Yesterday, MoviePass CEO Mitch Lowe reportedly called an all-hands in which he informed employees of plans to further limit access to blockbuster films. The policy, which started with Mission: Impossible — Fallout this weekend, was set to extend to upcoming big releases, Christopher Robin and The Meg. The report arrived as the service was experiencing yet another outage.
Today, the company confirmed plans to continue its policy of limiting ticket availability to top films, acknowledging the tremendous cash burn the company has experienced since launching its subscription service nearly a year ago.
MoviePass doesn’t mention specific upcoming films by name, but notes that first run films opening on more than 1,000 screens will be limited in their first two weeks, unless a studio opts to work with MoviePass for promotional purposes.
“In an effort to maintain the integrity of the MoviePass mission, to enhance discovery, and to drive attendance to smaller films and bolster the independent film community, MoviePass will begin to limit ticket availability to Blockbuster films,” the company writes. “This is a strategic move by the company to both limit cash burn and stay loyal to its mission to empower the smaller artistic film communities. Major studios will continue to be able to partner with MoviePass to promote their first run films, seeding them with a valuable moviegoing audience.”
In addition to those limitations, the startup will be increasing the cost of its monthly pass from $9.95 to $14.95 a month. That rate jump will be rolling out some time in the next 30 days, according to the company.
“These changes are meant to protect the longevity of our company and prevent abuse of the service. While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry,” said Lowe, in a release tied to the news. “Our community has shown an immense amount of enthusiasm over the past year, and we trust that they will continue to share our vision to reinvigorate the movie industry.”
It’s clear that the company has painted itself into a corner here. It’s a lot easier to add features than it is to take them away, and all of those who signed up for the service with the expectation of unfettered movie access for a low monthly fee are starting to feel the sting of reality. It’s been a death by a million cuts as the company has fiddled with its pricing structure and moved the goal posts of movie access, while experiencing the occasional outage in order to address on-going money concerns.
The company did use the opportunity to promote some positive impact of the service, which, at very least, has reignited interest among a movie going audience that has been waning for years. The service sports three million members and reportedly accounted for around six-percent of U.S. box office receipts for the first half of the year. Ultimately, however, that doesn’t account for a whole hell of a lot if you’re bleeding money.
“By not providing unlimited tickets, but providing two tickets for $9.99 with more flexible options and features, we might not have grown as fast as MoviePass, but we’ve grown more sustainably,” CEO Rifat Oguz told TechCrunch this week. “In fact, we’ve managed to grow more than 50% each month for the last 13 months. Our reasonable pricing structure allows both our users and us to benefit together, making Sinemia a more sustainable model that has staying power.”
AMC, meanwhile, has launched its own competing service, bolstered by relationships with studios and the massive infrastructure that comes with being the world’s largest theater chain.
Among MoviePass’ strategies going forward are a Netflix-style investment in original content. “Integration of MoviePass Ventures and MoviePass Films with our own original content allows us to gain revenue by owning the films through box office, streaming, DVD, retail, transactional sales e.g. Apple and Samsung, and international rights, etc.,” the company writes.
MoviePass Ventures’ second film, Gotti, was a major critical and commercial flop, scoring a rare zero percent critical rating on Rotten Tomatoes.