For the avid movie-goers, a handy app has just became handier. Movie Pass, the theater subscription service, drastically lowered the subscription price to $9.95 a month on August 15 2017.
The subscription allows for users to see one movie a day at any participating theater and is accepted at over 91 percent of theaters nationwide. The movie has to be a standard 2-D movie, as the movie pass doesn’t support special screenings, such as 3-D or I-max showings. The other restriction for movie pass is that the subscriber can’t watch the same movie more than once. The pass is only meant for an individual user, who is 18 years and older, and not for couples or families.
Nevertheless, simply paying $9.95 a month to watch a movie a day is steal. Ever since the beginnings of the service in 2011, the price of subscription fluctuated. The price went from $14.95 to nearly $50, according to Variety, and the price is at an all-time low at $9.95 a month. The day of the reduction, the amount of website visitors increased drastically from an average of 10,000 users a week to 500,000 unique users within 6 hours of the announcement of the price cut, according to Screen Rant.
The subscription service operates via phone connected to the movie pass card, which essentially functions as debit card. The service works as the subscriber uses the app on their phone to select a desired movie and a desired show time at a desired theater. The card is loaded with the necessary cash to buy a single adult ticket and the user must pay for the ticket using the card within 30 minutes. Essentially, Movie Pass pays the full price of the ticket every time the card is used to buy the tickets.
Prior to the price cut, when the subscription price was originally $50, the company could make profits with some subscribers who didn’t frequent movie theaters, such as subscribers who visit a movie theater less than four times a month. However, with the price cuts, if a subscriber watches at least two movies a month, the company suffers a loss. Therefore, the low subscription price has baffled a lot of people, as this business model does not seem profitable.
However, this business model comes after Movie Pass sold majority stake to a big-data collection firm, Helios and Matheson Analytics, for $27 million, according to Variety. Therefore, Movie Pass is receiving a large cash infusion and, although it may seem unlikely, both companies seem to benefit from this deal.
The CEO of Movie Pass, Mitch Lowe, who is also co-founder of Netflix, said the movies pass goal is to make it easier for film fans and causal movie-goers to see movies in theaters and to make it more affordable and enjoyable for subscribers, hence the drastic price drop. Along with that, Lowe talked about movie pass being able to change the way consumer think.
“Today’s acquisition by Helios and Matheson is a huge step towards making our vision a reality by allowing us to introduce a new $9.95 nationwide subscription service that completely disrupts the movie industry in the same way that Netflix and Redbox have done in the years pass,” Lowe added in the press release.
Movie pass also allows subscribers to see a wide range of films they would not normally see. According to the Hollywood Reporter, the company gives subscribers the chance to see lower budget movies and also plans to use the app to promote smaller films, as 10 to 17 percent of subscribers see the movie due to marketing, benefitting the film industry as a whole.
Helios and Matheson also benefits by fulfilling their company’s mission to continuously innovate, as CEO Ted Farnsworth said in the press release. Farnsworth also said that the goal is to collect data from an assortment of people, which can then be used to target advertisement and to help in marketing strategies to subscribers, as Bloomberg reported.
“It’s no different than Facebook or Google,” Farnsworth told Bloomberg. “The more we understand our fans, the more we can target them.”
Regardless of the motivations behind the subscription price decrease of Movie Pass, there will surely be an increase in attendance to movie theaters. In fact, a 2016 independent report by Mather Economics found that Movie Pass members showed a 100 percent increase in move going and a 123 percent increase in concession revenues. Yes, Movie Pass helps to revenue for concession stand as well, which is a 80 percent profit margins for theaters, as Lowe told the Hollywood Reporter. The price decrease will possibly increase the number of subscribers and increase the rate of movie attendance tremendously, which would do wonders for theaters as the attendance is relatively low. In fact, Bloomberg reported that top four theater chains, including AMC theaters, had lost a total of $ 1.3 billion in market value in the earlier in the month of August due to decreasing ticket sales.
Despite the increase in movie attendance, there are major theater chains that are opposing the new movie plan subscription cost. According to Business Wire, AMC spoke to lawyers days after the price drop, stating that the model is not sustainable gives audiences an unrealistic expectation of the price for movies. Theaters are concerned that movie-goers will still expect low prices for movies even after Move Pass is no longer able to operate.
Despite AMC’s concerns, Movie Pass is still able to function with the chain because, as Lowe said, the Movie Pass is essentially a MasterCard debit card. So long as AMC accepts MasterCard, they can’t block the Movie Pass reported Business Insider.
Movie Pass has caused a lot of buzz in the past week and will surely continue to be a revolutionary game changer in the film industry in the months to come.
