MoviePass, the company that lets subscribers see one movie a day for $10 a month, recently announced that it will introduce a Peak Pricing model. The surge pricing will trigger whenever there is large demand for a movie and means that users will have to pay a few extra dollars (from $2 to $6) to book the ticket for that movie. The criteria for what constitutes "large demand" is not known.
Movie Pass is rolling out this model because since its monthly rate is priced so low, the company essentially loses money when its customers use a pass, because it pays theaters for the tickers it customers use. Its parent companies, Helios and Matheson Analytics
Wall Street has always criticized MoviePass' business model as one that is too good to be true. But MoviePass CEO Mitch Lowe argues that it is possible to have a business model where subscribers pay only $10 a month. Lowe explained that this decision was intended to let MoviePass' theater partners attract more traffic for big blockbusters after their opening day. Lowe commented, "We intend to keep the $9.95 model live and running. At the same time, we are launching new, on-demand options that members can add to their baseline subscription. The new optional add-ons will allow members to invite a friend to the theaters, upgrade to premium 3D and IMAX showings, or order tickets specifically for certain high-demand showings for a small additional fee." MoviePass is simultaneously introducing a new feature that allows users to add friends when purchasing a ticket through the app so that they can choose adjacent seats for theaters that require seat selection.
Entertainment company and movie theater operator AMC
Still, even with the new surge pricing features, it's expected that customers will continue to flock to the cheaper MoviePass programs.