 20% or a fifth of MoviePass subscribers are seeing 4+ movies a month, which is probably more than what MoviePass would like. These users may be seeing every single movie that is in theaters, and thus MoviePass has to eat everything above the money it gets from the subscription. The national average ticket price in 2017 was $8.97, so even if users are seeing 3 or 4 movies a month, MoviePass is still likely losing money on them, unless they go to a lot of super discounted showings. Still, perhaps that 4 movie mark is the number MoviePass considers to be an acceptable and manageable loss.

The fewer movies MoviePass subscribers see per month, the better it is for the service's bottom line and sustainability. Naturally with most emerging technology and services like MoviePass, early adopters are going to be those more enthusiastic about the product and more likely to take full advantage of it. As time goes on people who are less likely to be power users will sign up. The same as insurance or gym memberships, over the long term, the service is likely hoping that the larger majority of its users use it more sparingly and offset the power users.

MoviePass has maintained that breaking even on tickets is good enough as it is continually finding new revenue streams and partnerships to make it more profitable. MoviePass has already taken steps to perhaps tamper down the frequency with which its most active subscribers use the service. After changing its terms of service, MoviePass made it so that subscribers could only see each movie once with the service, whereas previously you could see the same movie every single day for a month if you so desired. This change coincided with the release of Avengers: Infinity War, the biggest film of the year and exactly the kind of title that movie fans and probably many MoviePass subscribers would want to see multiple times. MoviePass claims that changes to its business model are helping keep it afloat and that all of the new changes with the service will not slow it down.

To see what movies you can see in theaters this year, either with MoviePass or the old fashioned way, check out our 2018 release schedule.

RELATED: Jurassic World: Fallen Kingdom Early Reactions Are In

Blended From Around The Web

 

Related

Hot Topics

Gateway Blend ©copyright 2018