Movie theaters became just another living room - people go there chat, comment and eat during the movie just like they were at home. It became such an obnoxious experience, where people are shoved into a room and door is closed.
This goes to say: movie theaters had a lot of distribution costs reduced over the years, and probably even the reform of projectors isn't such a big deal today due to digital distribution.
MoviePass is aiming to give them volume, at a reduced margin - that's how.