As a film buff, David Johnson thinks the subscription service MoviePass, which allowed nearly unlimited movie tickets for a flat monthly or yearly fee, is great.
“It encourages people to try movies that they might not otherwise try,” said Johnson, of Provo, who usually goes to one or two movies a week.
As an accountant, though, Johnson said he was “fascinated by the business model. I did think from the very beginning, ‘How is this sustainable?’”
A lot of MoviePass subscribers in Utah and nationwide have asked that question this week, as the service has taken drastic actions — including a $5 million emergency loan last week to pay for movie tickets its customers wanted to buy — to keep from going under.
On Tuesday, MoviePass announced it was raising its monthly rate to $14.95, about 50 percent above the $9.95-a-month fee that attracted some 3 million users nationwide since last fall. The new fee should go into effect in the next 30 days.
“The rate hike I’m fine with — I’d be willing to pay $30 a month,” said Jason Williams, a software sales rep who lives in West Jordan.
Williams said he probably sees six to 10 movies a month, and with movie tickets in the Salt Lake Valley usually going for $9.50 or $9.75 on a Friday night, the $14.95 monthly fee is still a bargain.
Rebecca Frost, a freelance critic and producer for the Big Shiny Robot podcast, said MoviePass is invaluable for film critics who aren’t affiliated with a major media outlet. Such freelance critics can’t always get into free advance screenings, so MoviePass lowers the expense of buying tickets.
“It’s allowed me to work on my critical skills,” Frost said.
In recent months, MoviePass has put in limitations to the ticket-a-day deal. The service has instituted surge pricing for the most popular showtimes and titles. It stopped allowing subscribers to see the same movie more than once using the service. And it required users to text photos of their ticket stubs — to prove they didn’t use their MoviePass cards to buy tickets for a different movie than what they said they were going to see.
MoviePass CEO Mitch Lowe, in a statement Tuesday, said those restrictions “are meant to protect the longevity of our company and prevent abuse of the service.”
Johnson said the restrictions “made the experience less enjoyable. What if I screw up something accidentally?… What if I forget to take a picture of my ticket?”
A new restriction announced Tuesday will keep users from seeing a new movie in the first two weeks of its release — though that may change with distributors and theaters that have worked out deals with MoviePass. The service blocked purchases of tickets last weekend for the new “Mission: Impossible — Fallout.”
MoviePass’ shaky financial status has been felt by its parent company, the data firm Helios and Matheson Analytics. The company’s stock, which was fetching $11.46 a share on Thursday, closed Wednesday at 23 cents a share — the same day it paid back that $5 million loan.
MoviePass, in some ways, has been a victim of its own success. In an interview with The Salt Lake Tribune last fall, Lowe said he expected heavy-use consumers to be rare. “People think in an all-you-can-eat program, people will go a lot,” Lowe said then. “Even though there are some who will go a lot, the average is much, much lower than you would expect.”
Since MoviePass’ surge in popularity last fall, theater chains have offered their own variations on the subscription service. Two chains with theaters in Utah have subscription deals — AMC’s Stubs A-List and Cinemark’s Movie Club — which don’t offer as many tickets a month as MoviePass, but compensate with discounts on concessions and other perks.
Johnson said he hedged his bets on MoviePass by buying a subscription to Cinemark’s Movie Club, which helps reduce costs when he goes to the movies with his wife and five kids.
“You more than get your money back,” Johnson said. “When we try to go to a movie as a family, it can get so pricey.”
If MoviePass shuts down, Frost said she likely would still see as many movies, but cut back in other parts of the theater experience. “Every time I use my MoviePass, I paid what what I would have paid in tickets in concessions,” she said.
Without MoviePass, Williams said he would see a change in his schedule.
“I’ll probably just be going Tuesday nights, when they do the $5 discount nights,” Williams said. “It’s kind of a bummer. I’ll be seeing less movies, but I’ll be paying the same amount.”
The Associated Press contributed to this report.
