Ten bucks a month for unlimited movie theater access sounds too good to be true. And MoviePass right now is probably wishing it wasn't.
The company decided in August to cut its prices from $50 a month to just $9.95 a month. It gives subscribers access to one movie a day in American cinemas, no ticket purchase needed, and you can go as many days as you want.
But MoviePass was in no way prepared for the surge in demand the price cut would bring.
CEO Mitch Lowe told Forbes they were expecting to grow their customer base by 150,000 in 15 months – they achieved that in just two days.
This led to lengthy delays in sending out the debit cards subscribers need to go to the movies, with some still awaiting their card two months after the price cut – all the while, they've been paying the subscription fee.
But there could be more trouble on the horizon, with Consumerist this week reporting that the current business model – to buy tickets at full price from theaters while charging users $9.95 a month – is seeing the company lose money "faster than anticipated."
It needed an extra cash injection from its primary backers, Helios and Matheson Analytics, to stay afloat.
In the future, MoviePass hopes to sell ads and customers' data to movie studios, and reach deals with theaters to cut ticket prices to make its business model more sustainable. But Consumerist notes that some theater chains have been less than impressed by its price cut and aren't on board.
Helios and Matheson warned this month that if the company can't find other sources of revenue, it'll have to raise prices.