HORROR SHOW
MoviePass $10 subs at 400K but AMC still sees a ...
Mitch Lowe has created a monster fit for the big screen.
The chief executive of MoviePass took a sleepy, little-known 20,000-member movie subscription service on Aug. 15 and injected pure adrenaline into its business plan.
Lowe cut the monthly, nocommitment membership fee to $9.95 — down from $40 to $50 — enabling movie buffs to gorge on as many flicks as their schedules could fit for less than a 10-spot.
In just three weeks, membership spiked to more than 400,000, Lowe told The Post in a recent interview.
“I thought it would have taken us more than six to eight months to get as many subscribers as we did in the first two days,” Lowe said.
The New York company tripled its payroll to keep up with demand and has fasttracked plans for an updated app. One is now due in early 2018 — around the time it plans to launch an IPO.
Under its business model, MoviePass pays theaters the full price of a ticket every time a subscriber sees a movie — so there is no immediate downside for chains like AMC Entertainment, Regal Entertainment or Cinemark.
But the price cut announcement had hardly hit peoples’ inboxes when pundits and industry insiders were measuring Lowe for a straitjacket.
The price cut, they argue, is doomed for failure, predicting that it will never hold and the company will soon be hemorrhaging cash.
Lowe, however, predicts that subscribers will catch just over a show a month despite their newly unfettered access to the cinema. Sub- scribers had been averaging 3.8 times a month when they were paying $40 a month and up, he said.
With the average price of a movie in the US costing $8.65 in 2016, MoviePass will break even if Lowe’s forecast holds. The privately held company, which is looking to take itself public as soon as January, does not yet report results.
As for profits, MoviePass will soon seek to sell partnerships to restaurants and other businesses hoping to attract sales from Lowe’s subscriber base.
The $10 strategy wasn’t without hiccups.
First, AMC, the country’s largest movie chain, came out strongly against the plan, calling MoviePass a “small fringe player” and claiming the cut rate is”not in the best interest of moviegoers.”
It turns out, AMC was likely in the middle of plans to roll out its own, higher-price subscription plan.
Still, Lowe has tried to make peace with AMC.
“I have attempted three times over the last two months to get in touch with AMC’s CEO, and he does not return my calls,” Lowe told The Post.
Regal and Cinemark have taken a wait-and-see ap- proach to the $10 plan.
“A subscription program is a plus for the industry,” said B. Riley & Co. analyst Eric Wold. “The exhibitors are getting paid full price for the MoviePass-goers. That customer is now walking into the theater with extra money in their pocket that they’ll presumably they’ll spend at the concession counter, which is a high margin for the exhibitors.”