Theaters adopt their own type of MoviePass

MoviePass, the subscription movie ticket service, is struggling to stay afloat. But the payment model it has made popular appears to be here to stay.

AMC Theaters, the largest multiplex chain in the United States, began offering its own MoviePass-style service last week. For $20 a month, subscribers to AMC Stubs A-List can see up to three movies a week. Also last week, the Alamo Drafthouse chain said it would begin testing a service called Season Pass that would offer unlimited movies for one monthly price.

“We really like the subscription model,” said Tim League, CEO of Alamo Drafthouse, which operates in 10 states and has a theater in San Francisco. “But we want to get it right. It’s important to us to build a model that is sustainable for the long term.”

AMC also said that its service is sustainable — a not-so-subtle shot at MoviePass, which has 3 million members, most of whom pay $10 a month for the ability to see a movie a day. Many people in Hollywood and on Wall Street think that MoviePass will fail because it loses money on heavy users; Helios and Matheson Analytics, which owns MoviePass, has seen its publicly traded shares fall from $38.86 last year to 21 cents Tuesday.

Theater companies are racing to introduce subscriptions in part because Netflix, Spotify and Amazon Prime have trained people — Millennials, in particular — to expect entertainment to be served up that way. Finding new ways to fill seats is critical: Ticket sales in North America fell to a 25-year low last year, even as the population grew about 27 percent over that

period.

Here is a look at prominent movie ticket subscription offers: MoviePass: Still the dominant service, despite mounting questions about whether it can survive. It had more than 3 million paying members as of June 13. MoviePass executives aggressively insist that the company is viable and say membership could swell to roughly 5 million by January. Helios and Matheson said in a recent Securities and Exchange Commission filing that it hoped to raise $1.2 billion over three years to fund growth.

The goal is to quickly become the Incredible Hulk — and get too big to stop. At that point, MoviePass could make money by striking bulk ticket pricing partnerships with theaters; charging studios fees to promote new films to members; and perhaps even growing big enough (20 million subscribers is a goal) to demand a slice of concession revenue. MoviePass is also expected to charge subscribers more for peak viewing times and for access to Imax and 3-D screenings.

Under the MoviePass model, theaters are paid full price for every admission. People who sign up receive a membership card that works like a debit card. When members want to see a movie (no more than one a day), they use a MoviePass smartphone app to check in at the theater. The app instantly transfers the price of a ticket to the membership card. Members in turn use the card to pay for entry.

And it all works independently of theaters. AMC Stubs A-List: The MoviePass system functions in 91 percent of theaters, including the more than 8,200 movie screens operated by AMC in the United States. But it is clunky. While the new AMC subscription service may have an unwieldy name, it works without a special debit card and, unlike MoviePass, also allows all subscribers to reserve seats online.

The AMC version also includes access to Imax and other large-format theaters for no extra fee and allows members to see more than one movie a day.

Adam Aron, AMC’s chief executive officer, described the initial response to AMC Stubs A-List as “overwhelmingly positive” in a statement. (The grumbling was confined to studios, which fretted over their cut.) MoviePass said it is “thrilled that AMC has finally stepped up to embrace a model that we’ve known all along will be the future of our industry.” Movie Club: Cinemark, a chain that has 4,566 movie screens in 41 states, began offering this subscription in December. It is very basic: for $9 a month members can see one movie a month (no 3-D) and receive a 20 percent discount on concessions, among other perks. Unused tickets roll over and never expire for paying members. There is no debit card involved, and members can reserve seats online.

One standout aspect: It is relatively easy to reach live humans in Movie Club’s customer service department by phone.

Cinemark CEO Mark Zoradi told analysts on a conference call in May that Movie Club had 230,000 members. He said initial results indicated that subscriptions appeal “to the masses rather than just the most frequent valueseeking consumers.” (MoviePass has described Movie Club as “vapid.”) Alamo Season Pass: Still in the earliest stages. Alamo said its app would allow seat reservations and “unlimited movies,” but the company did not divulge pricing. Alamo will begin testing Season Pass in late July in Yonkers, N.Y. Theaters in other cities will follow, although how soon is unknown.

“We won’t really know until the actual testing begins, but we’re ready to get rolling,” League, the CEO of Alamo Drafthouse, said, adding that he sees subscription plans as one way for smaller films to thrive. “For films that people may not know a lot about, subscription lowers the barrier of entry — sure, why not check this out.” Sinemia: Started in 2015 in Turkey, this underthe-radar service bears the most similarity to MoviePass.

Sinemia operates independently of theaters and involves a two-step process, with members selecting movies with an app and paying for them with a special debit card. Sinemia recently made it easier to get started; members no longer have to wait for cards to arrive in the mail before using their plans.

Unlike MoviePass, however, Sinemia offers tiered pricing. For $16 a month, “elite” subscribers receive three tickets a month. “Classic” subscribers receive one ticket a month for $5. (Sinemia subscriptions are sold annually, so that an elite package will be billed at about $192.) Sinemia recently began offering various family plans, including one that allows a family of five to go to the movies three times a month for $75.

Rifat Oguz, Sinemia’s CEO, said in January that he hopes to have 2 million members within three years.