MoviePass drops pricing to underneath $7 monthly, should you opt for the annual plan

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MoviePass, the subscription service that lets consumers pay a monthly fee to see unlimited movies in theaters across the U.S., is slashing its prices yet again. The company announced today it’s now offering its service for $6.95 per month, down from the current price of $9.95 per month, when customers commit to a one-year subscription plan. That works out to a flat fee of $89.95 annually.

The deal is a limited-time promotion, as opposed to a permanent pricing change, but MoviePass didn’t say how long the offer is valid. However, it is open to both new and existing subscribers – the latter who would receive a 25 percent savings on their current subscription if switching over to the annual plan.

About MoviePass
MoviePass is an American subscription-based movie ticketing service. Founded in 2011 and headquartered in New York City, the service allows subscribers to purchase a single movie ticket per day for a flat subscription fee per month. The service utilizes a mobile app, where users check-into a cinema and choose a film and showtime, which results in the cost of the ticket being loaded to a prepaid debit card, which is used to purchase the ticket from the cinema as usual.
The service went through several pricing structures following its original invite-only launch (including those limited to 2 or 3 films per month, and “unlimited” plans, with pricing based on market size), before announcing in August 2017 that it would switch to offering a plan with a single film per day priced at $9.95 per month. The change in business model came with the acquisition of a majority stake in the company by an analytics firm, who sought to widen the service’s reach so it could collect more information on customer viewing habits.
Since its launch, MoviePass has faced objections from major cinema chains, particularly AMC Theatres, over its business model and sustainability.

MoviePass drops pricing to under $7 per month, if you opt for the annual plan

About pricing
Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business’s marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the market place, competition, market condition, brand, and quality of product.
Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. (The other three aspects are product, promotion, and place.) Price is the only revenue generating element amongst the four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to decreasing price elasticity and so enable price increases to drive greater revenue and profits.
Pricing can be a manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus, pricing is the most important concept in the field of marketing, it is used as a tactical decision in response to comparing market situations.

This is not the first time that MoviePass has dropped its pricing.

When the company introduced its $9.95 per month, one-movie-per-day plan this August, down from $15 for 2 movies per month (or more in select markets like L.A. and NYC, and going as high as $50), it saw so many new sign-ups it had trouble meeting demand. Within a couple of days, 150,000 new users joined, and by September, the company said that its number of subscriptions had grown to 400,000.

MoviePass drops pricing to under $7 per month, if you opt for the annual plan

As of October, MoviePass had grown to over 600,000 subscribers.

It also said its subscriber churn had dropped from 4.2 percent in the first month, to 2.4 percent in month two.

The service is today majority owned by data firm Helios and Matheson Analytics Inc. (HMNY), after selling a $27 million stake in August. The firm then increased the purchase price in October to $28.5 million, raising its stake to 53.71 percent from 53 percent. In November, HMNY announced plans to raise $100 million to increase its investment even further.

This influx of capital has allowed MoviePass to continue to subsidize the cost of this subscription to the benefit of pass holders, though obviously not profitability at this point. It’s operating in the red while it focuses on growing subscribers.

MoviePass hopes to eventually convince theater owners it’s growing their customer base, so it can be cut in on profits, according to CEO Mitch Lowe, in a report from Variety in August. It also believes it may be able to sell the data collected on its subscribers in the future.

In the meantime, MoviePass is a ridiculously cheap deal for movie-goers. It now works at 91 percent of theaters across the U.S., though not all are happy with the service.

AMC specifically threatened the startup with legal action in August, and announced that MoviePass was “not welcome here.” It said it would try to find a way to opt out, as it believes lowering the cost of ticket prices would devalue the theater-going experience overall.

Others, like Regal and Cinemark, are taking a wait-and-see approach, Lowe earlier said. 

“HMNY continues to be the biggest supporter of MoviePass, as it outpaces any other movie theater subscription service and continues to disrupt the movie theater industry,” said Ted Farnsworth, Chairman and CEO of HMNY, in a statement about today’s new, lower pricing. “We look forward to helping MoviePass continue to broaden its reach and modernize the movie theater industry,” he added.

The annual subscription is available now through MoviePass.com