The holiday season is always big business for moviegoing, but nothing could have predicted that MoviePass – the subscription service that allows customers to buy one movie ticket a day at 91% of theaters in the U.S. – would add over 500,000 new paying subscribers since December 12, 2017. Since mid-August, when the company slashed their monthly subscription fee to $9.95, MoviePass subscribers have leaped from 20,000 to 600,000 between August 14 and October 18.
And just three weeks ago (December 20), MoviePass announced they hit million subscribers in just four months, faster than Spotify, Hulu, or Netflix (see graphic below). Today, MoviePass has announced that in less than 30 days they have added another 500,000 new paying customers, bringing their subscriber base to 1.5 million. Back in October, the company projected they would hit three million subscribers by this summer, but growth continues to exceed expectations.
“Based on the dramatic increase in the number of MoviePass subscribers over such a short period of time, we believe MoviePass will continue to grow its subscriber base significantly,” said Mitch Lowe, Chief Executive Officer of MoviePass. “We’re giving people a reason to go back to the movie theaters and they’re going in droves. With awards season here, we hope we can make Hollywood and exhibitors very happy by filling seats with eager audiences.”
There are many in the film industry, including AMC (which operates approximately half of the theaters in the country), that believe the $9.95 monthly cost is an unsustainable business model with the national average movie ticket price being over $9 (over $14 in cities like New York and Los Angeles) and with MoviePass paying a vast majority of theaters the full ticket price.
Back in November, MoviePass COO and co-founder Stacy Snipes told IndieWire that the company was prepared to take losses early on, especially during this holiday season, but that ultimately the company believes the math favors its ten dollar subscription model. According to Snipes, 75 percent of their customers are seasonal users — those who go to the movies during the summer, Oscar season, and holidays.
The key to the company’s success is dependent on customers keeping their subscription for the whole year, which is why the company has instituted a policy that costumers must wait nine-months to re-subscribe if they cancel their monthly subscription. If subscribers pay $120 annually, that is significantly more than the average American currently spends going to the movies each year. MoviePass said approximately 75 percent of new cardholders come to MoviePass having only gone to three to six movies a year. Even if the subscription service increases subscribers’ moviegoing, there is still room for growth before that $120 a year is exceeded by what the company pays for movie tickets.
It is still too early to determine how MoviePass is impacting Hollywood’s overall box office. Research indicates unlimited subscription cards – a model that’s been in place in Europe for over 15 years – doubles moviegoing and popcorn purchases of subscribers. There is also evidence early on that MoviePass users are disportionately boosting the ticket sales of speciality releases like “Lady Bird,” “The Disaster Artist,” and “The Shape of Water” – films that saw 6-13% of their opening weeks ticket sales come from MoviePass – while blockbusters and larger studio releases on average have only seen 1-4% of their box office come from subscribers.
Despite the recent increase in new subscribers, MoviePass tells IndieWire that new customers can still expect to receive their card in five to seven business days, but acknowledges that there have been processing errors on one to two percent of new orders.