Yeah, it's crazy idea you can watch a movie every day for 9.95$ a month. This idea was from the co-founder of Netflix and CEO of Redbox Mitch Lowe. Mitch took over CEO role of Movie Pass just last summer. They did a bunch of market test before rolling out the price point at $9.95 a month this August.
I couldn't resist signing up for the service right away when they announced the new price in August, lol. Because for 20$ a month, wife and I can go to movies any day, or even try new movies we otherwise wouldn't have watched. 240$ a year covers all of our movie ticket expense just too good to pass up.
The public and wall street of course are skeptical whether or not a business model like this could sustain. Obviously, if you watch more than one movie a month MP would lose money because MP is only charging you for $9.95 a month. Average ticket price is about 9$. Using the card 2x a month puts MP cost at 18$ or more.
MP explanation is that market test have shown only a small percentage of its members are using the card more than 2x a month. Majority does not use it that often which offsets those who do take advantage of it. Looking at a longer period of time average members may only go to movies several times a year. MP would be profitable if that average remains below 12 x a year.
MP also explained that they likely cut deals with Theaters and film makers when their members grow into millions. It becomes effective for film makers to advertise through MP app, plus MP can collect market data and allow the film makers to tell how many people actually watched the movie after seeing the trailer or what type of movie people usually watch. As they say, market data is the new oil.
Come to think of it, a night out to the theater involves more than watching the movie, you likely need food and MP can help drive business to local restaurants too. It's going to be pretty disruptive if it succeed that is.
So in the next 5 years, maybe everybody will be carrying a Movie Pass which is a debit card issued by Master Card. You can pretty much use that where ever Master Card is accepted. That's brilliant, cus you can't refuse or discriminate between Master Cards.