MoviePass’s recent shake-ups—like charging surge fees, ending its movie-a-day plan, and limiting movie selection—have kept subscribers on the edge of their seats. After abandoning the pricing model that made it famous, MoviePass has lost some of its new customer appeal but, through July, existing customers are still sticking with the struggling service.
July attracts fewer signups than average
We first looked at MoviePass when growth for the ticket subscription company was on an unstoppable ascent, reaching 2 million subscribers in February 2018. While signups have continued to grow steadily, MoviePass has—at times deliberately—tested the limits of what subscribers will tolerate.
When peak pricing rolled out July 5, MoviePass may have pushed the envelope too far by forcing subscribers to pay additional fees to see in-demand movies at popular times. In July, signups were 13 percent lower than the monthly average since the $9.95 plan launched. New signups may also have been deterred by July service outages—not exactly the kind of box office plot twist subscribers were hoping for.
MoviePass also struggled to acquire new subscribers back in April. The slowdown coincided with the removal of the movie-a-day plan to test out a new package offering four movies per month. That month saw 28 percent fewer signups for MoviePass, compared against the monthly average. And, starting this month, all subscribers will be similarly capped at three movies per month.
As of July, 1 percent of all U.S. consumers have tried MoviePass and, back in March, CEO Mitch Lowe claimed that 6 percent of all cinema ticket sales were generated by its subscribers. Since MoviePass covers the cost of full-price theater tickets for its members, its rapid subscriber growth has caused the company to lose money at an alarming rate.
One-eighth of monthly subscribers shelled out during the surge fee experiment
When peak pricing began, as expected, surge fee transactions were concentrated around weekend showtimes. The added cost started at $2, with fees rising as high as $8. Three-quarters of all July fees were under $5, although fee amounts increased dramatically by the end of the month. In the last week of July, 72 percent of collected fees were over $5.
Just one month later, surge fees are already a thing of the past, and only 12 percent of monthly customers ever paid them. The peak prices were allegedly determined by “holistic demand,” although subscribers complained about MoviePass’s rather loose definition of peak. In the past, Lowe has been less than candid with the public about MoviePass’s marketing practices, and it’s within the realm of possibility that surge pricing was yet another tool to show theaters and studios that MoviePass can manipulate its subscribers’ behavior.
Despite hard times, subscribers are sticking around
Peak pricing is gone and, somehow, seems not to have taken too many customers along with it. In fact, retention data shows that subscribers aren’t ready to roll credits on MoviePass just yet. For the $9.95 monthly plan, month-over-month retention remains strong—89 percent of June subscribers returned in July, which is only slightly lower than Netflix’s month-over-month retention rate that same month.
Throughout 2018, MoviePass’s month-over-month retention has actually improved as new members—who may falsely appear to churn due to delays in MoviePass’s first billing cycle—represent a smaller proportion of its subscriber base. Overall, retention doesn’t reflect the volatility of MoviePass’s rocky financial position. And why would it? Subscribers are, after all, still breaking even on the cost of membership after as little as just one trip to the theater each month. It remains to be seen if MoviePass’s ongoing antics will drive subscribers to jump ship, perhaps in favor of a competitor.
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