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MoviePass tests new prices, aims to reach a $20 plan

Engadget Engadget 1/07/2016 Devindra Hardawar
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MoviePass, the subscription service that lets you see one theatrical film every 24 hours, has come under fire after testing out new pricing options with some customers, which are significantly more expensive and restrictive than existing plans. The complaints also come on the heels of this week's announcement of a new CEO: Mitch Lowe, a Netflix co-founder who later moved over to RedBox.

While the service typically starts around $30 a month (though it varies by market, it's $45 monthly in NYC), a select group of users have received emails saying their plans will move to $40 or $50 a month with a limit of six films. For truly unlimited viewing, they have the option of paying $99 a month, a price significantly above anything MoviePass has charged before. Previously, MoviePass subscribers could see one film a day on their base plans, the only restriction was they could only see each film once.

"We're trying to understand all the different considerations about different price points," Lowe said in an interview today. He stressed that the company is only testing new pricing with an incredibly small portion of its subscribers, and these messages don't reflect new rates for all customers.

In particular, he discovered that the $99 plan won't work at all. "Our goal was to try to see what the uppermost limit was and we definitely found that that was too high," he said. While it might seem unfair to loyal customers to simply throw expensive new rates at them, Lowe defended that method, saying that it's "the only way to really get a valid test... If you give people a choice, they almost always take what you'd expect, so you don't learn anything."

MoviePass CEO Mitch Lowe

MoviePass plans to test out different rates with existing and former customers, and it's launching a new campaign to entice new users soon. There will be surveys to figure out what people think, as well. Lowe says he wants to find the ideal price point for MoviePass that people would actually love, similar to his "all you can eat" Netflix plan from 1999, and Redbox's dollar nights, which he launched in 2003.

"My goal is to get a $20 price point, I'm looking for what's going to be super attractive there," Lowe said. "There'll be options, but people will be able to choose from various price points that will give them different levels, so people will ultimately be able to pick and choose what's best."

Lowe doesn't know when MoviePass can offer a $20 plan yet, but he's exploring many different options. It likely won't just be about discounted tickets, he also mentioned perks like special screenings reserved just for MoviePass members.

As a MoviePass member and unabashed cinephile, I've seen the price jump from $30 a month to $45 in NYC, but even that wasn't enough to make me abandon ship. Ticket prices are insanely high here -- typically starting around $15 for a 2D film -- so anything that helps to cut down costs is still valuable. But there have definitely been months where I've second-guessed my membership, especially when I don't even use it for $45 worth of tickets.

MoviePass has had a rocky start. Announced back in 2011, some theaters were quick to reject it during beta testing, and it took a while to get them onboard. The company officially launched in 2012, but it took two more years for it to support 3D and IMAX shows (something it still only does in two markets).

Still, MoviePass has plenty of potential left. "I'm hoping we can create a model that will get more people going to the movies," Lowe said.

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