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» Film-Tech Forum   » Operations   » Ground Level   » Let people to all the movies they want for the price of a single ticket (Page 1)

 
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Author Topic: Let people to all the movies they want for the price of a single ticket
Frank Cox
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 - posted 08-16-2017 05:13 PM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
$10-a-month pass that lets you go to the movies every day

quote:
As movie theaters struggle with tepid sales, Mitch Lowe has an extreme proposal for how to get more people into seats: Let them come to all the showings they want for about the price of a single ticket each month.

Lowe, an early Netflix Inc. executive who now runs a startup called MoviePass, plans to drop the price of the company’s movie ticket subscriptions on Tuesday to US$9.95. The fee will let customers get in to one showing every day at any theater in the U.S. that accepts debit cards. MoviePass will pay theaters the full price of each ticket used by subscribers, excluding 3D or Imax screens.

MoviePass could lose a lot of money subsidizing people’s movie habits. So the company also raised cash on Tuesday by selling a majority stake to Helios and Matheson Analytics Inc., a small, publicly traded data firm in New York. The companies declined to comment on terms of the financing but said MoviePass intends to hold an initial public offering by March. Helios and Metheson shares rose 5.7 percent to US$2.95 at the close Tuesday in New York.

Ted Farnsworth, chief executive officer at Helios and Matheson, said the goal is to amass a large base of customers and collect data on viewing behaviors. That information could then be used to eventually target advertisements or other marketing materials to subscribers. “It’s no different than Facebook or Google,” Farnsworth said. “The more we understand our fans, the more we can target them.”

Theater operators should certainly welcome any effort to increase sales. The top four cinema operators, led by AMC Entertainment Holdings Inc., lost US$1.3 billion in market value early this month after a disappointing summer. The number of tickets sold in the U.S. and Canada last year declined slightly, while box office revenue rose just 2 percent thanks to pricier tickets, according to the Motion Picture Association of America, a trade group. The cost of a ticket has almost doubled in the last two decades, according to the website Box Office Mojo. The average price is about US$8.89 this year, though it can be much higher in some cities. Shares of theater companies fell Tuesday on concerns that MoviePass’s pricing would hurt studios or exhibitors. AMC’s stock declined 2.6 percent to US$13.25 at the close. Investors may be misinterpreting the MoviePass business model, Eric Wold, an analyst at B Riley & Co. wrote in a note to clients. If MoviePass can drive more people to theaters that would benefit the exhibitors, although the overall impact is “more negligible than anything,” Wold wrote.

MoviePass was founded in 2011, originally with a business model similar to a gym membership. The company hoped to turn profit from subscribers who paid US$30 or more per month but didn’t use the service often enough to justify the cost. Lowe, a fixture of the home video business who helped get Netflix off the ground and served as president of rental-kiosk operator Redbox, was named CEO last year. The privately held company declined to disclose subscriber numbers or financial information. Lowe said the data-based business model is still “years in the future.”

With the new strategy, MoviePass hopes to resolve what Lowe sees as the biggest factor to blame for the theater industry’s decline. He said the high price of tickets, not competition from Netflix or Amazon.com Inc.’s Prime Video service, is a big part of what’s keeping people away. “People really do want to go more often,” Lowe said. “They just don’t like the transaction.”

First I've heard of this thing. It looks like a no-lose deal for the theatres if this outfit actually pays full price for the tickets, though.

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Martin McCaffery
Film God

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 - posted 08-16-2017 05:29 PM      Profile for Martin McCaffery   Author's Homepage   Email Martin McCaffery   Send New Private Message       Edit/Delete Post 
At least AMC thinks it is too good to be true...

quote:

AMC Theatres is threatening legal action against MoviePass, a subscription based service for cinema-goers.

In a statement, the world’s largest exhibitor dismissed MoviePass as “a small fringe player” and said that its model “is not in the best interest of moviegoers, movie theatres and movie studios.”

On Tuesday, MoviePass announced that had sold a majority stake to Helios and Matheson Analytics Inc., a publicly traded data firm, for an undisclosed price. It said it was using the capital injection to fund an overhaul to its pricing model. It will now enable customers to see movie a day in a theater for a $9.95 monthly fee, far less than the cost of a ticket in many major markets.

MoviePass re-sells the tickets to customers. It claims it boosts attendance by 111% and that its customers buy more concessions. But exhibitors have preferred to bolster their own loyalty programs instead of aligning themselves with the service, with AMC investing heavily in its Stubs rewards program.

In the statement AMC said it is consulting with its attorneys to determine if or how it can prevent a subscription program offered by MoviePass from being used at its locations.

“MoviePass envisions paying AMC its full ticket price without discount,” the company’s statement reads. “The AMC average ticket price for watching a movie at AMC Theatres in the most recent financial quarter was $9.33. From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month.”

In an interview on Tuesday morning, MoviePass CEO Mitch Lowe acknowledged that his company was subsidizing ticket buyers. He argued that it will be able to prove its value to movie theaters and studios, and that in the future they will cut the company in on their additional profits.

“We’re hoping that if we can drive a meaningful increase in attendance we can share in that success,” said Lowe.

AMC does not sound like it wants to endorse MoviePass’s ambitions.

In the statement it said, “that it is not yet known how to turn lead into gold,” adding, “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.”

The company said that reducing pricing to accommodate the MoviePass model would negatively impact the customer experience and would leave them unable to “operate quality theatres” and will have a chilling effect on the creative community by cutting them out of the income they receive from movie theaters.

“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,’ the company’s statement reads.

[URL=http://variety.com/2017/film/news/amc-moviepass-1202528974/
]Variety[/URL]

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Scott Norwood
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 - posted 08-16-2017 06:14 PM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
I don't understand the objection. The concept seems like a good idea to me for all sides (with the possible exception of Movie Pass--the economics make no sense for them). Why would AMC not want more people to go to the movies?

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Travis Cape
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 - posted 08-16-2017 06:22 PM      Profile for Travis Cape   Email Travis Cape   Send New Private Message       Edit/Delete Post 
I am thinking that AMC senses that MovePass is looking for a future cut from exhibitors to sustain their flawed business plan.

I also shudder to think of every movie theater becoming more of a trailer park experience with the low dollar crowd. Around here, there's a noticeable difference in the behavior and appearance of the crowd between the cheapest matinee and the later shows.

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Dennis Benjamin
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 - posted 08-16-2017 08:13 PM      Profile for Dennis Benjamin   Author's Homepage   Email Dennis Benjamin   Send New Private Message       Edit/Delete Post 
They need to invest in better servers. I went on their website today and it crashed several times.
Additionally, clicking around to see what theatre locations accept movie pass was impossible. I'd have to sign up just to see what theatres are listed. Every time I went to sign up, the server crashed.

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Alexandre Pereira
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From: Toronto, Ontario, Canada
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 - posted 08-16-2017 08:42 PM      Profile for Alexandre Pereira   Author's Homepage   Email Alexandre Pereira   Send New Private Message       Edit/Delete Post 
Race to the bottom. Just like netflix et al. The crowd that comes on cheap tickets do not buy anything at the candybar. But the point is why would anyone want to run a business as a death spiral? Certainly Starbucks is not doing that?...Yet legions of nitwits keep buying their expensive drinks. Price is NEVER a motivator - lack of attendance at the show is only due to one thing - the movies are not good.

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Kevin Fairchild
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 - posted 08-16-2017 09:03 PM      Profile for Kevin Fairchild   Email Kevin Fairchild   Send New Private Message       Edit/Delete Post 
Studios: We want to shorten windows.
AMC: Sure thing.

MoviePass: We want to get more people into your theater.
AMC: Nooooo way!

I'd much rather experiment with MoviePass vs shorter windows.

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Frank Cox
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From: Melville Saskatchewan Canada
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 - posted 08-16-2017 10:22 PM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
quote: Dennis Benjamin
clicking around to see what theatre locations accept movie pass was impossible.
Apparently all of them:

quote:
The fee will let customers get in to one showing every day at any theater in the U.S. that accepts debit cards.
It sounds like subscribers get some kind of a special debit card and just use that when they go to the show. The chap selling the tickets may not have to know or care if it's a regular sale or a subscription redemption.

quote: Travis Cape
there's a noticeable difference in the behavior and appearance of the crowd between the cheapest matinee and the later shows.
The fix for that is called properly supervising the auditorium.

Behave, or leave. I don't see that as being an exceptional policy, or is it?

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Rick Cohen
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 - posted 08-16-2017 11:14 PM      Profile for Rick Cohen   Author's Homepage   Email Rick Cohen   Send New Private Message       Edit/Delete Post 
Frank,

Behave or leave won't work with this business model. They will just come back tomorrow, for free, because they can.

There will also be people in the theatre business who will figure out a way to "game" the system, by having people use their daily free admission without actually watching a movie, or even being on the premises. If there's a way to cheat the system, people will find it.

I do not see any way that this could be a sustainable business model for MoviePass, and it will end up damaging the exhibition industry in the long run, long atfer MoviePass goes belly-up.

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Frank Cox
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From: Melville Saskatchewan Canada
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 - posted 08-16-2017 11:25 PM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
quote: Rick Cohen
Behave or leave won't work with this business model. They will just come back tomorrow, for free, because they can.
And get told to beat it before they get past the front door. At least that's what would happen here in the case of an "egregious" offender.

On the rare occasion that I kick someone out for misbehaviour I'll usually let him in again the next time he wants to come to a show.

There are five or six people over the years who I've told to never come back here again and if they do show up I'll just tell them to leave again.

I suppose it goes both ways; I can remember two or three of those folks telling me that if I throw them out they'll never come back again as well.

quote:
I do not see any way that this could be a sustainable business model for MoviePass,
I agree with that.

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Lyle Romer
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 - posted 08-16-2017 11:37 PM      Profile for Lyle Romer   Email Lyle Romer   Send New Private Message       Edit/Delete Post 
I think the reason AMC is against it is because, when this business model fails (which it has to), people will have gotten used to a ridiculously cheap price. They won't want to go back to paying full price again.

It's basically how Redbox killed the video rental market. Except, in Redbox's case, the business model was able to work for them.

Subsidizing movie tickets to make them where you could end up paying $1 per movie to see things in a theatre is not sustainable. Anybody who invests in this company is a moron and deserves to lose every dime.

It's like the old joke of losing money on every product you sell but "making it up with volume!"

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Steve Guttag
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 - posted 08-17-2017 07:24 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Most things that sound too good to be true, are. We are in a multi-billion dollar industry. For this thing to work, it has to be financially sound. If they are taking a loss up front, they HAVE to make it up somewhere. So data will have to be sold on its customers (fine, that is their problem if they choose the service) but they also fully intend to back-end this with the theatres. And, just like with credit cards, they intend to charge theatres fees. And if the exhibitor doesn't pay those fees, then they will lose their customers. It wouldn't surprise me if they could also regulate YOUR ticket price by saying, Movie Pass will only pay "X-amount" regardless of what you want. Don't like, it lose your customers and we'll flag you as a non-participant. Sure they won't do it up front, they'll wait until a significant amount of moviegoers are subscribers that are used to Netflix type $10/month rates. And that is the goal isn't it? 1st run or streaming, the price is $10/month (or whatever inflation drives it to).

I see this thing as turning very evil.

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Monte L Fullmer
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 - posted 08-17-2017 07:55 PM      Profile for Monte L Fullmer   Email Monte L Fullmer   Send New Private Message       Edit/Delete Post 
Issue that really draws the red flag is that patrons may just want to see a free movie, and that's it....and bypass the concession area.

Down would go the concession revenue, which is our life's blood to keep the doors open.

We're, along with another plex are not accepting MoviePass cards...

-Monte

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Travis Cape
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 - posted 08-17-2017 08:09 PM      Profile for Travis Cape   Email Travis Cape   Send New Private Message       Edit/Delete Post 
Frank,

I love your thoughts about how to deal with behavior problems. In reality, the bad people that cause trouble have already upset you and other nice customers before you can eject them.

Some areas are worse than others for behavioral issues. Going cheaper on admission only invites customers that I would rather not see. I've had some of these problems here. We raised our ticket prices and the majority of the problems went elsewhere.

Some people really should stay home.

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Jack Ondracek
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 - posted 08-17-2017 08:54 PM      Profile for Jack Ondracek   Author's Homepage   Email Jack Ondracek   Send New Private Message       Edit/Delete Post 
quote:

quote: Dennis Benjamin
clicking around to see what theatre locations accept movie pass was impossible.
Apparently all of them:

quote:
The fee will let customers get in to one showing every day at any theater in the U.S. that accepts debit cards.
It sounds like subscribers get some kind of a special debit card and just use that when they go to the show. The chap selling the tickets may not have to know or care if it's a regular sale or a subscription redemption.

quote: Travis Cape
there's a noticeable difference in the behavior and appearance of the crowd between the cheapest matinee and the later shows.
The fix for that is called properly supervising the auditorium.

Behave, or leave. I don't see that as being an exceptional policy, or is it?

MoviePass assumes 91% participation, because they buy tickets the same way anyone else would. Yes. Members get a MasterCard-enabled "gift" card, into which MoviePass will deposit the price of your ticket. This way, it acts like a regular credit card so, if you take plastic at your theatre, you're assumed to be "participating".

The flaw in this is that MoviePass is scrounging around for someone else's money in order to fund the difference between subscription income and what goes out. The idea that they'll "seed" larger attendance by short-term losses, only to ask for a piece of the "additional profits" seems like a deceptive way to generate false income.

Basically, those "extra profits" were a transfer of outside money into the theatres' revenue stream. MoviePass will simply insert themselves into the theatres' "trough", while offering nothing tangible in return.

It'll be interesting to see what happens when they ask the studios for a piece of their "additional profits".

Seems like something that's destined for a loud, noisy crash... but you never know about this world these days.

Oh... on behavior... My experienced prediction is this would signal the end of most decent theatres. As a whole, the respect people tend to show the places they patronize roughly compares to what they have invested in the experience. From my days, running a theatre with $5 carload admits, I can tell you I would never, ever go back to a deeply-discounted model, just to attract more bodies. With a few exceptions, they behave badly, toss garbage everywhere, buy very little concessions, abuse the staff and trash the bathrooms. I paid more money per-capita, cleaning up and repairing after that field than I ever made from the "increased patronage".

Tossing them out doesn't work. They didn't pay you much so they didn't lose much. A subscription-based admission will further separate the payment from the admission. In many of their minds, they're getting in free, so what if they do get tossed? Fully utilized, the net cost to the customer can be as low as 33 cents per day... likely much less than the cost of gas to get to the theatre. So... no big deal, right?

As a rule, how many dollar houses did you ever see that were well-equipped, maintained, staffed and appointed? All the ones I saw around here, when we had them, became so trashed and dangerous, even the bikers eventually left.

No, thanks.

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