So my post about MoviePass generated some interesting reponses including these two:

@mobius006 is right that my numbers weren't what would be as expected usage of the service. My numbers were closer to FUD (Fear, Uncertainty and Doubt), and that is not really the game I want to play. So I am going to use this post to show a real world example of the service.

A Real World Example

As stated in my previous post movies in Utah run around $8.75 (first run, non-matinee). The pass was offered to my at $29.99/month. In order to break even with MoviePass (which I would expect every customer would want to do) you have to watch 4 movies (3.42 actually). To make the pass pay you back you would have to watch 8 movies a month (two movies a week). Over the course of the year membership you will pay $359.88. You would have spent in tickets for the same time period $840. That makes a net of $480.12 saved. On the flip side if you took the 8 movies a month approach and for unseen reasons had to quit the service you would be subject to the fees detailed in the previous post. Let me break them down again:
  • $20 cancellation
  • Total Value of tickets purchased less the already paid membership dues.
Here is a table showing the the breakdown month over month:
  • Membership Fees $29.99
  • Ticket Price $8.75
  • Est Monthly Tickets 8
Month YTD Membership YTD # of Tickets Overage ETF
1 $29.99 8 $40.01 $0.00
2 $59.98 16 $80.02 $100.02
3 $89.97 24 $120.03 $140.03
4 $119.96 32 $160.04 $180.04
5 $149.95 40 $200.05 $220.05
6 $179.94 48 $240.06 $260.06
7 $209.93 56 $280.07 $300.07
8 $239.92 64 $320.08 $340.08
9 $269.91 72 $360.09 $380.09
10 $299.9 80 $400.10 $420.10
11 $329.89 88 $440.11 $460.11
12 $359.88 96 $480.12 $500.12
Here you can see that the ETF is your overage plus $20. There is clearly a point when the plan to quit is simply more expensive than to continue to pay out the monthly dues. There is one caveat to this structure. As layed out in section 27.12 paragraph 1:
27.12 MoviePass is an annual subscription. You may cancel your subscription at any time before the end of the trial period of 30 days from the activation date. If the account has not been used during that period, the User will receive a full refund of any subscription fee paid. If the account has been used, the user will receive a full refund of any subscription fee paid, less the full retail cost of tickets redeemed using their MoviePass.
The trial period is a great deal. For 30 days you can try out the service, with no gotchas. If you look at the first row of the table above you will notice there is no ETF for the trial. You can in fact use the service for the first month and declare it not for you and you are only out your membership fees for the first month. Please note you must cancel within the first 30 days. Take note on how to cancel:
27.13. To cancel, you must notify MoviePass in writing via email at support@moviepass.com during business hours (Monday through Friday, 9am-5pm EST) at least one business day prior to the next billing date. Cancellations are not effective until confirmation is sent to you via email, and you are responsible for all charges until cancellation is confirmed.
The purpose of the original article was to encourage users of any service to read the full Terms and Conditions of the agreement before signing up for anything. Too often we are stuck with large fees, or services that simply didn't meet the metric the consumer is made to believe they are purchasing. I am not saying that is the case with MoviePass, instead what I am saying is be aware of the gotchas in this particular setup. Make sure you realize the full impact of signing up for the service before you do it. On a final note about MoviePass one of my reader commented that there is a clause in their T&Cs that allows MoviePass to terminate your service at any time with or without reason.
27.10. MoviePass may terminate the subscription at any time for any reason or none whatsoever;
Then in 27.12 paragraph two they state:
After the 30 day trial period, the user will be charged a $20 cancellation fee to terminate their account, provided that the cancellation does not fall under 'legitimate grounds.' In addition, if the full retail cost paid by MoviePass of any tickets redeemed during the length of subscription exceeds the total subscription fees paid thus far, the user will be responsible for the difference. If the full retail cost paid by MoviePass of any tickets redeemed during the length of subscription is less than the total subscription fees paid thus far, than the user is only responsible for the $20 cancellation fee, and will not be refunded the difference. If a promotional code has been applied to your membership, the discount becomes null and void in the event of early cancellation. Existing payments will be calculated for their true value, not promotional value.
I decided the wording here is suggesting that if the user terminates the contract, not MoviePass, the user will be responsible for the overage costs. To verify this I went online and chatted with MoviePass customer care (via their chat app available on MoviePass.com). Here is a transcript of that dialog:

Me: If MoviePass terminates the relationship would the user be responsible for the overages?

Ryan: Only in the event that the terms of service were violated.

Me: MoviePass reserves the right to terminate any account at any time, for any reason. It is in the T&Cs. If MoviePass terminates the account for a reason not specifically listed in the T&Cs (perhaps over use of the system) would the user be held responsible for the overages?

Ryan: Right, if the user did not violate the T&C, then the user would not be responsible for overages or termination fees.

Hopefully that clears that all up.

That's a Wrap

Again, it was never my intention to scare people away from MoviePass. If I were able to make it to 4 or more movies a month I certainly would sign up for this service. Instead my intentions were to show people that there are two sides to ever contract (T&Cs) and that you must be aware of all your obligations when signing up for a service like MoviePass.