264 million American’s see at least one movie in theaters a year.
43 million American’s see a movie once a month in theaters.
11.3 billion dollars was the total US box office in 2019.

43 billion dollars globally.

Did some research on the founder and current CEO of MoviePass, who brought back the company post bankruptcy and looked at the economics of the company and if it can be viable.

Quick history

MoviePass was founded in 2011, where it spent years testing different models with consumers and was sold in 2017 to a private equity firm called Helios & Matheson, where they had 20,000 users at the time.

To grow the company, they lowered prices to unlimited movies for $10 a month, with one free movie a day in theaters and they’d cover the cost.

The original plan was to only do that as a promotion, offer it to just 100,000 people and $20 would be the price after.

They thought they’d get 100,000 signups in 30 days, but got it in under 48 hours.

The company kept the model, firing the CEO I spoke to today for not wanting to continue it and reached over 3 million subscribers.

Problem though was the company had an unstable model, where the US national average cost of a movie ticket is $9.57, but it gets higher in many states and for chains such as AMC, going as high as $15.

Meaning a subscriber using it just once a month means the company loses money.

To show why those numbers never made sense, 11 million American’s make up 47% of all movie tickets sold, being the small percent of moviegoers who go weekly, if not more.
That’d mean those 11 million people in 2019 spent over 5 billion dollars on movie tickets.

For MoviePass, it becomes unsustainable, where at $10 a month, that’d only be about 1.3 billion a year, creating a multi billion dollar loss.

MoviePass didn’t work, but in bankruptcy, the founder Stacy Spikes bought it back and relaunched it, getting 700,000+ subscribers in under one week, tons of press and partnered with 25% of indie theaters.

Can he make it work now?

He changed a lot about the previous model, but still offered a $10 price point.

Plan is to offer plans going from $10-30, which offer credits and people can see a certain amount of movies based on that.

For most moviegoers, that’s price beneficial for well over half the year.

The big problem though is it still has the core issue though of wanting to beat the subscription.

Anyone paying $30 a month, would likely fit into the 11 million super movie fans or they’d become those types of fans. The losses might not be as bad as $10, but they’ll still be losses.

I’d normally say the business is destined to fail, but one statistic which I think gives MoviePass 2.0 a chance..

Will You Be My Neighbor

The Tim Allen movie, which was a biopic about Mr Rogers that came out in 2018 and lost money, having a 25 million dollar budget and making 22.8 million at box office.

MoviePass made up 50% of all tickets sold for it in NYC.

There are also several films which were all Oscar nominated that MoviePass made up 20-40% of sales for.

MoviePass also at peak, despite only having 3 million subscribers was 5-7% of all tickets sold and people to attend movies.

This gives it a chance.

The play to me feels like if MoviePass can restart properly and get to a point it’s over 20% of tickets sold, it’d have such a power in the industry it can be leveraged to studios and theaters.

For years, I thought the future of theaters would be they don’t sell tickets anymore, but people get tickets via subscriptions to Netflix, HBO Max, Disney+ and so on, where theaters exist to make money as a piece of that subscription, an upsell or just off snacks/merchandise sales.

MoviePass might be the thing to accelerate that, where if they become 1 in 5 tickets sold in the US, they can get powerful enough to make deals with studios/theaters that’ll promise them profitability. Even as a form of advertising, where on the app, they could be paid by studios to push sales.

There’s a long shot to this, but I think Stacy is going to either end up having MoviePass go bankrupt again or he’s the most pownerful man in Hollywood.

Let’s see!