Eric Ravenscraft
MoviePass’s $9.95 per month subscription lets you visit any movie theater in the country as often as once per day. Well, almost any theater. The company recently announced that it’s dropping support for some of the most popular AMC theaters. This is a worrying trend, but MoviePass might still be a good deal if you weren’t relying on one of those affected theaters.
MoviePass CEO Mitch Lowe acknowledged the change and offered something resembling an apology, but with no real explanation for why this change occurred. Until recently, despite AMC’s protests, MoviePass still supported the theater chain. There was no way for AMC to block MoviePass, since users simply buy tickets with a branded MasterCard. The choice to drop support for certain AMC locations must come from MoviePass, but it’s unclear why. Lowe’s statement doesn’t shed much light on the situation:
“As of today, you’ll find a small handful of theaters are no longer available on our platform. 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. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values.
As we continue to strive for mutually-beneficial relationships with theaters, the list of theaters we work with is subject to change. We advise customers to always double check the MoviePass app for the most up-to-date list of participating theaters.”
It’s possible that this is just another round of corporate hard-ball. Maybe MoviePass conceded to drop some of AMC’s highest trafficked (and most expensive) theaters in an attempt to build goodwill with the theater chain. Or perhaps MoviePass is sending a warning shot, showing AMC how much extra revenue its customers bring in. We might never know, but we also shouldn’t have to care. Customers shouldn’t have to keep up with the business drama of the companies they buy from in order to get the best deal. For now, though, MoviePass users should check their app before heading out to the theater to make sure their nearby locations are still supported.
As annoying as this is, it seems MoviePass is only dropping a few locations, and they’re all limited to AMC. Regal, Cinemark, and other smaller chains are still supported. In many places in the country, MoviePass’s monthly price of $9.95 is still cheaper than even a single movie ticket, so if you’re the type to see a lot of movies in the theater (or want to be), the service is still a great deal. As we’ve known since the beginning, though, that deal may dissolve or change any time. Thankfully, MoviePass doesn’t require a commitment, so you can cancel your plan whenever you want. So, you may as well ride out the deal as long as possible, until such time as it’s not worth it anymore.
Update: MoviePass has reached out with an additional statement from Ted Farnsworth, Chairman and CEO of MoviePass’s parent company Helios and Matheson. According to Farnsworth, only ten AMC theaters were removed from the service, which accounts for less than 2% of AMC’s theaters. However, the only reason given for this change is that AMC has been uncooperative since the company dropped the price for its subscription. Farnsworth also lists a lot of statistics in an attempt to prove MoviePass offers value to AMC, lending credence to the theory this is more of a warning shot than an attempt to smooth over relations with AMC.
When HMNY acquired the majority stake in MoviePass, we made the strategic decision to reduce monthly subscription fees to $9.95 a month to get movie fans back into the theaters. As we’ve grown our subscriber base, we’ve seen a dramatic increase in movie theater attendance among our subscribers, which proves to us that MoviePass is working to revitalize a declining industry. Other theater companies have seen this attendance resurgence and have approached MoviePass to collaborate. Since the get-go, AMC has not been interested in collaborating with MoviePass – a move that is not in the interest of our subscribers and AMC theater-goers.
We know that we currently represent approximately 62% of AMC’s operating income, assuming that AMC is flat year over year. This equates to $34.4 million of gross profits to AMC in the upcoming quarter. On an annualized run rate basis, that’s over $135 million to AMC’s gross profits – which doesn’t include concession sales from MoviePass subscribers. In publicly disclosed 2017 financial documents, AMC claimed each customer spends $4.88 on concessions each visit – meaning MoviePass subscribers could bring an additional $17.1 million in AMC concession revenues for Q1 of 2018, which on an annual run rate means $68.4 million more — an annualized run rate going forward of over $203.4 million revenue from MoviePass subscribers.
We’ve pulled 10 AMC theaters — less than 2% of theaters. We already know in past testing that MoviePass subscribers are not theater-loyal; they’re happy to drive by a theater that may be closer to a theater that will accept MoviePass -because of the MoviePass value.
From day one, MoviePass has been 100% for our subscribers – they are the most loyal fans we’ve ever seen and we’re honored to remove a price barrier than had been preventing the average movie-lover from going to the movies. We’re here for them and will fight battle for them every day of the week.
Source: Deadline
