MoviePass adds 1 million subscribers

Mr Dan Lanini, buying cinema tickets at a kiosk in Florida, subscribes to MoviePass, which gives cinemagoers the chance to go to the movies 365 times a year for US$9.95 (S$13.30) a month.
Mr Dan Lanini, buying cinema tickets at a kiosk in Florida, subscribes to MoviePass, which gives cinemagoers the chance to go to the movies 365 times a year for US$9.95 (S$13.30) a month.PHOTO: NYTIMES

LOS ANGELES • Even as analysts are predicting a 4 per cent decline in North American cinema attendance this year, taking ticket sales to a 22-year low, theatre owners are still holding out against MoviePass that carries a promise of reversing that statistic.

Mr Mitch Lowe, a Netflix co-founder, took over that ticketing firm last year.

By August this year, when MoviePass introduced a subscription-based plan - go to the movies 365 times a year for US$9.95 (S$13.30) a month - he had been declared an enemy of the state.

"Not welcome here," AMC Entertainment, the largest multiplex operator in North America, said in an indignant August news statement.

It may be time to get on board.

MoviePass said this month that it had signed up more than a million subscribers in just four months.

It took Netflix more than three years to reach that level when it started selling low-priced subscriptions for DVD rentals in 1999.

"We're actually shocked," Mr Lowe said. "We seem to have hit a nerve in America."

He and Mr Ted Farnsworth, chief executive of Helios and Matheson Analytics, which bought a controlling stake in MoviePass in August for US$27 million, celebrated the milestone by cheekily posing for photos at an AMC theatre in Times Square.

Under the MoviePass business model, theatres get paid full price for every admission. People who sign up receive a membership card that functions like a debit card.

The blistering growth has prompted new criticism from theatre and studio owners - namely that MoviePass will never be able to make money by charging US$9.95 a month when a single ticket can cost almost twice that.

They added that that will cause MoviePass to either raise prices or go out of business, disappointing audiences and, ultimately, hurting the fragile multiplex business.

Mr Lowe, who previously sparred with studios as president of Redbox, a kiosk company that rents DVDs for US$1 a day, believes that ticketing can at least be a break-even business for MoviePass.

The real treasure in this venture, he contends, is the trove of data about consumer tastes and habits that MoviePass can collect. It hopes to sell that data to studio marketers.

During the last decade, theatres have spent billions of dollars to enhance the movie-going experience.

Improvements include the ability to reserve seats online, reclining seats, bigger screens and better sound and projection systems.

But the business has remained more or less the same for decades - sell ticket, serve popcorn, show movie - even as nearly every other area of media (television, music, publishing) has been forced to reinvent itself to counter digital rivals.

According to the National Association of Theatre Owners, tickets cost an average of US$8.93. But theatres in cities such as New York, Los Angeles and San Francisco charge as much as US$16.50.

So far, none of the major studios has signed on as MoviePass clients.

The big theatre chains have also held their ground, though AMC recently softened its stance a bit.

"We appreciate their business," Mr Adam Aron, its chief executive, said. But he added: "AMC has absolutely no intention of sharing any of our admissions revenue or our concessions revenue."

Regal, the No. 2 multiplex chain, has said it will take a "wait and see" approach.

Cinemark, the third-largest exhibitor, introduced its own subscription service early this month. For US$8.99 a month, members can see one movie a month.

But one small theatre company has seen it fit to become a MoviePass investor.

Studio Movie Grill, which has 30 locations in nine states, credits the service with increasing attendance, especially on weeknights.

"I know it's getting a bad reputation in some circles, but we love MoviePass," said Mr Brian Schultz, Studio Movie Grill's chief executive.

"Some people aren't sure they want to pay US$10 to US$12 to see a movie like Lady Bird (2017 comedy-drama that stars Laurie Metcalf). MoviePass takes out that hurdle."

NYTIMES

A version of this article appeared in the print edition of The Straits Times on December 30, 2017, with the headline 'MoviePass adds 1 million subscribers'. Print Edition | Subscribe