Business Tech

Movie Pass: Behind the Scenes

If you attend your local movie theater regularly you have likely heard of a company called MoviePass. While it was founded in 2011, MoviePass garnered waves of attention last summer when the company announced it was lowering its monthly subscription price to $9.95. You can now see one film every day of the month for less than a standard Netflix bill. At this point however you probably noticed some structural problems with this business model. If a subscriber goes to just two movies in a month, MoviePass at a minimum must cover that extra ten dollar ticket. In larger markets where a trip to the movies is even more expensive, MoviePass may already be in the red after the subscriber requests to see a single film.

AMC’s statement that the, “price level is unsustainable” would be a reasonable critique if this was only a matter of simple arithmetic. Luckily for us, MoviePass’ most recent conflict with AMC gives us an opportunity to look at the enterprising company’s plan for a cinematic future.

In order to turn a profit MoviePass needs to develop alternative means of generating revenues. The most obvious route is to take a share in the concessions sold at movie theaters. A number of independent theaters have already taken up the offer in the hopes of driving more traffic to their venue. But some of the largest gatekeepers of the movie experience, chief among them being AMC, have so far refused to take a seat at the negotiating table with AMC CEO Adam Aron going as far to say, “it's also important to make clear that despite claims they've (MoviePass) made to the contrary, AMC has absolutely no intention, I repeat no intention, of sharing any – I repeat, any, of our admissions revenue or our concessions revenue with MoviePass.”

While theater chains are more than happy to take MoviePass’ money for full-priced tickets it is clear they are less inclined to share profits in an industry that has witnessed declining ticket sales. To overcome this problem MoviePass hopes to harness attendance data gathered by its 1.5 million and growing subscriber base. If it can demonstrate that audiences are more likely to attend films promoted by its app as well as increase concession sales stands, it could prove to be a large enough game changer to bring AMC to the table.

MoviePass CEO Mitch Lowe told Wired, “Those customers are spending on average $13 on popcorn and soda, which is more than double the norm, because they’re not shelling out money for their ticket. The minute we start to not show every theater in the AMC brand, or every movie, that’s when that will start to turn around.”

Last Friday MoviePass pulled its subscription service from ten high-traffic AMC theaters in its first attempt to strong-arm the giant. At this point it is too early to tell which side will blink first, but in the meantime it hasn’t been this inexpensive to be a movie goer in years.

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