Been a MoviePass member for about 6 years now, all the way back when they only had about 20,000 members and you had to pick your show time at home, print out a PAPER voucher and then take that to the theater. I love the service. I've been along the ride when prices went up, unlimited turned into like 5 or 6 movies a month, and then when prices dropped.
The key here is the service still isn't in full swing. They need to last long enough that they don't run out of money and die, but they still need to grown much larger before it all fits into place. If you run the numbers (which I've done before using data from the MPAA and estimated MoviePass members) if they can get to the size of Netflix and charge ~$15/mo, then they will collect roughly 100% of the 2017 box office every year just from their membership fee. The hard data that the MPAA releases shows that MoviePass could totally work if they were the size of Netflix, it's getting there that will be hard.
This is why we've seen such price drops to gain members fast (almost 2 million added in less then a full 12 months) and why we're starting to see AMC try to get into the game.
MoviePass could continue to drive the same box office domestic yearly growth if they had the same number of subscribers as Netflix (domestic only, approx. 55 million). MoviePass members tend to spend more on concessions at the theater. It's easier to spend $12 on soda and popcorn when you didn't actually pull any money out for a ticket. Monthly subscriber fees tend to get pushed back in your mind when you're there buying the concessions. That's good for theaters. Upcharge for IMAX or 3D is an additional revenue stream for Hollywood, just like it is now. $2 extra where you're at the box office for a 3D movie, again, it seems cheap when you're auto billed monthly for the subscription plan.
The thing I've been expecting for a long time is exactly what they're doing. Pushing the "unlimited" viewings into the slower days. Theaters can pack the house with good movies on Fridays and Saturdays without any problem, but they have trouble getting people in on a Tuesday night. Now if you can pay $10 to $20/mo and see unlimited movies every month BUT you have to go Sun-Wed, and if you go Thur, Fri, or Sat you pay $2/movie, well, it still seems like a great deal for many people, even if you only see one movie a week. Now the theater has more butts in seats on a Tuesday night or whatever and can sell more popcorn and soda those days.
The MoviePass system can work, both financially and logistically. It won't kill Hollywood and might actually improve theater profits. The scary thing for Hollywood is allowing a 3rd party in to manage the tickets. Hollywood wouldn't be setting prices, they would be working with MoviePass and collecting a per subscriber fee (+ any of the up charges). Theaters would have to go to MoviePass to negotiate discount days or what movies which markets should get, etc. It's allowing a new guy into the old guard AND giving him control of the pocket book. The numbers can all make sense and even point toward growth for everyone, but man it would be a lot of control to give over and that's why they've been fighting it from day one.
(btw, if you wonder how MoviePass would make money if they were passing almost all of it over to Hollywood, well... 1% kept for them on 55 million members paying $15/mo would be almost $100 million revenue... and all they have to do is maintain an app and the billing system and customer service... I'm sure they would try to take more then 1% too, and heck, maybe after a year they up it by $0.99 or $1.99. If $15/mo was a great value would $15.99 or $16.99 really be a deal breaker? Because now MoviePass would be making up to $1.4 BILLION a year. They're a long way from 55 million members, but I doubt people thought Netflix would be there, and a LOT of people go to movies still...)