Even if it could be restricted to be financially viable, the cinema chains were always going to be able to undercut them as they only pay the marginal cost while making money from the concessions.
*people don’t perceive this because people only go to popular movies
Perhaps, but the distributor (who gets 40-90% of the ticket cost) would have to agree to it somehow,.
It's like a gym membership. People like having the option to go to the gym whenever they want. Many gyms offer a per use fees but if you want to go more than once or twice a month, it is cheaper to have the membership. Actual operating costs are fairly low (machines aren't too expensive to fix and clean) but the real money maker is in all of the extra goods and services that you pay extra for.
Once you factor in profits from concessions (very high) and the adverts, the maths clearly works out well for the cinema chains. Certainly here in th UK a number of them are really pushing these sorts of schemes.
This is all in comparison to MP, who have to pay the full retail price of the ticket and get nothing from the concessions. The chains can probably absorb two to three times as many visits in a month compared with MP.
Many people only know of MoviePass as the $10 a month subscription service that sprung out of nowhere about 2 years ago, but MoviePass had been around much longer than that.
MoviePass started back in 2011 and originally required you to print out physical vouchers at home, and take them into the theater. MoviePass juggled lots of different pricing models ranging from $25 a month for 3 movies, up to $99 for an unlimited movies. And yes, for a while they had a $50 per month unlimited movie plan.
For the first 6 years of their business, they operated in this semi-sustainable way. They had funding from AOL Ventures, True Ventures, and other venture capital companies during the time but ran a fairly sustainable business.
In 2017 they finally had their "exit" when a publically traded analytics company called "Helios and Matheson" purchased a majority stake in the company. Helios and Matheson saw potential in MoviePass (which had been running "successfully" for 6 years at this point) and wanted to expand it to as many people as possible.
This is when MoviePass decided that the best way to get lots of new users is to offer them something they can't refuse. How about $10 a month for unlimited movies. This led to a myriad of articles and free press about the company and a huge influx of customers. This is when most people had first heard of MoviePass as if it came out of nowhere, but it had a solid 6-year history of being in this business.
The goal of this promotion was only to gain a large influx of customers. It was never intended to be a long term strategy. I also think that H&C (the parent company) intended to make money back by selling customer data (since they are already in that business anyway).
Unfortunately, like the Hoover story, they underestimated how many people would take advantage of this offer for unlimited movies.
The new owners always envision a different business model and those often span a gamut from slightly sinister to patently absurd.
Startups can have a lot of BS, it's true, but it's a different flavor from the post-exit BS.