Founded in 2011, MoviePass was a subscription service that offered customers the chance to watch one movie a day in theaters for just $9.99 a month. For some time, it offered subscribers unlimited theater attendance for a fixed monthly or yearly cost. Looking at theater prices today, it’s easy to see how unsustainable the business model was.
Within two days of its launch, the business shot up to 100,000 subscribers. After a year, the company had accumulated more than 3 million active subscribers. Unfortunately, its success with subscribers hardly eased its margin pressure. In September 2019, MoviePass shut down its service, and in January 2020, MoviePass’ parent company, Helios and Matheson (OTCMKTS:HMNY), filed for bankruptcy.
Since then it’s been mostly radio silence from MoviePass… until now. The business is relaunching on Sept. 5 in the form of a new beta, with a host of viewing options for eager moviegoers.
Starting this Thursday, the new MoviePass waitlist will open for five days, on a first-come, first-serve basis. Interested users can sign up for the waitlist for free, with just an email address and zip code. The first round of beta participants will be notified on Sept. 5.
Now, there are some key differences from the upcoming service and its predecessors. This may leave room for theaters like AMC to continue their current momentum.
AMC Stock Slumps on MoviePass Anticipation
Unlike its first go-around, this time MoviePass won’t offer any unlimited viewing options. Selected users from the beta will be given three price tiers to choose from, at $10, $20, or $30 per month. These will give subscribers a varying number of credits to use each month to see movies, added to a MoviePass Master Card. Beta participants will also receive 10 friend invites.
MoviePass reportedly has partnerships with roughly a quarter of all theaters in the U.S. making for some steep competition for the likes of legacy theater companies, like AMC. While the new movie subscription service doesn’t seem like it will be nearly as generous as its prior iteration, it’s a direct rival to AMC’s Stubs program.
Indeed, the Stubs A-list allows users to watch three movies per week for $20 a month, a deal that may be difficult for MoviePass to beat without taking on undo strain. Largely on the back of summer box-office hits like Top Gun: Maverick, AMC has also been on a pretty hot winning streak lately. In its second quarter earnings call earlier this month, the company reported strong movie attendance figures, up 168% from the same quarter last year. The company enjoyed similar gains in its adjusted earnings, and even managed to generate positive operating cash.
That is all to say, fans of AMC should keep a close eye on MoviePass as it launches its beta to see if AMC can continue its comeback story, or if the industry is spread a bit too thin.
The Movie Theater Industry Today
The movie business is in a far different place than it was when MoviePass first shut its doors. The pandemic slowed movie attendance considerably, and to some degree, the silver screen luster still hasn’t completely returned. With the proliferation of streaming services, and an increasing number of films receiving the straight-to-streaming treatment, theaters simply aren’t enjoying the crowds of days past.
With that said, things are slowly but surely returning to normal. In fact, as per a recent May study, 62% of Americans are comfortable going back to the movies, increased 18 percentage points since January of the year.
With MoviePass returning to the silver screen, it seems the post-pandemic theater resurgence may hasten even further.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.