Moviepass, how does it make money?
Correspondent Robert Salladay investigates.
These are your typical Moviepass cards.
March 29, 2018
Some things are too good to be true, but is Moviepass one of them? Moviepass is a nationwide monthly subscription that allows you to watch one movie a day for the low price of $9.95 a month. Deals that lower the price down to $6.95 a month make an affordable option for movie lovers. However, there has been some recent news about Moviepass that its customers might find disturbing.
Moviepass has over 2 million subscribers according to The Washington Post, and that number keeps growing. In the past month, Moviepass has gained over a half a million subscribers. With this trajectory, they should have at least 10 million subscribers by 2019.
How does the company make money with this kind of business strategy? Well, there are several ways, but one word that summarizes their methods is influence. Moviepass is creating a market that they will solely control. And if any theatre were to disagree with them they could cut them out of their program and take most of their revenue. AMC, for example, had several of their largest theatres cut out of the Moviepass program because AMC called them an “unsustainable business.” As a consequence, those AMC theatres are losing more revenue than any other point in the past five years.
Currently, Moviepass does not have enough of a customer base to create influence among theatres, and because of this they lose hundreds of thousands of dollars each month. But they have influence over something smaller but with just as much profits. That being their customers. Moviepass is able to sell the personal information of their customers that they collect, such as what type of movies does this person like, what theatres are they going to and why.
Most of Moviepasses subscribers know that small information such as this is being sold to so called “data brokers,” but what they didn’t know is that it may go further than just your movie history.
Once you download the Moviepass app it asks to “allow location services.” If you decline, the app does not work. But if you accept, Moviepass has the ability to track you 24/7. It was recently announced by ‘TechCrunch’ that the Moviepass “CEO proudly… tracks your location before and after the movie,”gathering information such as where they were eating before the movie and what they were doing after.
Many Moviepasses customers were outraged by this information such as Alice Smith, a 15 year old subscriber to Moviepass. Alice subscribed to Moviepass a couple months ago and since then has thought about canceling her subscription. She stated that “yes, Moviepass is a good deal, but with all these rumors going around I feel it is no longer worth it.”
On the other hand there are other customers who just don’t care, such as high school student Victor Edmundson who don’t care. “Moviepass provides a great deal and if they can profit off of small, insignificant information such as where I am, let them. I am saving hundreds of dollars.”
Last week, Moviepass CEO Mitch Lowe sent an email to all customers addressing the topic and denying what he had previously said. Lowe said that he was joking around and apologized for the confusion. Also in the email, he states that “MoviePass does not track and has never tracked or collected data on the location of our members at any point when the app is not active. In our recent update with Apple, we removed the the background tracking capabilities. MoviePass does not use and has never used this feature.”