MoviePass is no longer available at certain big-market AMC Theaters locations in the U.S. The popular subscription-based ticketing app partners with over 91 percent of theaters across the country to buy seats and then pass them on to their subscribers for a flat monthly fee. Although the idea of MoviePass is great for frequent moviegoers, who can see one flick per day (with some other stipulations) through the app, the company has still faced questions over its business model.
One of the most vocal, public critics of MoviePass is AMC Theaters. The chain criticized MoviePass over the summer in the wake of the app's significant subscription price decrease. Specifically, AMC worried that it would severely hurt their business if MoviePass users became the norm. And to be certain, theaters surely have valid reasons for why they wouldn't want MoviePass to become a huge success. But the latest company to cut ties is not the theaters, but the app itself.
As reported by Deadline on Thursday, MoviePass decided to pull its service from a handful of high-traffic theaters. The locations include the Empire 25 in New York City, AMC Century Plaza and AMC Universal CityWalk in Los Angeles, and AMC Loews Boston Common. AMC had already banned MoviePass E-ticket sales from a pair of locations in August. However, MoviePass still does big business with AMC, covering over $2 million in ticket sales per week, according to Deadline.
The news comes just a week after the app announced MoviePass Ventures, a new subsidiary that will co-distribute new films with partner companies. In reaction to the MoviePass outages, a number of Twitter users complained about the unexplained loss of the service at their local theaters. That forced CEO Mitch Lowe to issue the following statement to explain:
“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.”
Lowe doesn't explicitly detail why MoviePass pulled its service from the specific theaters affected. But his desire for an "accessible price-point" suggests that his business model isn't sustainable if he keeps buying more expensive tickets at certain high-demand theaters in big-market cities. And he definitely doesn't want to raise the monthly price now that he's picked up at least a half-million new subscribers with it. It's an interesting strategic move for MoviePass that should also satisfy the decision-makers at AMC who objected to the app in the first place.
Despite the nice subscriber boost, MoviePass may need millions more in order to make its business model more realistic for long-term success. Ultimately, MoviePass remains in the early stages of its new subscription price and still works with the vast majority of AMC Theaters.
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