April 13, 2018
Movie ticket subscription service April 13 announced a new promotion affording new subscribers three-months access to music streaming service iHeartRadio.
Notable to the $29.95 promotion is the fact subscribers are limited to four movies per month over the 90-day period. This differs significantly from the traditional $9.95 MoviePass service enabling subscribers access to one theatrical screening per day.
“Our goal has always been to deliver the best value to our MoviePass family and by partnering with iHeartRadio, we are able to provide access to two premium subscription services at one low price,” MoviePass CEO Mitch Lowe said in a statement.
While executives at both companies lauded the promotion, with Ted Farnsworth, CEO of MoviePass corporate parent Helios and Matheson Analytics, declaring the future of entertainment subscription-based, the fact the promotion reduces the number of theatrical screenings underscores a fundamental flaw in the business model, according to Wedbush Securities analyst Michael Pachter.
“It’s clear that they are losing a lot,” Pachter said in an email.
The analyst isn’t sure limiting subs to four movies per month will make a material difference (i.e. up margins) on MoviePass’ loss-leader service.
“They must have some abusive subscribers who joined and saw a movie every day, then quit,” Pachter said.