Why Movie Theaters Do Not Want MoviePass To Succeed


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AMC Entertainment are also the biggest theater operator in the world after making a deal with Chinese conglomerate the Dalian Wanda Group Co., and have discussed plans to acquire smaller American theater chains and negotiate for exclusives with movie studios. That could take the form of a premium video on demand deal where AMC costumers could rent movies a mere two or three weeks after their release for a fee of $25 - 50. Deals like this are predicated on the objective of increasing profit margins, which has been a tough task for theaters for a long time now. A MoviePass subscription service could theoretically operate alongside this, but it’s clear that AMC have no desire to do so. It’s easier, more cost effective and financially beneficial to keep all those deals in-house.

MoviePass have given little indication as to how long they can fund this kind of low-cost sign-up service, especially now that subscriber numbers are set to skyrocket. Their ultimate aim is to revive the notion of the regular moviegoer, someone who goes to the theater several times a month, as was the way of things before TVs were popular. Now, in the age of Netflix, Amazon and the increasing market for streaming services, theaters must compete with a more varied selection at a fraction of the price, so MoviePass are trying to even the playing field by lowering theirs. If their investors are okay to let their deep pockets get deeper for a few years, it could pay off marvellously for them, and having potentially millions of loyal subscribers to use as a foundation for bigger business deals would be something all aspects of the movie industry could support.

The problem is that too many are hesitant to buy into this fancy with so many questions left unanswered, one of the biggest being: How would MoviePass make money, and would the data they gather from sign-ups be used for undesirable purposes? Data firm Helius and Matheson Analytics were revealed to have paid $27m for a 51% stake in MoviePass, and Deadline reported that "we understand that MoviePass is absorbing the ticket discount and hoping to make up the discount through monetizing the data… and the breakage (from those consumers that do not use it to the full extent each month). The exhibitors get full price for their tickets and the studios get their usual film rent splits." The reliability of that method remains to be seen, and many users may not feel comfortable about relinquishing some of their privacy for unlimited movies.

It remains to be seen whether other theater chains will follow in AMC’s footsteps and exclude themselves from MoviePass’s plans. With profit margins tightening, attendance falling and Hollywood suffering under the strain, it seems that movie theaters may not be willing to risk buying into the dreams of MoviePass. The subscription service have offered their $10 a month deal for at least the next year, so audiences can enjoy that treat while they can. As for the industry, it’s in an increasingly bleak place right now, and the race to fix that will take more than a few free tickets.


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