MoviePass has just announced it has reached 1 million paid users for the first time, a number that Netflix took 39 months to attain. In the last few months, MoviePass made the decision to slash their prices across the board. The company lowered their subscription price from $15 to $50 per month to $9.95 and $8 per month. Just last month, the company also offered a yearly subscription which came to $7 per month. The move enabled an overall increase in subscriptions and created different reactions from theatre chains throughout United States.
“We are excited and proud to have reached the one millionth subscriber level in such a short time while still early in the consumer adoption curve,” said Mitch Lowe, MoviePass CEO. “Our focus on creating the best movie theater subscription service experience for our subscribers has propelled our growth to date. We believe that growth will continue as we further develop our application, improve customer service, enhance exhibitor relations and fill movie theater seats for incredible films to be released in the future.”
In response to a question about how would the company survive by shelling out for the movie Star Wars: The Last Jedi at $220M, Lowe said, “We’re funded properly to pay for that.”
The discounted rates offered by MoviePass have already invited a lot of speculation from theatre chains who are suspicious about the company’s business model. As MoviePass has subsidized the rates of each ticket, its users buy at a maximum cost of one ticket per user per day, which would surely make the company lose money. However, CEO Mitch Lowe seems to have faith in this scheme. He said that the company plans to compensate the cost of city users by increasing its subscriber base in more rural areas.
However, this has been a cause of worry for theatre chains, as they think users will get comfortable paying so little. AMC even threatened MoviePass with a lawsuit saying they might opt out of participation, as MoviePass works at many AMC theatres, while other theatre chains have decided to take an alternate approach to match by trying to offer their own version of MoviePass.