The Pricing Catastrophe of MoviePass: An In-Depth Analysis

Did you know that MoviePass skyrocketed from 20,000 subscribers in 2016 to 3 million by 2018? Despite this meteoric rise, the company ultimately collapsed in 2019, leaving many to wonder what went wrong.

A Revolutionary Model with Fatal Flaws

When MoviePass launched, it tapped into the collective desire among movie lovers for more accessible theater experiences. Its promise? Unlimited movies for a mere $9.99 per month. Subscribers received a debit card to buy tickets directly from theaters after selecting a film and showtime through the MoviePass mobile app. However, the allure of unlimited access proved too good to be true for a sustainable business model.
MoviePass assumed that only a minority of subscribers would binge excessively. Research indicated that 11% of Americans were frequent moviegoers, averaging 18 trips to theaters per year, while 89% fell into the casual category, attending about five times. The company projected that frequent visitors would double their outings to 36 films annually and casual moviegoers would double to ten visits. Instead, usage surged beyond projections, creating untenable costs.

Miscalculations in Consumer Behavior

MoviePass misjudged consumer behavior, likening their model to all-you-can-eat buffets, where initial indulgence tapers off over time. They believed novelty would wear off, and subscribers would eventually return to pre-MoviePass patterns. Unfortunately, many users did the opposite.
Frequent moviegoers ramped up consumption to the full 36 films or more, and casual viewers often hit ten showings—sometimes more if they discovered a beloved franchise. In extreme cases, retirees with flexible schedules visited theaters 15 times per month. These patterns drove the average cost per subscriber to approximately $112 per year, while revenue per subscriber remained around $120. Even on paper, that left only an $8 gross profit—before marketing, customer support, and administrative costs were factored in.

“Some subscribers even challenged themselves to watch one movie each day of the year,” MoviePass executives recalled. [verify]

Missed Revenue Opportunities and Data Monetization

MoviePass had ambitious plans to offset its thin margins through ancillary revenue streams. First, they counted on leveraging subscriber data to sell insights on concession purchases and movie preferences to theaters, studios, and third parties. Second, they anticipated negotiating bulk ticket discounts once they amassed a critical mass of subscribers. Third, they planned premium add-ons and tiered subscription tiers to upsell heavy users.
None of these strategies materialized in time. Theater chains were reluctant to discount tickets for a service that undercut their direct sales, and studios hesitated to share sensitive performance data. Concession partners and retailers showed limited interest without clear proof of audience segmentation benefits. As losses mounted, MoviePass ran out of runway before tapping these revenue streams.

Struggles to Adapt

In an attempt to curb costs, MoviePass implemented several controversial measures, each sparking customer frustration:

• Restricting access to high-demand or first-run films.
• Introducing surge pricing fees—an extra $2–$6 for blockbuster showtimes.
• Requiring photo verification of ticket stubs after viewing.

These policy shifts protected margins but eroded goodwill. Subscribers encountered unexpected charges and a fragmented experience, undermining the simplicity that had driven initial growth. Technical glitches and inconsistent rule changes further inflamed customer dissatisfaction.

The Competition and Financial Collapse

As internal challenges deepened, MoviePass faced mounting external threats. Major theater chains, led by AMC, launched their own subscription services offering predictable pricing and curated perks. Alternatives such as Sinemia and Alamo’s subscription plan provided consumers with options that avoided MoviePass’s erratic restrictions.
Financially, MoviePass lost a staggering $256 million in 2018 alone. By September 2019—just months after touting record subscriber figures—the company officially shut its doors. Its rapid disintegration became a cautionary tale about the perils of aggressive pricing without robust contingency planning.

A New Chapter for MoviePass

After shutting down, MoviePass was relaunched in late 2022 by its original founder, this time with a more conservative pricing approach. Initial plans include tiered plans and limited monthly allotments rather than true “unlimited” access. While the company claims profitability under this revised model, detailed financial disclosures remain absent, inviting industry skepticism. [verify]

Conclusion

MoviePass’s rise and fall underscore the critical importance of aligning subscription pricing and business strategies with realistic consumer behavior and cost structures. Overly aggressive “unlimited” offers may drive rapid user growth, but without clear strategies for monetizing data, negotiating costs, or tiering services, sustainability will remain out of reach.

• Bold Tip: Build a tiered pricing model with usage limits and premium add-ons to balance customer value with financial viability.

What alternative pricing strategies or partnership models could have rescued MoviePass before it reached its breaking point?