MoviePass and MoviePass Films are pivoting to a new business strategy to refocus business model on reliable revenue it generates in-house and that is not dependent on revenues from studios or exhibitors. According to an announcement on Wednesday, MoviePass will expand its reach by focusing on technological innovation and high-quality content through the MoviePass movie subscription program; MoviePass Films, MoviePass’s own production company; and Moviefone, a MoviePass-owned multimedia information and advertising service.

“By spending the last several months analyzing the many different aspects of our prior business model, in terms of what worked and what didn’t, I believe we’ve been able to illuminate the path forward,” said Ted Farnsworth, CEO of MoviePass parent Helios and Matheson Analytics. “We’ve taken a deep dive to understand our unique ecosystem and I believe we’re now ready to move forward at a rapid pace. I see this as an exciting time for MoviePass and its sister companies, because we’re taking our original vision for subscription, altering it for the better, and proceeding with significant clarity.”

In the announcement, MoviePass offered the following highlights of their new strategic vision:

– New model relies on own revenue generation, not that of studios or exhibitors to accelerate growth in the U.S.

– The new model will increase revenue per MoviePass subscriber, enhance subscriber satisfaction and improve customer retention.

– The MoviePass subscription service and MoviePass Films will serve as complementary vehicles for attracting new audiences, while Moviefone will support both.

– The three arms of the MoviePass organization will be more integrated than they have been in the past, sharing resources.

– MoviePass Films will optimize its platform to accelerate content production for theatrical releases and expand in-home video sales and retail, transactional and international sales.

– Technology development is a key piece of the strategy to prevent violations of the company’s terms of use.

“We have gained a tremendous amount of insight into moviegoers and the industry over this past year and a half. MoviePass subscription, MoviePass Films and Moviefone now have a winning combination that we believe will drive consumers to our films, and re-energize casual moviegoers to go more often and see great films in local theaters – films that consumers often wait to see much later through streaming services,” said Mitch Lowe, MoviePass CEO.

Co-CEO Randall Emmet of MoviePass Films also commented on the new strategic vision: “We always believed in the MoviePass value proposition for filmmakers. Now, after witnessing how MoviePass subscribers can positively impact box office results of our own movies, I must say the opportunity of this partnership is bigger than I ever thought it would be. At the end of the day, we believe we will be getting people back in movie theater seats, this time to the benefit of our companies and the MoviePass™ community of casual moviegoers. That’s exciting and certainly a game-changer.”

The news of MoviePasss’ new business strategy comes just after AMC Theatres and Cinemark reported their fourth quarter and full year 2018 results. AMC Entertainment Holdings had a banner year, reversing a $487.2 million loss in 2017 to net earnings of $110.1 million in 2018, and exceeding all company expectations with its Stubs A-List movie subscription program, which now has more than 700,000 subscribers. 

Cinemark had a good fourth quarter and full year 2018 too. The company had record fourth quarter revenues of $798.5 million, a 6.5 increase over the fourth quarter of 2017. They also got great results with their Movie Club membership program which grew 26 percent between the third and fourth quarters of 2018, finishing the year with 560,000 members.

Insider Take:

A pivot in strategy – if that’s what this really is – is a long time in coming, but it doesn’t feel like a dramatic change. It’s just a new way of saying the same thing. We believe that MoviePass took a good, hard look at what had gone right and wrong over the last few years, but is this the answer? With so many bad decisions and equally ugly results, including a loss of subscribers, it is hard to imagine this “new” business strategy is the cure all for what ails MoviePass.