Had MoviePass parent Helios and Matheson Analytics (HMNY +0.00%) used common sense when it hatched its unlimited movie ticket plan last year, it might have come up with something close to what rival Sinemia just unveiled: the chance to see one movie a day for $30 per month.
Sinemia says, "The new plan offers a sustainable, reasonable model for seeing movies on an unlimited basis," an obvious dig at MoviePass for its ability to burn through cash at an alarming rate. That statement has the ring of truth, since MoviePass is planning its second reverse split of the past two months to artificially boost its stock price and maintain its Nasdaq listing.
Image source: Getty Images.
The forgotten way
MoviePass long ago had the right idea about pricing. Before it unveiled its ridiculously cheap $9.95 per month, all-you-can-eat smorgasbord of movie viewing, MoviePass had pricing plans that recognized you couldn't offer virtually unlimited movies at any theater for a rock-bottom price and hope to survive as a business.
Plans for unlimited movie viewing previously valued the service with prices ranging at various times from $40 or $50 per month, all the way up to $99 per month. While prices at the extreme end of that range meant very few people signed up, the deep discounts that Helios and Matheson ended up offering meant it was doomed to lose money rapidly.
A price somewhere in between might have put MoviePass close to a "sustainable" model that was still attractive to the average movie fan.
Priced to sell
According to Sinemia, its pricing plans are focused on the "modern moviegoer" who takes in just one, two, or three movies a month. While someone going to the theater every day under its new unlimited plan would become a financial liability to Sinemia, people with that much time on their hands are undoubtedly few and far between.
And because Sinemia bills the fee annually by default, it's betting that over the course of a year, it will come out ahead, or at least break even. (You can choose to be billed monthly, but there's an additional $19.99 initiation fee -- $29.99 for the unlimited plan -- that's waived if you choose the yearly billing method.)
|
No. of Movies Per Month |
Plan Tier |
Monthly Cost* |
Annual Billing |
|---|---|---|---|
|
1 |
Classic |
$4.99 |
$59.88 |
|
2 |
Elite |
$12.99 |
$155.88 |
|
3 |
Classic |
$9.99 |
$119.88 |
|
3 |
Elite |
$12.99 |
$155.88 |
|
30 |
Classic |
$29.99 |
$359.88 |
*Monthly billing comes with a $19.99 initiation fee. The unlimited plan has a $29.99 initiation fee for monthly billing. Elite plans include 3D and IMAX-4DX theaters. Data source: Sinemia. Chart by author.
Meeting the demand
Movie theater chains are testing their own services, too. AMC Entertainment (AMC +3.46%) has launched Stubs A-List, offering three movies per week for $19.95 per month. Cinemark's (CNK +2.70%) Movie Club offers one ticket per month for $8.99, but throws in 20% discounts on concessions (additional tickets can be purchased for $8.99 as well).
Had Helios and Matheson chosen a more thoughtful plan for its service, it might have come up with something similar and not be standing on the brink. It was already close to a seemingly optimal price point; instead of going for broke (literally) by giving away unlimited movie tickets for $10 per month, the outcome could have been very different.
Yes, MoviePass brought in millions of moviegoers as members, but scale without an offsetting way to pay for it is a prescription for disaster. Sinemia's pricing model may not be optimal, either, and might need tweaking. But it is much closer to a sustainable model -- one that MoviePass itself once offered.
MoviePass has now eliminated unlimited movie viewing as it scrambles to survive, but Sinemia is proving there might be a way to serve that portion of the moviegoing public while being financially responsible.
