MoviePass 3.0 – Night of the living dead

Here we go again.

• MoviePass has emerged from Chapter 11 bankruptcy with yet another crack at the cinema subscription market after two failed attempts and a short sojourn with crypto and although this time there is a shred of economic rationality, I am not optimistic regarding its future.
• MoviePass first showed up in 2018 (see here) offering a fixed subscription where users could go to the cinema pretty much as often as they wanted for a fixed fee.
• The problem was that MoviePass was paying the cinemas for each visit, resulting in fixed revenues where the user was incentivized to visit as much as possible meaning that costs would soon spiral out of control.
• This hare-brained idea didn’t last long and after a couple of pivots, the company entered Chapter 11 bankruptcy.
• Somehow MoviePass has persuaded a venture capitalist somewhere to part with some cash and so the company has emerged from Chapter 11 and is ready to have another crack at the cinema-going market.
• This time the service looks much more like Audible where the user buys a number of credits over the subscription period which can be redeemed for seats at the cinema.
• Variable pricing has been applied such that seats for shows before 3 pm and during the week cost more credits to redeem than evening and weekend shows.
• Audible has been able to make this work partially as it is owned by Amazon but also because it now creates a good amount of its own content meaning that its costs are relatively fixed.
• This is where MoviePass is likely to fall over yet again because I fail to see how the cinema chains will give MoviePass a low enough price so that it can eke out a spread between the user and the cinema.
• The idea here will be to promise the cinema chains so much more business that they will be willing to offer MoviePass much lower pricing so that it can offer the users an incentive to buy the credits and still make a profit.
• This is a big ask as MoviePass has a terrible reputation and a history of failing to live up to its promises meaning that the cinemas are unlikely to pay it much attention.
• It will need to win some major user traction before the cinemas take it seriously and there is nothing to stop them from offering a similar service of their own as they did with ordinary subscriptions.
• I also think that the “we can provide you with useful data to understand filmgoers better” ship has long since sailed and so this pitch is likely to fall on deaf ears.
• Consequently, the end result is likely to be another ignominious failure followed by a final closing of operations.
• This goes into the same category as Faraday Future where I would not put money into this under any circumstances.