I don’t know if you’ve heard of MoviePass, but it’s going to go down in history as one of the worst business ideas this side of Elon Musk’s Wild Cave Ride theme park. Here how it works: you pay MoviePass $10 a month and they pay theaters an average of $9 for a movie ticket as many times as you want. If it sounds like a scam, it is, but not on consumers, just on the Silicon Valley venture capitalists who will slam down millions of dollars for a piece of anything some computer science drop-out calls “the next Netflix.”
I think where this whole thing went wrong, and forgive me for not being an economist and just guessing here, is when MoviePass charged customers $10 a month and then paid out hundreds of dollars per customer to theaters with no plan on how to make a profit. Somebody had the idea that if they open a store selling $100 bills for $20, they’d get lots of customers. I can’t stress enough that MoviePass was able to get investors to give them millions of dollars for this endeavor.
MoviePass actually ran out of money last week and had to borrow $5 million just to deliver on its service to customers. The company has come up with a new plan to reach solvency again and has announced they’re no longer letting their customers see any good movies. They announced this in an open letter, saying “As we continue to evolve the service, certain movies may not always be available in every theater on our platform.” MoviePass is currently blacking out every movie except for a documentary about the horrible conditions marine mammals are forced to have interracial gangbangs in; it’s called Blackblackblackblackwhitefish. But with a runtime of four and a half hours, it’s hard to say it’s not a good value for the money.
According to Bloomberg News, “[MoviePass Chief Executive Officer Mitch] Lowe and lead investor Ted Farnsworth have said that they expect MoviePass to become profitable at 5 million subscribers. At the last count, the service had reached 3 million.” The problem is, much like Zero Mostel and Gene Wilder in the Mel Brooks film The Producers (which is blacked out by MoviePass), their business model loses more and more money the more successful it becomes. Literally the only way their business model can make money is if millions of people sign up for the service and then never use it to subsidize the people who are using it, and their only hope of breaking even is to have zero customers, a day which is coming soon.