DAVID GREENE, HOST:
MoviePass started out promising a deal that just sounded too good to be true. Subscribers paid $9.95 a month for a pass. This pass let them see one movie in theaters a day every single day. But film lovers used their movie passes so much the company couldn't keep up. It lost millions. Its stock price fell below 10 cents a share. So MoviePass came out with a new policy yesterday that's aimed at reversing its fortunes. Brian Barrett covers technology and culture for WIRED magazine. He's with us to explain this wild ride he's been following.
Hi, Brian.
BRIAN BARRETT: Hi. Thanks so much for having me.
GREENE: Well, thanks for coming on. So for those who don't use MoviePass, can you just give me a thumbnail of what it is and how it works or I guess how it was supposed to work?
BARRETT: Sure. I mean, I think the description you gave is pretty apt, I think. You know, MoviePass sends you a debit card in the mail that is MoviePass branded. You go to the theater. And you can select one movie to go to. You can't see an IMAX movie or a 3D movie but any 2D movie you want once a day for 30 days. I think since then they've added a few restrictions on it, though. So that's sort of where things have gotten a little bit hairy for customers sometimes. You're never quite sure what you're going to get at this point.
GREENE: Did the company not see this coming? Did they not think that offering such a good deal - I mean, people were actually going to do it and they would lose money? Like, when did they realize that they were in trouble here?
BARRETT: Well, you know, I think the company always knew that they would lose money on every sale, which I know sounds silly. But they were anticipating that ultimately they would forge enough partnerships and deals with movie studios and theater chains that they would have so many customers that these other third parties would have no choice but to, you know, be an alternate revenue stream basically - share concession sales, pay for promotional considerations.
GREENE: Oh, I see. They'd be like the new must-have to see movies. I mean, they'd be that big.
BARRETT: Exactly. Yeah. So basically unless you're working with MoviePass, no one's going to go see your show or at your theater, which sort of makes sense. I think what MoviePass didn't anticipate was that so many people went to see so many movies. I mean, they're anticipating a lot bigger drop off from people.
GREENE: OK. So what is this new policy they have? How is it going to work? And does it - do they have any chance of righting the ship here?
BARRETT: Well, you know, so there's actually two policies within the last week or so. Last week, they had said, you know, we're going to raise our prices to $15 and not show first-run movies. This week, they're saying, OK, wait, we'll keep the $10, but we're going to limit you to three movies per month. And that actually does seem pretty sustainable.
GREENE: Three per month instead of once a day.
BARRETT: That's right.
GREENE: That doesn't sound like as good a deal.
BARRETT: MoviePass says that though 85 percent of the customers already see three or fewer movies per month. So what they're really trying to do is stem that bleeding from the others who go to 10, 15 movies per month that really eat into their profits. It's a sustainable business model. The question right now is, you know, is it too late? Because there are already competitors. AMC has its own version of this for $20 a month. You can see three movies a week. A company called Sinemia has a plan where for $5 a month you can watch one movie or up to $20 a month a certain number. So, you know, this might be a better model. But it's also at the same time more competition. And people are a little bit wary about MoviePass at this point, I think, rightly.
GREENE: I think I'd be a little wary if I paid $9.95 a month thinking I can see any movies once a day and now they're saying it's only three a month. And you said not first-run movies. I can't even see new movies with this thing.
BARRETT: So at this point - so at first they were saying no first run. Now you can, but it's still unclear which ones you can and which you can't. You know, I think the biggest thing is people don't really trust MoviePass at this point. It's still a great deal, though. So if you're willing to sort of go along for the ride for as long as it lasts, you could do worse.
GREENE: All right. Brian Barrett works for WIRED magazine. He's been covering the saga of MoviePass. We'll have to see if they're able to right their ship up.
Brian, thanks.
BARRETT: Thanks so much.
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