Movie subscription service MoviePass today confirmed that it will soon introduce surge pricing into its business model, charging customers from $2 and up for films that the company deems popular. The news comes from MoviePass CEO Mitch Lowe, who confirmed to Business Insider that surge pricing will affect monthly subscribers while annual subscribers will be exempt from what he describes as "high-demand" pricing.
The change will appear for affected subscribers within the "coming weeks," according to Lowe. Surge pricing is a dynamic, time-based strategy that apps like Uber use when a large amount of customers are requesting rides in the app but there aren't enough drivers to taxi them around.
Now this will extend to MoviePass, so on opening weekends or at particularly busy late-night showings of popular movies, monthly subscribers should expect to pay a bit more above their locked-in $9.95/month subscription price. Because this is not a fee that the movie theater is charging, users can expect MoviePass to take the surge pricing fee from the credit cards associated with their account -- although Lowe or any MoviePass spokesperson has yet to confirm this.
"At certain times for certain films — on opening weekend — there could be an additional charge for films," Lowe told Business Insider.
Lowe said this decision was a way to have its theaters partners see more traffic for big blockbusters in the mid-week and less-crowded weekends following the movie's opening weekend. It was also to "make sure that we can continue to offer a valuable service and support the whole enterprise," Lowe added.
Otherwise, there are two other additions coming to MoviePass this summer: a bring-a-friend feature and IMAX/3D screenings. In the MoviePass iOS and Android app, subscribers will be able to add on a ticket for a non-MoviePass friend, the cost of which will be "somewhere near the retail price of the ticket."
For IMAX and 3D movies, users will be given the option to pay an added fee for the premium screenings, ranging from $2-$6 according to Lowe. As of now, one of MoviePass' detriments is that it only allows subscribers to watch regular 2D movies. At launch subscribers will have to choose one of these features or the other for a single film, but eventually they will be able to combine premium and bring-a-friend options for the same movie.
The MoviePass news comes after AMC just yesterday revealed its own movie subscription service, which will let customers watch three movies per week for $19.95 a month -- including IMAX and RealD 3D showings. Lowe responded to this new rival service today as well:
"It's been tough when you have the president of AMC essentially for eight or nine months telling everybody that our subscription was not sustainable, and then he comes out with a program that essentially could cost him $60 or $80 a month to pay the studios their minimums and collecting $19.95," Lowe said, referring to AMC CEO Adam Aron. "So it is a little bit kind of funny that it's pretty clear what he wanted to do — clear the way for his own subscription program and not have competition."
All of the new MoviePass features -- including surge pricing -- will appear in the MoviePass app by the end of August.