The company is rolling out peak pricing à la Uber on top of its $9.95 monthly subscription.
Paying $9.95 a month for unlimited movie theater tix was too good to last.
MoviePass started rolling out surge pricing for peak movies and times on Thursday, meaning it will charge its three million subscribers $2 to $6 extra for the hottest films, or those showing on the busiest dates and times. You can skip this surcharge by choosing another date or picture, and every subscriber will soon be able to waive one peak fee per month, according to the MoviePass peak pricing FAQ.
This is how @MoviePass is implementing its new Peak Pricing feauture. Note the actual surcharge will vary based on showtime and movie title. Así es como Moviepass va a empezar a cobrar más por ciertas sesiones. @PatriciaPuentes y yo hablaremos de esto esta tarde en @CNET_Es . pic.twitter.com/3tHO4d4QF0
— marta franco (@marmotilla) July 5, 2018
“Peak-pricing is rolling out gradually over the next several weeks in order to ensure the best possible experience,” MoviePass told its subscribers on Thursday. “It starts today and impacts a limited number of showtimes.” A rep from the company also told Moneyish that members on an annual or quarterly plan won’t get hit with the peak pricing feature until their membership renewal date.
MoviePass tacked $3.43 extra onto a 7 p.m. showing of “Avengers: Infinity War” at a theater in “Everytown USA” in an example given to customers, according to The Hollywood Reporter. And that movie, while one of the summer’s biggest blockbusters, has been out for more than two months already. The new fees come just as Marvel’s next expected hit, “The Ant-Man and the Wasp” starring Paul Rudd and Evangeline Lilly, hits theaters this weekend.
MoviePass’ parent company, Helios and Matheson Analytics, warned last month that surge pricing was coming soon to a theater near you. The company has been under fire for losing $40 million or so a month since it slashed its subscription fee last year from around $50 a month to just $10.
But CEO Ted Farnsworth told Moneyish in a recent interview that peak pricing is intended to make the moviegoing experience better for subscribers, not to pull the company out of the red.
“We’re not an e-ticketing platform … So you can’t make a reservation (with MoviePass) now with theaters in big metro areas like AMC or Regal Cinemas, and people were going to the movies, and it would be sold out, and they would complain,” he explained. “So if you really want to see a big movie on opening night that will sell out very quickly, this (peak pricing) system lets you know, and encourages you to try an alternate date or time, so you can still have a great experience.”
Or you can swallow the cost and snag a seat for a few extra bucks: MoviePass noted on its FAQ that even with peak pricing, “you will be paying less for the ticket than you would if you bought it at retail price,” considering movie tickets run $9.16 on average, and they get considerably higher in metro areas like Los Angeles and New York City.
It’s similar to how Uber’s surge pricing works: When there are more people hailing rides than there are drivers on the road to pick them up — like when it’s raining or snowing, during rush hour or holidays like New Year’s Eve — prices increase 1.8 or 2.5 times. So a $10 ride would be $18 at a 1.8-time surge, in part to encourage riders to wait until there are more cars available. In the MoviePass app, a red lightning bolt icon will notify you if a movie’s specific showtime is in peak pricing, so you can opt to pick another flick or showtime. A gray bolt warns that the showtime is nearing peak pricing, so you may want to snag a stub now.
MoviePass still expects to hit five million subscribers for its $9.95 per month unlimited movie plan, which is good for more than 36,000 theaters across the country despite the surge pricing. And it’s cushioning the surge pricing blow with new features expected later this summer, such as being able to buy an extra ticket for a friend who’s not a member, although those stubs will run closer to the retail price of a ticket.
But AMC, the world’s largest movie exhibitor with more than 640 theaters, is hot on MoviePass’ heels. Last month, it dropped its own Stubs A-List plan, which lets members see three movies a week at all of its theaters for $19.95 a month without surge pricing. And its pass lets viewers buy tickets and reserve seats in advance, while MoviePass requires checking in at the theater at showtime.
So why doesn’t MoviePass just bump up its subscription price, too, instead of adding on peak pricing? The company addressed that in its FAQ: “By keeping the unlimited price as our base offering, you still get the best deal possible. AMC’s higher price means you pay more for way fewer options. Our model though lets you continue to see movies in a way that works best for you.”
© 2018 Dow Jones & Company, Inc. All Rights Reserved