movie pass

Moviepass has rolled out a new subscription service that would allow moviegoers to see unlimited movies in month, limited to one per day. Local theaters have received some interest in the service.

published on September 11, 2017 - 8:52 AM
Written by Edward Smith

It seemed to be much ado about something when unveiled its new movie subscription service to the public last month.

Moviepass offers unlimited movies to customers at what they claim to be 90 percent of movie theaters across the country for less than $10.

News broke about the service across several media outlets and both
When news broke of the new service, the questions started coming at Maya Cinemas in Fresno and Sierra Vista Cinemas in Clovis.

Doug Her, general manager at Sierra Vista, reported dozens of people coming to ask about Moviepass.

Josh Randolph, house manager at Maya Cinemas, saw similar interest, though neither knew what to tell customers about it.

According to Randolph, who called Maya Cinemas corporate office, the theater had not even struck a deal with the company, so no one was sure if the product was supported. Neither was Her.

Mitch Lowe, the CEO at Movie Pass, explained that the subscription happens even without an agreement with the theater.

Customers get a debit card in the mail when they sign up for the service that corresponds with an app downloaded onto a phone. Once within a certain range, the app detects which theater the customer is going to. The ticket purchase is made like any other credit card purchase, so long as the theater accepts Mastercard, according to Lowe.

Customers can see one movie per day.

What many find remarkable about the subscription is the price point. Enough so that Helios and Matheson Analytics Inc. ventured a $25M investment in the company for 51 percent equity.

That money went to supporting the $9.95 subscription cost.

Within two days of the price release, according to Lowe, the company’s subscribers had leapt to more than 150,000, compared to 20,000 at the end of 2016.

“Over time, we will show we can increase the business of both theaters and studios,” Lowe said. “Then, at a certain point in time when we can prove we can drive incremental profits, we want to sit down with [the theaters] and see how we can get some small piece of that profit.”

The idea, according to Lowe, is to build the subscriber base first, then prove that the service works.

Lowe did studies to understand how price point affects subscriptions and interest in the product.

Before the $10 rate, the service tried to cater to those who saw in the range of 18 movies a year, but when Lowe came on, he thought there were other demographics worth tapping.

“What I found is that a much bigger group of people are the people who go 3 to 6 times a year but would like to go more if you could clear a few barriers to them going,” Lowe said.

In addition to price, one of those barriers is going to a bad movie.

“It’s worth a gamble if you’re not paying full price for it,” Randolph said. “You might sit there for 10 minutes and see if you like it.”

One of the other things that Lowe had to research was the way subscriptions work.

“In the first month or two, people go to a ton of movies,” Lowe said. “Then they settle back down to their normal behavior.”

That kind of gambling could cost a burgeoning business, however.

With the kind of investment that Moviepass got from Helios and Matheson, Lowe anticipates they could sustain up to 5 million subscribers in four years with a slightly higher subscription fee.

The local movie houses could see the same kind of boom without the risk.

“The more times you get people into the movies, the better it is for the movie theater business,” Randolph said. “Greater attendance means more people get to check out the theater and hang out with family and friends.”

According to Lowe, theaters that work out deals with Moviepass saw 400 percent increases in viewership and even 123 percent increases in concessions.

Lowe plans to eventually work out deals that might reciprocate the profits seen at the theaters back to Moviepass, but for the time being, the key is to get people to go to the movies.

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