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Topic: Meet the Lone Loser in MoviePass Hitting 1 Million Members
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Mark Ogden
Jedi Master Film Handler
Posts: 943
From: Little Falls, N.J.
Registered: Jun 99
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posted 01-25-2018 05:09 PM
MoviePass yoinks coverage at some major market AMCs.
EXCLUSIVE: In a surprise twist for MoviePass . . . some of the monthly movie ticket’s subscribers learned today that their app and cards no longer work at certain AMC venues, i.e. the Empire 25 in New York City.
From what Deadline has gathered, it’s not AMC turning off the spigot, rather it appears to be coming from the MoviePass side. The MoviePass debit Master Card is accepted by any and all venues that are listed on the ticket agency’s mobile app. Essentially, MoviePass will no longer cover ticket purchases at certain big market AMC theaters such as the Empire 25 in NYC, the Universal City Walk, AMC Loews Boston Common and the AMC Century Plaza. It’s not as though MoviePass won’t work at other AMC venues. Note, MoviePass doesn’t cover ArcLight Cinemas, Landmark Theateres or iPic, and that doesn’t have to do with the exhibitor, but largely the high ticket price point of these theaters, and what MoviePass is willing to cover.
CEO Mitch Lowe issued the following statement about the latest MoviePass outage as many took to Twitter to complain: “As of today, you’ll find a small handful of theaters are no longer available on our platform. Our number one goal as a company is to provide an accessible price-point for people to enjoy films the way they’re meant to be seen: on the big screen. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values. As we continue to strive for mutually-beneficial relationships with theaters, the list of theaters we work with is subject to change. We advise customers to always double check the MoviePass app for the most up-to-date list of participating theaters.”
MoviePass insiders have informed Deadline that the movie ticket service covers over $2M in ticket sales weekly to AMC.
When reached for comment, AMC would not return calls.
Some of our guests say MoviePass may be blocking the use of their service at a handful of AMC locations. AMC has not restricted MoviePass acceptance at our theatres, nor have we heard from MoviePass about this. MoviePass customers should contact MoviePass for clarification.
Since MoviePass’ relaunch late last summer, the movie ticket agency has had rocky relationship with AMC. Initially, the world’s largest exhibitor tried to block MoviePass, but came around to accepting them. AMC CEO Adam Aron said in a November earnings conference call, “”MoviePass paid AMC, according to our records, $11.88 for each and every ticket that it purchased for our mutual guest. That’s quite a gap, $9.95 a month versus $11.88 a visit. I must point out that’s very gracious of them and we appreciate their business, but I think it’s also important to make clear that despite claims they’ve 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.”
Earlier today, MarketWatch announced, that MoviePass parent company Helios & Matheson Analytics Inc. filed a $400M shelf registration with the SEC on Thursday. In its filing, the company said it will, “from time to time” sell in one or more offerings up to $400M in any combination of stock, preferred stock, warrants, units and subscription rights. HMNY closed at $8.93 today, -2.4%. Current market cap on HMNY is just over $214M.
*****
All the theaters mentioned are very popular and high grossing. I wonder if MoviePass is trying to slow their losses by restricting use to smaller and less popular sites.
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 01-26-2018 06:04 PM
So, they DO want to discount ticket prices (especially for independents?! WTF is that?) and they DO want a slice of the concessions, "eventually."
MoviePass Escalates AMC War as CEO Answers Critics
It could be all-out war between AMC and MoviePass, the service offering a movie ticket per day for just $9.95 a month.
"Since the get-go, AMC has not been interested in collaborating with MoviePass — a move that is not in the interest of our subscribers and AMC theater-goers," said Ted Farnsworth, CEO of MoviePass parent Helios and Matheson Analytics on Friday.
MoviePass pays full price for the tickets it buys its subs, but said Friday it has excluded 10 AMC theaters. "We already know in past testing that MoviePass subscribers are not theater-loyal; they're happy to drive by a theater that may be closer to a theater that will accept MoviePass," said Farnsworth, who maintains that MoviePass could generate $34.4 million of gross profit for AMC in the upcoming quarter.
MoviePass CEO Mitch Lowe, who knows a thing or two about potentially disruptive businesses, given he was also on the ground floor of both Netflix and Redbox, answered his detractors in a Q&A with The Hollywood Reporter.
Hollywood Reporter: Beyond today's statement from Farnsworth, what’s the latest in AMC’s threat of legal action to opt out of your service?
Lowe: Well, you haven’t heard anything since their earnings call a few months ago when they basically said they’re happy to take our money, we just can’t figure out how they’ll make money. That’s a far cry from August when they said they want to figure out how they won’t have to take MoviePass. I spend literally millions of dollars buying AMC tickets and my subscribers spend twice what they were spending for concessions at AMC at 80 percent margins. I’d think at this point, if you were a good businessman, you’d be thrilled to take our money.
HR: How much are you losing per subscriber?
Lowe: We don’t reveal that, but you’d be shocked how little it is. In the near future, we’ll be sharing those numbers, and it’s going down — the longer a subscriber subscribes, the fewer movies they see in a month. Also, we started out getting a lot of heavy moviegoers, the 11 percent of the country who were seeing 18 or more movies a year, and now we’re getting more of the average moviegoer who sees four-and-a-half movies a year.
HR: If they’re seeing fewer than a movie a month, why do they bother subscribing?
Lowe: That’s a perfect question. They tell us they’re sick and tired of wasting their money on a bad film and MoviePass is like insurance: They know they risk a bad movie and even walk out early, trash it, and not feel like they wasted their money. They also like a fixed fee, so they can see five movies in December that are nominated for Golden Globes, then not see any in January, and see more when the Oscar nominations come out.
HR: You say marketing movies is a path to profitability. But when one of your subs go to a movie you market, it costs you the price of a ticket, almost $10. How is that a good thing for MoviePass?
Lowe: We’re collecting on average $2 from a studio to market their film and ultimately we’ll be getting a $2 discount from most exhibitors and eventually we’ll be getting $2-$3 in increased concession sales. I know many say they don’t want to do that, but when we partner with a theater giving us a 20 percent discount, subscribers go to that theater four times more often than they did before and spend twice as much on concessions. We’ll also be selling advertising.
HR: Do you have any big theater chains splitting revenue with you yet?
Lowe: We have about 1,000 screens that give us a discount and we just signed our fourth studio contract. The names are confidential, but subscribers will see the promotions.
HR: Any theaters splitting concession revenue?
Lowe: No, but we don’t quite have the technology to make that work. Our subscriber would have to pick their concessions within the app and it would have to be integrated at the point of sale, and we haven’t built that yet.
HR: You mentioned both marketing and advertising. What’s the difference between marketing and selling ads?
Lowe: Advertising meaning banner ads within our application, not just for movies, for anything. We signed a deal two weeks ago with iHeart Media. They’ve become our non-exclusive reseller of advertising on our app and our site.
HR: You also said selling data is a path to profitability. What data do you have that the studio marketers do not have?
Lowe: It’s not so much selling the data as using it. For example, we know the moment you walk out of Star Wars that you’re emotionally charged and we know where you are, and we could hypothetically sell you all the previous Star Wars with a click, or tell you there’s a restaurant across the street where you’ll get a free appetizer with your MoviePass app.
HR: Have you done that with any films yet?
Lowe: We tested and got between 1-4 percent purchase rates without any discounts.
HR: Did you test it with the permission of the studio?
Lowe: Why would we need their permission?
HR: I don’t know. What movie did you test it on?
Lowe: Three or four months ago and I don’t remember the title.
HR: How long before you’re profitable?
Lowe: We figure between 3 million and 4 million subscribers.
HR: What other initiatives are in the works to monetize your business?
Lowe: Those are the big ones. We’re signing five contracts a week with independent theaters where we get a lower cost on tickets and that will ultimately lead to a piece of concession sales, and we have a team in L.A. striking deals with studios.
HR: How much cash do you have?
Lowe: Plenty.
HR: Is there a point when you’ll just not be able to afford more subs because you’re buying them too many tickets?
Lowe: No. I don’t know why everybody believes that our customers are watching so many movies. At some point we’ll share more data with you and you’ll be shocked. In the meantime we’re investing for the future and our subscribers are going to the movies twice as much as they did before.
HR: But when you say things like that it seems to indicate they’re going more than once a month, and that’s all it takes for you to lose money, no?
Lowe: The primary subscriber is one of the 200 million people who see four-and-a-half movies a year and when you double four-and-a-half you get to nine, and that’s three quarters of a movie a month.
HR: If you’re going to be marketing films to people and your whole pitch is that they’ll see more films, then what happens when your average subscriber is seeing two films a month?
Lowe: If that happens for any length of time there will be a lot of people who benefit and they’ll have to decide: do they want us to continue to do this and will they share a small portion of their incremental profit?
HR: Is there a point where you’ll need to raise the price of a sub?
Lowe: We don’t need to raise the price. I spent a year studying how I can get people who spend $50 a year going to movies to spend $120 a year, and $9.95 is the price point that gets them into the theaters more often.
HR: Is there a point where you’ll need to restrict tickets to off hours, like weekdays and matinees only?
Lowe: I don’t know why we’d need to do that, because that happens to be the primary way our subscribers use the service. They know it’s not a luxury product and they may not get a seat on opening weekend because with MoviePass you can’t reserve a seat until you get to the theater. So our subscribers naturally go after opening weekend and during the week and during the day. That’s a byproduct of the way the service works. You can’t expect all the bells and whistles, and theaters like that because we’re filling seats that would go empty.
HR: What’s your answer to the claim by AMC and others that your service devalues the moviegoing experience by making it dirt cheap?
Lowe: How are we making it dirt cheap when we’re taking someone who only spent $50 a year on movies and getting them to spend $120? It’s almost un-American to think that their method is the right one. Their method is, every year 3 percent fewer people go to the movies, so we’re going to raise prices. That’s a dead end. They’ll do what they’re already doing, which is drive people to streaming.
HR: Walk me through the mechanics of being a user.
Lowe: You sign up and we send you a MasterCard debit card that has no value and you then upload our app that lets you click on the movie you want to see and the theater and showtime. You will click “check in” when you get 100 yards from the box office and that card will become good for 30 minutes at that theater only with enough credit to buy one ticket, and you can do that once a day.
HR: Is there a way to troubleshoot if it’s not working when I get to a theater?
Lowe: Like any service, we can have problems with the internet, but we’re in the process of rolling out live phone help. But the theaters we do partnerships with, like Studio Movie Grill, you don’t use your card because a barcode comes up on your phone.
HR: Are you considered one of the founders at Netflix?
Lowe: Technically, I’m a co-founding executive. I hired Ted Sarandos. I owned a chain of 10 video stores in Northern California and he was my rep. When Reed Hastings wanted me to move to L.A. and run content, I couldn’t do it so I talked Ted into joining.
HR: You regret not taking the chief content role at Netflix, which has made Sarandos very rich?
Lowe: Well, I got plenty rich, but I couldn’t have done anywhere near the job that Ted has done. I love movies and content, but Ted’s just a genius. Three years later I was recruited by McDonald’s which had this crazy idea that if you put movie kiosks in their restaurants they’d sell burgers and fries when you had to return the movies, and that’s when Gregg Kaplan and I founded Redbox, funded by McDonald’s.
HR: What’s one more thing you want consumers to understand about MoviePass?
Lowe: It’s a way to see all those great movies you want to see in theaters that you’d normally wait for on video, and it’s the same price as Netflix.
HR: What’s one thing you’d like to say to put the movie industry at ease?
Lowe: That I’m a big believer in seeing movies at theaters and want nothing more than to make the entire ecosystem healthier and stronger. There’s nothing else out there that has had a more positive influence on theaters than MoviePass.
HR article
EDIT: I don't know why the URL above isn't displaying as a link like usual -- I followed the same procedure as always for posting a link and tried it 3 times.
[ 02-01-2018, 11:18 PM: Message edited by: Adam Martin ]
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Scott Jentsch
Phenomenal Film Handler
Posts: 1061
From: New Berlin, WI, USA
Registered: Apr 2003
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posted 01-27-2018 04:01 PM
The Verge had an article that referenced the Deadline article about AMC and MoviePass, and the final paragraph hit the nail on the head in my opinion:
quote:
MoviePass isn’t trying to help movie theaters; it’s trying to use them to capture data it can sell. It isn’t trying to help people see more movies out of some altruistic bent; it’s hoping to spike attendance in the short term so it can expand the pool of people whose data it’s collecting. And when it doesn’t get the answers it likes from a chain like AMC, it’s willing to cut those theaters out completely, regardless of the harm that does to its customers or reputation. While a $9.95 subscription deal may sound great, it’s really only a good deal if it works consistently, at the theaters where customers want to use it. And as MoviePass’ CEO said, those theaters are subject to change.
https://www.theverge.com/2018/1/25/16934344/moviepass-amc-theaters-support-tickets
quote:
MoviePass pulls support from popular AMC theaters
MoviePass and the AMC Theatres chain have never exactly enjoyed a rosy relationship, and the latest step in their conflict came today, as MoviePass pulled support from some of the chain’s most high-profile locations. Deadline reports that the service is no longer supporting ticket purchases at theaters like the AMC Empire 25 in New York, Universal City Walk near Los Angeles, and the AMC Loews Boston Common.
“As of today, you’ll find a small handful of theaters are no longer available on our platform,” MoviePass CEO Mitch Lowe said in a statement. “Our number one goal as a company is to provide an accessible price-point for people to enjoy films the way they’re meant to be seen: on the big screen. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values.” The statement goes on to clarify that the list of participating theaters is subject to change, and MoviePass customers should consult the mobile app for updates to that list.
AMC and MoviePass have been publicly at odds since the subscription service drastically cut its monthly subscription price in August 2017. (The company previously relied on a tiered model that scaled monthly pricing from $15 to $50 based on region, much like movie ticket prices can vary from one locale to another.) AMC responded by threatening to drop out of MoviePass’ deal, and potentially even file a lawsuit. The chain’s logic has been straightforward, however: mass adoption of a subscription service like MoviePass could effectively change the perceived value of movies, resulting in a situation where theatrical exhibitors wouldn’t be able to charge enough to keep their own businesses afloat.
“AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theaters, nor will it produce enough income to provide filmmakers with sufficient incentive to make great new movies,” the company said in August.
What’s interesting about today’s development is that MoviePass reportedly didn’t notify AMC or its own customers ahead of time. In fact, AMC’s own support account on Twitter wrote earlier today that MoviePass still has not contacted the chain about the development. Given the public rancor between the two companies, it seems likely that MoviePass made the change quietly as a bit of hardball negotiation, hoping customers would become angry with the theater chain and blame it for the problem. On social media, that appears to be exactly what’s happened. But in reality, the tactic could easily backfire on MoviePass, as customers realize they can’t trust the company to consistently provide access to their favorite theaters. Presenting MoviePass access as arbitrary and subject to political maneuvering is hardly a consumer-friendly tactic.
"MoviePass customers may suddenly find that it no longer supports their favorite theater"
It’s been clear for some time that MoviePass isn’t simply trying to find ways to bring more people into existing movie theaters. The subscription-price reduction came after MoviePass sold a majority stake to the data firm Helios and Matheson Analytics, Inc., and the change has allowed the company to jump from around 20,000 subscribers to 1.5 million subscribers as of January 2018. MoviePass’ ability to track what movies its customers are watching, and where they’re buying tickets, is valuable data for marketers, advertisers, and distributors. And Lowe has said that selling that data is a major way that MoviePass is going to make money. Not having access to AMC — the largest theater chain in both the United States and the entire world — could make achieving that goal more difficult, since it would be clear MoviePass’ data would be incomplete. There are good reasons AMC was the first chain MoviePass signed a deal with, and that importance is likely why MoviePass is being so aggressive around AMC now.
MoviePass is already trying to add revenue streams past its data-driven approach. The company has been heavily promoting movies like I, Tonya and Forever My Girl to its users, clearly as part of a paid promotional package. And before 2018’s Sundance Film Festival, the company announced it had spun up a division that will actually acquire movies, then use a traditional distribution company to get them into theaters. During Sundance, it partnered with distributor The Orchard to purchase North American distribution rights for Bart Layton’s American Animals for $3 million, giving the company the opportunity to create a closed loop with a captive audience: it can own part of a movie that it then promotes to its own customers, driving up the ticket sales that its own subscription service helps generate.
And like most entertainment companies, MoviePass is already looking beyond theatrical exhibition. In November, CEO Mitch Lowe said on CNBC that the company would eventually launch its own streaming service as well. But as MoviePass tries to hardball AMC into going along with its demands, and as it lures in millions of customers by offering increasingly lower ticket prices, it’s important to remember that when something seems too good to be true, it often is.
MoviePass isn’t trying to help movie theaters; it’s trying to use them to capture data it can sell. It isn’t trying to help people see more movies out of some altruistic bent; it’s hoping to spike attendance in the short term so it can expand the pool of people whose data it’s collecting. And when it doesn’t get the answers it likes from a chain like AMC, it’s willing to cut those theaters out completely, regardless of the harm that does to its customers or reputation. While a $9.95 subscription deal may sound great, it’s really only a good deal if it works consistently, at the theaters where customers want to use it. And as MoviePass’ CEO said, those theaters are subject to change.
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Jonathan M. Crist
Jedi Master Film Handler
Posts: 531
From: Hershey, PA, USA
Registered: Apr 2000
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posted 01-29-2018 05:16 PM
As Teddy Roosevelt used to say: If you got them by the balls their hearts and minds will follow. And so will their checkbooks:
HOW DOES MOVIEPASS MAKE MONEY? WE'RE STARTING TO FIND OUT
MoviePass has pulled support from some AMC theaters, just one of many signs it's finally serious about making money.
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.
That kind of value proposition isn't just for indies—it would also grab the attention of the bigger studios. “They’re going to have really approach major studios and show a direct correlation to people going to see movies that they might not have otherwise gone to see,” says Wade Holden, a movie theater industry analyst with S&P Global. “It’s all about them finding unique ways to leverage their service.”
From the start, MoviePass’s most likely allies have been independent studios.
One of those ways materialized late last week, with the launch of MoviePass Ventures, an acquisition wing that aims to co-purchase small films alongside established distributors. The MoviePass team spent the week at Sundance, armed with data about what types of films get his audience to the theater. “It’s not as sophisticated as what Netflix uses, since they have years of data and many, many millions of subscribers,” says Lowe. “But it’s enough indicate to us the types of films that will tend to be more successful.” And it didn't take long for the new venture to jump into the fray: Yesterday, MoviePass announced that it had picked up a heist flick called American Animals.
As a distributor, MoviePass can offer filmmakers something the deep-pocketed streamers often can’t or don’t: A commitment to the big-screen experience, and the potential to maximize the number of people who see it there. (Again: what's the risk, when a ticket is basically free?) This doesn't make MoviePass an altruistic patron of the arts, though; by investing in a movie at the beginning, the company can cash in when it eventually leaves theaters, grabbing a piece of the “downstream” revenue that comes from streaming and digital sales.
But studios and filmmakers aren’t the only partners MoviePass needs to win over to ensure its long-term viability. It needs the theaters on board as well. And to make that happen, it’s willing to play hardball.
Dramatic Measures
When MoviePass’s new plan launched last year, AMC made clear its disdain. The largest theater chain in the US instead described MoviePass as as an existential threat. “That price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” the company harrumphed.
And while AMC can’t block MoviePass from its theaters—those debit cards mean that customers are, for the purposes of AMC's bottom line, paying full price—the service’s long-term outlook depends at least in part on big chains sharing the wealth, in the form of, say, splitting concession stand revenue.
Lowe says independent exhibitors have been more responsive to such arrangements, and that he ultimately thinks MoviePass can survive without buy-in from AMC or Regal (neither of whom would comment for this story). But first, he’s prepared to make it as hard as possible for them to say no.
“The trick is signing up enough independents to where we can start to not show every show or every showtime or every movie at the top three chains,” says Lowe. “We’re spending millions and millions of dollars every week at those top three. 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.” In other words, if the big chains don't start cutting MoviePass in on concessions sales, MoviePass could cut them out of its app. At 1.5 million customers, that's not such a big deal. If and when it hits five million, the balance shifts. You've got a nice popcorn business; it'd be a shame if something happened to it.
“If they decide to say, essentially, that they don’t want our customers, then we’re going to drive our customers to our partner theaters," says Lowe.
'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.'
Mitch Lowe
In fact, MoviePass appears to have started that offensive already. On Thursday, customers began reporting that MoviePass cards no longer worked at select AMC theaters. It seems that the impasse stems not from AMC, but from MoviePass itself. In a statement first reported by Deadline, Lowe said: "We’re excited to keep working with theater chains that are closely aligned with our customer service values. As we continue to strive for mutually-beneficial relationships with theaters, the list of theaters we work with is subject to change."
In a statement Friday, Helios and Matheson CEO Ted Farnsworth confirmed that MoviePass had pulled out of 10 AMC theaters. He also claimed that the subscription service represents 62 percent of AMC's operating income, and argued that the theater chain should share concession revenue—or continue to lose potential business. "We already know in past testing that MoviePass subscribers are not theater-loyal," says Farnswroth. "They're happy to drive by a theater that may be closer to a theater that will accept MoviePass -because of the MoviePass value."
For its part, AMC responded to angry tweets with a boilerplate comment: "Some of our guests say MoviePass may be blocking the use of their service at a handful of AMC locations. AMC has not restricted MoviePass acceptance at our theatres, nor have we heard from MoviePass about this."
MoviePass subscribers likely won't appreciate being used as negotiation fodder. And it's too early to know how this particular gambit might play out; in fact, since the impacted theaters are all in major cities and command higher ticket prices, it may have more to do with trying to avoid losses than bringing AMC to the table. But unless AMC, Regal, and Cinemark work out a deal, expect less dramatic measures as well, like MoviePass demoting their showtimes in its app search results, or blocking them out altogether.
These are blunt tactics. But for Lowe, the MoviePass subscription model is just the first sledgehammer blow of a gut reno. He envisions certain films being exclusive to MoviePass members on their open weekends, and bringing the bingeing experience to the big screen. And why not live sports? And why not YouTube clips between films? US box office hit a three-year low in 2017, despite rising ticket prices. The system, Lowe argues, isn’t working. Why not try something new?
“The theaters’ excuse that they had a declining year, and that they blame it on content, is kind of an abdication of a good retailer to identify the change in what customers are interested in,” says Lowe.
And if that works, MoviePass envisions a future in which it partners not just with movie theaters and studios, but with restaurants and bars and ice cream shops and anyone else that might benefit from the subscriber data it amasses.
Then again, it's possible that none of this works. Or maybe it all does, but just not fast enough to catch up to all the money going out the door. But with some independent studio and theater deals already falling into place, and an ambitious roadmap for the future, at the very least MoviePass has shown that it’s more than just something for nothing—and it’s more than ready for its close-up.
No Biz Like Showbiz
Don't forget that the data MoviePass collects from all of those subscribers is what makes it all possible
Before MoviePass, Netflix had a pretty grand plan of its own—which has worked out pretty well so far
And if you're looking for even more disruption, check out the VR movie that sold for seven-figures at Sundance
Wired Magazine Story 01-26-2018
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