A subscription service heralded as the “Netflix for movie theaters” is being launched nationally this week. For $25 to $40 per month—exact price depends on location—members are allowed to see one 2D movie daily at any theater that accepts credit cards. Subscribers reserve and pay for their seats via MoviePass’s new smartphone app, and then pick up their tickets in the theater.
When MoviePass first launched in beta last summer, there were problems. Major theater chains like AMC weren’t given advanced notice that the service was being introduced, and movie industry players, including studios, theater chains, and ticket sellers like Fandango not only weren’t partners, they viewed MoviePass largely as a threat and reacted to the upstart in fairly hostile ways. Also, the cost of MoviePass—$50 per month in the San Francisco area—was deemed too pricey by many moviegoers.
On Tuesday, MoviePass announced its subscription service was launching nationally, although for now it is only available to an invite-only group that includes current members and nearly 75,000 people around the country on its waiting list. While MoviePass states that members can use the service at “any theater of their choice that accepts major credit cards,” major studios and theater chains still aren’t on board. An AMC Theater spokesperson released this simple, cold, straightforward statement to The Hollywood Reporter:
“AMC has no affiliation with MoviePass, and we’ve had no discussions with the company about participation.”
The way MoviePass works, however, an affiliation with theaters and studios does not seem necessary. Once at a theater, a member checks in using the MoviePass iPhone app (Android version coming soon). You select a movie and showtime, and pay with your affiliated MoviePass card (the monthly subscription covers the charge). Inside the theater, you use your MoviePass card to pick up your ticket. As Venture Beat explains, the transaction does not require the theater to have reached any previous agreement with MoviePass:
To the theater, it looks like you’re paying with a normal credit card, which means MoviePass will work at any cinema that accepts credit card payments.
Pricing has been tweaked with the latest incarnation of MoviePass as well. Subscriptions start as low as $24.99 and go up to $39.99 per month, with a national average of $29.99 monthly. Naturally, prices vary depending on location, with higher rates charged in metropolitan areas where the going rate for a movie ticket is more expensive.
Is MoviePass a good value? That depends, of course, on how often you go to the movies. Considering the cost of movie tickets, the break-even point is probably around three or so movies per month. If you go to the movies once a week like clockwork and you’re accustomed to paying full (not matinee) price, then sure, this looks like a deal. But considering that the majority of Americans say they rarely or never go to the movies, the subscription isn’t for everybody. Think about it: The average subscription costs $360 annually. So figure you’d have to see around 40 movies, give or take, per year to justify the cost. Are there really 40 new movies released each year that you think are worth seeing?
Once you’ve paid for a MoviePass subscription, the bar is lowered considerably for what you consider a “worthy” movie. MoviePass claims that 93% of seats at movie theaters go unsold, and that in its tests, 64% of members increased their moviegoing after subscribing, and they increased concession purchases by 123%. It’s data like this that MoviePass is presenting to theaters and studios to make the case its service will help, rather than hurt, the industry. (Data like this also points out that subscribers will probably wind up spending a lot more than $360 annually on their moviegoing habit, thanks to concession purchases.)
“MoviePass gives moviegoers the opportunity to see the movies they want, at the theaters they want — perfect for film enthusiasts who are at the heart of Hollywood’s economic engine,” said Stacy Spikes, CEO and cofounder of MoviePass, via press release. “Moviegoers now have more at-home entertainment options than ever before, and MoviePass is dedicated to driving traffic back to theaters and reducing the friction of moviegoing.”
MoviePass is not the only product aiming to boost movie attendance by discounting ticket prices. DealFlicks, for example, an Oakland, Calif.-based startup, launched last April with an opaque Hotwire-Priceline type model: The customer agrees to a ticket price that’s 40% to 60% off retail, but only finds out the exact theater and showtime after a nonrefundable payment has been collected.
While these and other discounting models would seem to be popular with consumers, theaters and studios thus far have been extremely reluctant to undermine their pricing strategies. After a poor year in movie attendance last year, the consensus “solution” to get the business back on its feet wasn’t to cut prices, nor to, you know, make better movies that more people want to see. It was raising ticket prices.