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After A Tumultuous Week, MoviePass Is Increasing Prices
Following some pretty major PR nightmares, it's clear that MoviePass needs to do something drastic in order to stay afloat. What it's doing, however, likely won't make a lot of people happy. Following a massive service outage that left many unable to use their subscription for a day or more, MoviePass has now announced that, in addition to blocking access to major releases for a period of two weeks, Moviepass has also increased its subscription price from $9.95 to $14.95 a month.
While $14.95 is still a long way from the $30 a month price the service initially launched with, it does raise the price to the point where, at least in many markets, a single movie viewing a month won't pay for the subscription by itself. There were a lot of questions when the price was originally lowered about how such a price point was sustainable, and it seems clear by this change that it simply was not. Whether MoviePass thought it could leverage its user base to get ticket discounts from theaters or the company simply believed many people would sign up and then not use the service, it became clear last week that the current model when MoviePass apparently literally ran out of money and had to borrow $5 million just to keep things moving.
Over the weekend, movie fans were angry to discover that they could not purchase a ticket to Mission: Impossible - Fallout and it turns out that's going to remain the case for all other major releases as movies that open on over 1,000 screens will be blacked out for two weeks on the service going forward.
The only place where the price increase was met positively was on Wall Street where CNN reports MoviePass' stock doubled following the announcement. However, it then began to drop again and gave up everything it had gained.
A price increase will clearly cause some subscribers, who haven't already left MoviePass, to cancel their subscription. In the end, that may be a good thing, as people leaving the service who have cost MoviePass money over the last year means the cost of supporting everybody else becomes cheaper. Perhaps that, combined with the price increase, really will keep MoviePass going. Of course, in addition to those who cancel because they can't see the latest new release, will come the cancelations from those who simply don't use the service as much and don't want to spend the extra $5, which are the people MoviePass probably wants to keep.
Clearly, things are changing yet again in the movie ticket subscription business. Some companies are already trying to cash in on the MoviePass situation and we'll have to wait and see what happens next.
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