MoviePass blocks access to some AMC theaters
Subscription service is at odds with the nation’s largest theater chain
Movie-going subscription platform MoviePass has stepped up a feud with the nation’s largest theater chain by abruptly cutting off subscribers’ access to some of AMC’s most popular theaters, including one in the Bay Area.
Its $9.95-a-month subscription plan allows 1.5 million MoviePass subscribers to see a movie a day in any of a variety of theater chains and indie cinemas.
But on Thursday, MoviePass ended subscribers’ access to 10 AMC locations, said Ted Farnsworth, CEO of Helios and Matheson, in a statement. Helios and Matheson owns a majority stake in MoviePass and was a catalyst for its new subscription plan.
Affected theaters include the AMC Mercado 20 in Santa Clara and some of the largest cinemas in New York City, Los Angeles, Boston and Chicago.
“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,” said MoviePass CEO Mitch Lowe in a statement Thursday. “Many exhibitors have been receptive to this mission. As we continue to strive for mutually beneficial relationships with theaters, the list of theaters we work with is subject to change.”
As MoviePass has quickly grown in popularity, increasing attendance at
many theaters across the nation, the company appears to be betting it can strong-arm AMC into discounting the tickets MoviePass buys from the theater chain on behalf of its subscribers. AMC has stridently resisted any such suggestions, though other movie theater operators have reportedly cut deals, according to a Deadline article.
Lowe told this news organization in an interview on Tuesday that AMC and MoviePass were working together, as the latter purchases more than $1 million of AMC movie tickets a week for its subscribers.
“I’m sure AMC is thrilled,” said Lowe. “They are reporting a 6 percent drop in attendance last year. We are their only bright spot.”
MoviePass did not completely sever its relationship with AMC, however. Its move Thursday blocks
its customers from accessing less than 2 percent of the chain’s theaters, according to Farnsworth. He also argued that MoviePass subscribers generated more than $200 million in revenue for AMC in tickets and concessions.
AMC responded Friday afternoon, disputing Farnsworth’s figures.
“AMC has taken no action to block the acceptance of MoviePass at our theatres,” said AMC spokesperson Ryan Noonan. “We have no further comment about MoviePass’s unilateral actions. We are, however, disappointed that MoviePass continues to make false statements about AMC, including today when MoviePass greatly exaggerated its contributions to AMC’s profitability.”
AMC and MoviePass’s acrimonious relationship started in August when the New York-based MoviePass rolled out its monthly subscription model. AMC expressed its displeasure with MoviePass and called it a “small fringe player.”
“In AMC’s view, 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,” said AMC.
Lowe told this news organization that MoviePass was responsible for 3.5 percent of all total U.S. box office ticket sales in 2017.
MoviePass subscribers in the Bay Area were divided on MoviePass’s move against AMC — but did not consider that to be enough for them to cancel their subscriptions. With a bevy of independent local movie theaters still supporting MoviePass, they said losing one theater in Santa Clara was not a big dent in their user experience.
“I have loyalty to more local non-chain theaters,” said Ashley Villanueva, 26, who lives in Berkeley and recently subscribed to MoviePass. “AMC doesn’t affect my decision. I definitely don’t have loyalty to AMC.”
Farnsworth echoed the same idea that customers are loyal to a good deal, not to a certain theater.
“We already know in past testing that MoviePass subscribers are not theater-loyal,” said Farnsworth. “They’re happy to drive by a theater that may be closer to a theater that will accept MoviePass.”
However, analysts and consumers alike wondered how MoviePass can keep running in the long term — and whether MoviePass’s strong-arm tactic will pan out. An analysis from New York-based investment banking firm Maxim Group said MoviePass had only seven more months of cash on hand to finance its purchases.
“As a consumer product, it’s a compelling product,” said Mike Goodman, director of digital media strategies at Strategy Analytics. “But I don’t see if (MoviePass) has enough leverage over AMC to be able to bring them to the table. It doesn’t make any sense to me why AMC would even consider that.”