Unlimited movie-theater deal could be too good to survive
Associated Press NEW YORK MoviePass is trying to bring to movie theaters what Netflix did for DVDs and online streaming: Let subscribers —watch as many movies as
they want for $10 a month.
In doing so, MoviePass price of the ticket. The U.S. has struck a chord with average is about $9, though moviegoers and a nerve $15 and up is common in big with the movie industry. cities, putting MoviePass in
For many people, going to the red with just one movie. the movies is worth it only a By contrast, MoviePass competitor few times a year. Ticket Sinemia offers just prices keep rising, and moviegoers two or three movies a month have plenty of for higher fees. cheaper alternatives, including Plus, with an unlimited Netflix. plan, MoviePass has to eat
MoviePass believes it can some unnecessary costs, get people to theaters more such as when a subscriber often. Major theater chains buys a ticket just to use the and movie studios aren’t so theater’s restroom. sure, putting MoviePass’ MoviePass’ parent company, business plan at risk. Helios and Matheson
Subscribers withAnalytics, warns in a financial MoviePass can watch a report that MoviePass’ movie a day, be it a splashy future is in “substantial blockbuster or an indie doubt” because it “has incurred movie contending for the Oscars. losses since its inception and has a present need
Though MoviePass works for additional funding.” at most theaters, it has key The service is ultimately restrictions: It excludes pricier counting on a “gym membership” 3-D and Imax showings effect: Subscribers and most advance online might binge at first, but slow sales. And even if everyone downonce the novelty wears in a group has a subscription, off. Although subscribers tickets must be purchased can cancel anytime, they individually. Subscribers wouldn’t be able to sign up also complain that again for another nine MoviePass responds too months to discourage shortterm slowly, or not at all, when memberships. there’s a problem. MoviePass wants to work
Nonetheless, the thrill of out ticket discounts and revenuethe bargain has sparked interest.sharing deals on the MoviePass said premise that it’s driving Thursday that it signed up a more people to theaters. The half-million subscribers in company is also eyeing a less than a month, bringing share of concession sales, the total to 2 million. saying moviegoers are more
“I’ve seen a little over a willing to buy popcorn and dozen movies, which is way soda when scoring a “free” more than what I would have movie. without it,” said Cassie Langdon, And MoviePass believes it a 28-year-old Indianapolis can help promote movies because woman who works in it knows what subscribers sports communications and see, when and joinedMoviePass in October. where. Promotions could
Langdon said she’s taking even extend to sending chances on smaller releases alerts to buy a soundtrack or instead of sticking with movie poster as subscribers blockbusters and their sequels. leave the theater. But several industry experts
Success could ultimately say MoviePass doesn’t bring MoviePass’ demise. add much to the marketing Although subscribers pay data from theater chains, online just $10 a month, or less with ticketing services and promotions, MoviePass is other sources. paying most theaters the full MoviePass will have leverage once it has “millions and millions of subscribers,” said MoviePass CEO Mitch Lowe, a Netflix co-founder who left while it was still a DVD-by-mail business.
To get well beyond the 2 million it already has, MoviePass needs to convince people that they really want to go to movies more often. In most cities, a subscriber needs to watch 13 movies a year to break even. In big cities, it’s eight.
“For someone like myself, who usually sees movies twice a year, it wasn’t something I would end up doing,” said Lisa Berey, a 40-year-old social worker in New York.
And consider that MoviePass’ original business plan didn’t work out. When the service cost $30 to $50 a month, it had just 20,000 hard-core movie fans. MoviePass slashed prices significantly in August to grow.
There’s apprehension that as moviegoers get accustomed to much cheaper prices, consumer anger might be redirected at theaters if MoviePass raises its prices, changes terms or goes out of business.
Adam Aron, CEO of the giant theater chain AMC, has called MoviePass’ price “unsustainable.” AMC initially threatened legal action, but seems to have backed off. The three theater chains that control roughly half of U.S. screens — AMC, Regal and Cinemark — say they’re happy to accept MoviePass’ money, but pooh-pooh any revenue-sharingdeals.
For their part, theater chains are making their own changes. Many theaters now have more comfortable seats and better food. And though still a novelty, some theaters have servers bring restaurant-style entrees and cocktails to seats, providing both the dinner and movie components of date night.