Late last summer, MoviePass introduced a seemingly impossible offer: See a movie every single day in theaters, paying only a monthly fee that, in most markets, amounts to less than a single ticket. It worked. Earlier this month, MoviePass hit 1.5 million subscribers, growing much faster than anyone expected, including MoviePass.

But amassing customers was never going to be the hard part. MoviePass now has to show that it can actually, you know, make money. A little less than six months in, it looks as though it just might have an answer—although a fresh spat with AMC shows that not everyone will like it.

Giving It Away

To be absolutely clear: The more subscribers MoviePass signs up, the more money it loses. It pays theaters full price for each ticket, whether a member visits once or 31 times a month. It has to provide for customer service to support those 1.5 million people, many of whom have lobbed valid complaints—MoviePass issues debit cards to each of its members, and initially couldn't keep up with demand—as the service struggled with its rapid expansion. And that’s on top of the usual, unglamorous costs of running any business. (Backends don’t maintain themselves.) If it seems like MoviePass is too good to be true, that’s because right now, it is.

'It’s a lot more fun to be riding a wild bronco than to be trying to tame a mare.' MoviePass CEO Mitch Lowe

Which is also why its explosive growth hasn’t been an unvarnished good, at least in the short term. “It’s harder in some respects and easier in others,” says MoviePass CEO Mitch Lowe, who cites the company’s customer service falterings as a primary drawback. There’s also the matter of all the cash the company must have run through by now; Helios and Matheson, an analytics company which has a majority stake in MoviePass, continues to put millions toward keeping the company afloat through the outflow. Analyst Brian Kintsligner of Maxim Group recently wrote that the company had "an estimated seven months of cash" to cover losses incurred by heavy-usage members.

The question, then, might not be whether MoviePass has a long-term plan for success—it's if the company can stick around long enough to see it through.

Su-Su-Studios

Perhaps understandably, Lowe focuses on the opportunities that the MoviePass masses afford him. “It’s a lot more fun to be riding a wild bronco than to be trying to tame a mare,” he says. Besides, for MoviePass, more users means more data, which in turn means more leverage. And leverage is key to Lowe’s goals; sure, he's trying to turn a profit, but he's also fundamentally rethinking the business of going to the movies.

From the start, MoviePass’s most likely allies have been independent studios, the kind for whom an incremental box-office uptick can turn a breakeven investment into a success. Those are the kinds of movies MoviePass subscribers go to, after all; it’s easier to take a flyer on The Shape of Water if the ticket is effectively free. But the challenge for MoviePass isn't merely to demonstrate its value to studios. The company needs to show that it can directly influence subscriber behavior through marketing maneuvers, whether in-app or through email and social media.

It's already scored some demonstrable wins. While 3 percent of all domestic box office gets purchased through MoviePass, the number jumps to 10 percent when MoviePass pushes a product, according to the company’s own tracking. Which has already led to some actual revenue. “We’ve got more than four contracts that are revenue-producing, in the six-figures-type range, for films,” says Lowe of deals in which MoviePass promotes specific movies to its customers. “The studios really do see the light, and see that we could be a valuable ally in rejuvenating the business.”

Lowe argues that the pitch becomes even more compelling as MoviePass continues to grow, projecting that his subscriber base will triple by the end of the summer. At which point, the reasoning goes, the MoviePass Bump would jump in kind, from a six or seven percent incremental lift to something closer to 20 percent.