Tag Archives: Stacy Spikes

MoviePass Adjusts Pricing For Beta Subscribers

MoviePass Banner

Just last week we wrote about how the unlimited moviegoing subscription service MoviePass benefited from being agile and developing their business in an iterative fashion. This week the company is proving just how willing they are to roll out changes to their service in an effort to build a lasting business.

This morning some MoviePass subscribers awoke to find an email from the company informing them that the price of the service was going up to USD $35 per month. To date MoviePass has charged subscribers based on where they lived and the average price of tickets at nearby theatres. Pricing levels ranged from USD $19 to USD $35. In the interest of full disclosure, I am a MoviePass subscriber living 30 miles from the center of Los Angeles (a.k.a. the suburbs) and currently pay USD $25.

However, that won’t be what I pay come April. I was one of those who received today’s email, thanking me for “continued loyalty and support”, reminding me that I was part of a select group “invited into MoviePass’s beta service” and then going on advise me of the following:

Since joining, you have been enjoying the service at a discounted rate which was set to expire at the end of your annual contract. On your next billing cycle, we will need to adjust your monthly rate to the retail price in your area of $35.

Initially I was taken aback by this 40% increase in the cost of MoviePass’ subscription price. That was until I did a quick survey of ticket prices at theatres within 10 miles of my home. The cost of tickets to a matinee, when I usually go to the cinema, ranges between USD $7 and USD $9. However, tickets for evening showings went as high as USD $15 and averaged roughly USD $13. That would mean a subscriber would have to see roughly five matinees or three evening screenings before breaking even on their monthly MoviePass subscription fee.

By noon today I had received more than half a dozen emails from our readers inquiring about the fee hike. Thus, I quickly composed an email to Stacy Spikes, founder and CEO of MoviePass with a few questions about the announcement. I was confident that he would respond fairly quickly, as is characteristic of Spikes who is a hands on manager if ever I’ve seen one.

According to Spikes the monthly rate is increasing only for those subscribers in the lower tiers for their geographic area. “We tested multiple price levels and some were in lower tier. The cost has always been $35,” he explained referring to the pricing model during their ongoing beta period. “We tested USD $19.99 and USD $24.99. We allowed members to stay at that level for a year. There has not been an overall price increase.”

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If At First They Don’t Succeed, MoviePass Tries, Tries Again

How MoviePass Works

Say what you want about MoviePass, the unlimited moviegoing subscription service, but one can not fault the startup for yielding to overwhelming market obstacles or folding at the first sign of serious industry pushback. Instead, when encountering hurdles to their business, the company, which operates in the United States, has been quick to pivot toward a model that worked better for themselves and their customers. MoviePass proved as much last fall upon announcing one of their most controversial modifications to date.

On October 31st of last year, MoviePass sent an email to subscribers with the subject “New Features”. One of its paragraphs read as follows:

We’re also excited to introduce a new feature: The Countdown Clock. This clock counts down the time until your next available screening. You will still be able to go to a movie each day, but there will be a 24-hour period between screenings. Your MoviePass app has already been updated, and you will notice these changes the next time you see a movie.

Maybe it’s best to rewind a bit here and provide a brief description and history of MoviePass. The company first tried to launch a beta version of its service in the summer of 2012, in which subscribes would be allowed to see an unlimited number of movies for a flat rate of USD $50 per month. There were several caveats though, including the fact that subscribers could only see one movie per day, each title could only be viewed once, 3D and Imax screenings would cost USD $3 extra and all tickets had to be purchased the day of the show via partners such as MovieTickets. Subscribers would receive a redemption code (mostly via a smartphone app) that could then be used at the theatre to obtain the actual ticket.

At the time, most found the cumbersome process to be complicated and confusing, and not at all convenient. It didn’t matter though since the exhibition industry was quick to squash the idea that they’d be working with MoviePass in anyway. This seemed to torpedo the whole concept, since MoviePass needed movie theatres to accept the redemption codes at each cinema.

However MoviePass had no intention of giving up. The company regrouped and by October that same year was back with a much more appealing model; the price had dropped to between USD $25 and $35 depending on where one lived, subscribers could still only see one movie per day, each title could only be viewed once, and no 3D and Imax screenings could be purchased. Subscribers were sent a MoviePass credit card which was to be activated using a mobile app while within 100 yards of a given movie theatre. Once activated, the card worked for 30 minutes at the designated cinema and could be used at the box office just like any other credit card.

By leveraging the existing credit card infrastructure, MoviePass removed the objections of cinema owners as an impediment to entering the market. A brilliant move that also enabled the company to shrug off any dissent from studios and web ticketing vendors like Fandango who had previously viewed the company as a threat.

At the time MoviePass CEO Stacy Spikes was a guest on Showbiz Sandbox, a weekly entertainment news podcast I co-host. We talked about the company’s past and what the future held. Spikes suggested that there would eventually be different subscription levels that would include 3D and Imax films, or reduced rate subscriptions that only allowed for moviegoing on weekdays. One of the goals, he said, was to help fill theatre auditoriums for the majority of showings which are not well attended.

Spikes was also candid about the overall MoviePass business plan:

“In all subscription models there is usage versus cost variable and they all work the same way. If everybody overuses you have a problem. We have certain people, like in a gym membership, who are going to go everyday. They are going to work out at the gym everyday and they are going to have these sculpted bodies that we all hate in the summertime. But, there’s also people who underuse and they don’t use it as much and then in the middle you have seasonality. So you may go a lot during Christmas and then dip. There are different types of users that are in the system so overall there is a behavioral economics to it that balances everything out and makes for a profitable business.”

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Third Time May Be The Ticket For MoviePass Unlimited Moviegoing Subscription

MoviePass Card

Over a year after MoviePass failed to launch its all-you-can-view subscription movie service, the company is back with a retooled offering that has a much better shot at surviving the inevitable pushback by cinema chains and studios.

You might recall last June MoviePass announced a private beta with 21 theatres in San Francisco that would allow subscribers paying USD $50 per month to watch an unlimited number of films in cinemas. In effect, the idea was to bring the Netflix business model to movie theatres. The companies plans were shelved however when theatre chains such as AMC and Landmark said they had no intention of working with MoviePass.

By July 2011 MoviePass had teamed up with Hollywood Movie Money to offer its members a similar service, provided they dealt with the inconvenience of printing vouchers at home which could then be redeemed at cinemas. Theatres would in turn be paid for each ticket, in-full, with MoviePass swallowing any price difference. At best, this was a cumbersome process which did not seam ideal for wide adoption.

MoviePass has since parted ways with Hollywood Movie Money, dumped its voucher scheme and earlier this week made public its latest unlimited viewing subscription model. This time, MoviePass may have come up with a system that cinema owners and studios won’t balk at and its customers will find more attractive.

Now, members pay between USD $19.99 and USD $34.99 per month and can watch up to one movie in theatres per day. The subscription price is determined on where a member lives. MoviePass has created three zones; those living in areas where ticket prices average less than USD $10 will pay USD $19.99 per month, whereas in high density markets such as New York or Los Angeles, where ticket prices average USD $14, members will pay at the USD $34.99 level.

Rather than having to print out a voucher beforehand, subscribers can use an iPhone app to log into any theatre throughout the United States, select a movie and showtime and then use a special MoviePass debit card to pay for a ticket. The process has two main caveats in that subscribers must be within 100 yards of the theatre when logging in (which activates the debit card) and the theatre must accept credit cards. Cinemas will get paid the going rate for

The new MoviePass service does come with a few restrictions. For instance, 3D and Imax films are not included as part of the monthly plan. As well, one can’t just subscribe to peak moviegoing months such as summer or the year-end holiday season.

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