posted 12-17-2014 03:54 PM                    

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We first told you about MoviePass — a subscription service that gives you access to a movie a day for a set monthly rate — more than three years ago. And while the service has managed to evolve and stick around, it hasn’t been able to convince the major theater chains to partner with it. But now MoviePass and AMC, the country’s second-largest theater operator, have announced a plan to test the service to see if people are willing to pay $35-45/month for regular trips to the cinema.
The NY Times reports that the tests will start out at AMC venues in Denver and Boston starting in January, with plans to roll it out to other markets.
Currently, MoviePass works in a somewhat awkward multistep process. You need to first get the MoviePass card, which is effectively a debit card. Then you use the service’s app to choose the film you want to see. MoviePass puts the appropriate ticket price on the card, which is then used to pay for the ticket at the box office or at a kiosk.
Since it is paying full price for tickets, MoviePass is banking on the idea that its users will regularly opt to skip the theater, letting their subscription go largely unused.
“Some overuse; a lot underuse,” the company’s CEO explains to the Times.
AMC is obviously hoping that enough people will be interested to get butts in seats — and more importantly to get those butts in line at the concession stand, where the theater stands to make most of its money.
MoviePass users are typically in that prime 18-34 age group that theaters want to attract, but who are increasingly realizing they can just wait to see a movie on their huge TV screens without having to plunk down a ton of cash at the theater. The company also claims that its users are big spenders at the concession stands.
So how often would you need to go to the theater to make a $35 subscription worth it?
The typical AMC ticket is now about $9.50, so a night at the movies for two people will cost you $19. Two movie dates in a month puts you at $38.
But MoviePass isn’t transferrable and you can’t reserve more than one ticket at a time using the app. So you would personally need to average a movie a week to see the value of one subscription.
During this time of year, when multiple Oscar-worthy title comes out on a weekly basis, that might be tempting. But think about the dog days of February through May, when theaters are full up with sequels to movies you never saw in the first place.

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LOS ANGELES — Netflix brought subscription-based movie and television streaming to the millennial masses. Spotify and Rhapsody did the same thing with music — pay once, listen to as much or as little as you want.

Now a major movie theater chain is trying to step onto the subscription gravy train as it seeks to reverse attendance declines, especially among young moviegoers. AMC Theaters, the No. 2 chain in North America behind Regal Entertainment, has agreed to a pilot partnership with MoviePass, a three-year-old company focused on letting people attend a movie a day for one monthly fee.

“It frankly wouldn’t be smart to ignore the success of subscription in other areas of media,” said Christina Sternberg, senior vice president for corporate strategy at AMC, which operates 4,959 movie screens.

In January, AMC theaters in Boston and Denver will begin working in concert with MoviePass to offer monthly subscription packages for $45 and $35. More cities will be added later. “The data will determine how fast we go,” Ms. Sternberg said. “Sometimes you first expand the test, sometimes you accelerate the deployment.”

MoviePass has tried to build a subscription service on its own since 2011, with limited success. The problem: Worried that embracing a subscription alternative will undermine traditional per-ticket pricing, the big chains — and some of their studio suppliers — have repeatedly swatted MoviePass to the side. AMC’s average ticket price increased 5.3 percent in the third quarter of this year, to $9.48.

But the musty exhibition industry is newly alarmed about a sharp drop in young ticket buyers. That audience has repeatedly turned up weekend after weekend, bingeing on high-margin soda, popcorn and candy in the process.

The Nielsen Company said last week that the moviegoing of Americans age 12 to 24 dropped 15 percent in the first nine months of 2014, compared with the same period a year earlier. Total attendance has declined about 5 percent so far this year compared with last, according to box-office analysts, because of fewer broad-appeal films and about a dozen more modest movies, like “Sex Tape” and “A Million Ways to Die in the West,” that missed the mark.

About 75 percent of MoviePass subscribers are 18 to 34, according to Stacy Spikes, the service’s chief executive and co-founder. “Millennials are consuming things differently, and that includes going to the movies,” Mr. Spikes said. He declined to say how many people currently subscribed to MoviePass. He noted, however, that MoviePass members tended to spend significantly more on concessions.

AMC, acquired two years ago by the Dalian Wanda Group of China for $2.6 billion, has emerged as a leader in challenging the exhibitor status quo. The multiplex operator, based in Leawood, Kan., has been aggressively updating its auditorium seats, rolling out enhanced sound systems and experimenting with marketing and ticketing.

Last month, for instance, AMC offered members of its rewards program, AMC Stubs, the chance to see “Interstellar” as many times as they wanted, for $19.99 to $34.99, depending on the viewing format. Now comes the MoviePass partnership. “The mandate at AMC is to break some eggs and make some omelets,” Mr. Spikes said.

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For MoviePass, it has been a battle to link arms with any exhibition company, much less a giant like AMC. MoviePass was first introduced in San Francisco during summer 2011, but the subscription service drew the ire of theater owners, in part because they felt it was trying to go around them.

“We thought we had communicated with the right people and we hadn’t,” said Mr. Spikes, whose entertainment career has included executive stints at Motown Records, Sony Music Entertainment and Miramax Films.

MoviePass regrouped and tried to move forward by teaming with a ticketing voucher company, Hollywood Movie Money. But that workaround was clunky. Among other hassles, MoviePass subscribers had to print out vouchers at home, then present them to theater ticket takers.

For the last two years or so, MoviePass has been using yet another multistep method. People who sign up now receive a membership card that functions like a debit card. When members want to see a movie, they use a MoviePass smartphone app to check in at the theater. The app instantly transfers money — the price of a ticket — to the membership card. Members in turn use the card to pay for entry. Monthly membership costs $30 to $35, depending on location. That price covers one movie a day in a standard format.

The pilot partnership with AMC will allow MoviePass members an option, for $45 a month, to see films in any format, including Imax and 3-D.

Under the MoviePass business model, theaters get paid full price for every admission. To make money, the service depends on traditional subscription-service economics: More people pay than go.

Mr. Spikes said that, based on his company’s experience so far with members, “Some overuse; a lot underuse.”

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posted 12-21-2014 12:55 AM                       

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Under the MoviePass business model, theaters get paid full price for every admission. To make money, the service depends on traditional subscription-service economics: More people pay than go.

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