Could This Be the Beginning of the End for MoviePass?

Sometimes, a deal sounds too good to be true. That’s how many consumers reacted when MoviePass announced that for just ten bucks a month, you could see one movie a day in the theater. The company reimburses the theater for a full-price ticket every time one of their cardholders sees a movie, and many people wondered how such a business could be profitable.

Well, it turns out that it might not be.

Massive Losses and Mistrust

Despite promises that MoviePass would start turning a profit by 2019, the company has been consistently losing money. In fact, they recently reported a loss of over $150 million—a number that has analysts and investors questioning how much longer the startup can continue.

The company, which seeks to disrupt the movie theater industry much the same way that Netflix changed the way we consume television, has suggested that they will earn revenue from partnerships with major theater chains and movie distributors.

However, there has been concern that despite their assurances, MoviePass is also selling information about its subscribers. In March of 2018, CEO Mitch Lowe made an offhand remark about tracking users on their way to and from the theater using GPS data. He later clarified that the app doesn’t actively track your phone, but that it can suggest restaurants located near the theater where you checked in for your movie.

A Turbulent History and Uncertain Future

When it originally hit the market in 2011, MoviePass charged nearly $50 for a monthly subscription. They tinkered with the pricing model several times, but it seemed that when they dropped the fee to $9.99, they’d finally found the winning number. The company reported an influx of over 2 million subscribers after debuting the cheaper monthly price in 2017.

Now, however, it seems as though MoviePass may be considering another dramatic change. While current cardholders are still able to see a movie a day, the only subscription currently offered to new subscribers caps the number tickets at 4 per month. New subscribers also receive a 3-month trial subscription to iHeartRadio’s streaming radio service, but that hardly makes up for the limits imposed by the new model. There’s no word yet whether MoviePass will eventually cap all subscribers.