MoviePass Lowers Movie Subscription to $6.95 a Month
It’s not about the money; it’s about the data, says CEO.
MoviePass, a company that offers movie ticket subscriptions, has lowered its prices for the holidays, according to Cheddar. Now for $6.95 a month, film buffs can go to the movie theater once a day, 365 days a year. Testing other business models, MoviePass previously used tiered subscription pricing, and most recently went to a $9.95 a month plan to attract ardent movie goers. In a recent interview with Cheddar, Ted Farnsworth, CEO of Helios and Matheson, the majority owner of MoviePass as of August 2017, explained that it isn’t about the money though; it is about the data.
“We’re probably the only company out there that understands every move you make, what movies you go see, what movies you want to see, what you like, what theater you’re going to, what time of the day,’ said Farnsworth in an interview with Cheddar. ‘We have all that data, so we’re doing deals right now with the studios in Hollywood that want to understand that data, so that’s really where you make your money, on the data side of it.’
In addition to leveraging consumer data with movie makers and advertisers, Farnsworth said the company is working on partnerships with Uber and Lyft for movie night promotions.
A visit to the MoviePass website does not reflect the change in holiday pricing, however.
The MoviePass website shows that the movie subscription service is valid in over 4,000 theaters across the U.S. on more than 36,000 screens, including AMC Theatres, AMC Loews, Cinemark Movies and Regal Cinemas, among others. According to Business Insider, following the August price change, MoviePass has about 600,000 subscribers.
In a related story, Business Insider reports that MoviePass is offering a ‘limited time one-year subscription plan’ for $89.95, which works out to about $7.50 per month, including a $6.55 processing fee, when paid annually. This is a 25 percent discount off the previous plan, priced at just under $10 a month. Box Office Mojo reports that the average movie ticket price in 2017 is $8.93, so the new, lower fee is less than the average cost of a movie ticket in the U.S.
This sounds like a great deal for consumers, but theater companies aren’t necessarily happy. In fact, on August 15, AMC Theatres released a statement about MoviePass, calling it a ‘small fringe player’ in the reselling of movie tickets which it said ‘is not in the best interest of moviegoers, movie theatres and movie studios.’
Here’s an excerpt from that statement:
‘Bloomberg today called it a ‘crazy plan.’ AMC noted that it is not yet known how to turn lead into gold. AMC believes that holding out to consumers that first run movies can be watched in theatres at great quantities for a monthly price of $9.95 isn’t doing moviegoers any favors. In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled.
AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theatres nor will it produce enough income to provide film makers with sufficient incentive to make great new movies. Therefore, AMC will not be able to offer discounts to MoviePass in the future, which seems to be among their aims.
While AMC is not opposed to subscription programs generally, the one envisioned by MoviePass is not one AMC can embrace. We are actively working now to determine whether it may be feasible to opt out and not participate in this shaky and unsustainable program.’
This is a difficult situation. Consumers are getting a great deal, and if MoviePass is, indeed, paying theaters full price for tickets – even though MoviePass is making below retail value – the model seems unsustainable from the company’s point of view. We aren’t sure we understand AMC Theatres’ objection though. If they are getting paid full price per ticket, they shouldn’t care how MoviePass is making that happen.
From a subscription company standpoint, MoviePass doesn’t seem to have it all figured out yet. This is at least their third iteration of a subscription plan, and the new pricing isn’t reflected on their website yet, though several news outlets are reporting the discounted pricing. MoviePass is also saying publicly they are making money on the data, but are they disclosing that up front to their customers?
We always encourage transparency for all subscription companies, and we hope that MoviePass is being clear with subscribers about how they can and will use subscriber data and under what conditions, if any, they may sell that data and adjust pricing. In theory, we love the idea of MoviePass. In practice, we aren’t so sure.