I have written a few times about MoviePass and each time I do, I seem to be bringing you information on how the plan itself just keeps getting cheaper and cheaper.  MoviePass is now offering its customers a plan for $89.95/year if you pay up front.  There is a $6.55 processing fee, but that works out to be $6.95 a month.  That’s per month folks.  If you want to compare – that’s cheaper than a Netflix subscription.   One argument why people stopped going to the movies was because of how expensive it was.  Some would also argue that you could get an entire month of Netflix for a fraction of the cost of a movie ticket.  But that’s no longer an argument that can be made.

In August, the company moved from a tiered pricing plan that ranged from $15 up to $50 per month, to a flat rate of just $9.95 a month.  This was an incredible price reduction, so I’m not sure how they’re now able to offer $3 off of that price.  Is MoviePass trying to get more sales?  They are only offering this for a limited time, and will only last for one year – pending you pay up front.  The second year, however, goes back up to $9.95 a month.  Which is still an incredible deal, so not only am I not sure how you can pass this up.  But I’m also not sure how this model is sustainable.

Mitch Lowe, CEO of MoviePass had this to say about the change, “We are entering the prime movie going season, so now is the perfect time to take advantage of the MoviePass movement.”  Over the summer, MoviePass had a huge boost in subscribers.  That’s mostly due to the price drop that I just mentioned.  Last December, MoviePass only had about 20,000 subscribers.  In October, those numbers increased to over 600,000 subscribers.  600,000!  That’s a huge increase in less than a year.  Which makes this business model seem incredible.  But like I suggested before, perhaps this isn’t a sustainable model?

Just because I think they have a great business plan, doesn’t mean everyone agrees with me.  In August, AMC Theaters threatened MoviePass with a lawsuit and claimed that the company’s business model wasn’t sustainable.  What’s interesting is that MoviePass pays the theaters the full price for the ticket – with the exception of a few where they get a discount.  The average cost of a movie ticket in North America costs $8.84.  Which means, MoviePass will lose money after subscribers attend only one movie per month.  Which is why it’s unclear how MoviePass is actually going to make money.

According to Lowe, MoviePass subscribers spend more money on snacks than the average movie-goer.  And it’s those costs that will help make up the ticket price.  So perhaps there is something going on between MoviePass and the theaters.  Otherwise, how else is MoviePass benefiting from this arrangement?  While it’s not clear how they’re making money, maybe we shouldn’t care?  Maybe we should just take this at face value for now and enjoy the benefit while we can.  There’s a good chance that this won’t last, but that doesn’t mean you can’t enjoy it while it does.