In a move that seems to borrow business strategy from Mel Brooks’ protagonists in “The Producers,” who attempted to stage an intentional Broadway flop and oversell production shares for profit, recent changes to MoviePass policy suggest the service’s profitable subscribers are the ones who use it the least.
While MoviePass remains $9.95 per month for an annual subscription, there’s two significant changes to the terms of service, both designed to throttle the number of MoviePass users in theaters. Where subscribers could once see a movie every day, they’re now capped at four tickets per month. Instead, subscribers now receive a three-month trial to IHeartRadio All-Access — one that automatically converts to a $9.95 monthly subscription unless the subscriber contacts the radio service to cancel. And, as MoviePass TOS makes clear in all caps: “THE SERVICE PROHIBITS REPEAT VIEWINGS OF THE SAME MOVIE.”
MoviePass and iHeartRadio announced the bundled promotion April 13, when it was pitched as a new option for MoviePass subscribers. However, it is currently the only subscription offered on the site, and users must dig deep into the MoviePass FAQs to learn that they will become paying iHeartRadio subscribers after the trial period if they fail to cancel. iHeartRadio filed for Chapter 11 bankruptcy protection March 15.
The MoviePass repeat policy comes into service just as Disney releases “Avengers: Infinity War,” a Marvel film that’s expected to inspire repeat viewings from a raft of passionate fans. In a statement released late Friday, MoviePass said the move to block repeat viewings “falls within our continued effort to limit fraud on our app.”
The MoviePass statement also suggested that swapping unlimited movies to a four-per-month cap and an auto-subscribing radio service was designed as a promotional service for its users: “We’re continually testing various promotions with different partners, and the current iHeartRadio deal is consistent with that approach. This does not mean that our unlimited subscription will not be offered in the future.”
In an interview with The Hollywood Reporter this week, MoviePass CEO Mitch Lowe seemed considerably less bullish on the prospects of reviving his service’s all-you-can-eat buffet, saying he was unsure the offering of daily tickets would return.
The MoviePass updated terms go on to note that:
MoviePass reserves the right to change the rules of movie-going attendance and ticket availability to members in connection with the Service at any time. MoviePass reserves the right to change from time to time the number of eligible movies a member can see per month. MoviePass reserves the right to offer members a new price option if they exceed watching a certain amount of movies per month.
Data firm Helios and Matheson Analytics purchased MoviePass in August, dropping its subscription price below $10 for the first time. Since then, MoviePass membership exploded from fewer than 20,000 subscribers to more than 2 million. Despite losing money on almost every ticket transaction, the company has made pricey acquisitions, like joining The Orchard to buy “American Animals” for $3 million out of the Sundance Film Festival (content for its MoviePass Ventures catalogue), and paying $23 million for ticket-buying app and website Moviefone.
Last week, Variety reported that Helios and Matheson lost $150.8 million in 2017, including the cost of acquiring MoviePass.
In an April 5 phone interview with IndieWire, MoviePass CEO Mitch Lowe gave no hint of the imminent changes. “There is a service called MoviePass where for $10 a month, you can go to a movie a day at almost every theater. I’m not saying we’re perfect. We definitely have not delivered a perfect service. We’ve grown so fast, we just haven’t kept up with a lot of things.” Yet his optimism would not be deterred: “If you ever talk to someone who has not heard of MoviePass, and you explain it to them…they go, ‘That’s too good to be true. I can’t believe — I mean, what’s the catch?’ And I explain to them, ‘There is no catch.”