With Apple widely expected to unveil a new media service on Monday, it would do well to make sure it does not fall into the same traps that ensnared MoviePass.
With Apple widely expected to unveil a new media service on Monday, it would do well to make sure it does not fall into the same traps that ensnared MoviePass.
MoviePass had the novel idea of selling movie theater tickets through subscriptions, guaranteeing payment with a virtual Mastercard debit card, and it almost worked. About three million consumers had signed up for MoviePass by the middle of last year, after the company’s 2017 price-drop for accessing unlimited movie tickets to $9.95 per month. But the concept proved to be unsustainable.
The biggest issue was that MoviePass didn’t have the cooperation of the movie theaters that had to accept its card through Mastercard’s honor-all-cards rule. And Apple is tiptoeing very close to that line as its announcement nears.
Apple’s new service is expected to be a competitor to the likes of Netflix and Amazon Prime Video, and even traditional cable networks. Like MoviePass, it might also launch its own payment card with Goldman Sachs. But as Monday drew closer, it became clear that several key partners were not yet on board.
In particular, Apple was still “racing to secure movies and TV shows” as of mid-March, according to Bloomberg. Big content companies like HBO, Showtime and Starz had not yet signed on board, despite Apple’s best efforts. And since these companies have their own streaming services to sell, if Apple can’t get them to be partners, they will see it as a competitor.
The history of MoviePassMoviePass sells movie seats as a subscription, but pays theaters the full price of tickets. Its debit Mastercard is tied to geo-fencing technology within its app to ensure users are inside the theater at the time of the show. Parent company Helios and Matheson Analytics hoped to balance costs by aggregating high- and low-cost theater tickets. It also faced legal threats from AMC.
Losses mounted quickly and by August of 2018, MoviePass began restricting users’ access to movies and tinkering with several different pricing and movie-access plans. An exodus of subscribers and its own executives followed.
MoviePass has been aggressively reworking its model, and this month launched another in a stream of revised pricing plans, offering unlimited movies for $10 a month—with restrictions—and requiring users to pay for 12 months in advance.
