Video Transcript
Heather Mills: MoviePass is trying to get more people into theaters. If you haven’t heard of it, it’s a subscription-based service that has just slashed its price to $10 a month for basically all the movies you want. The nation’s largest theater chain though, AMC, now threatening to sue. The company says the new pricing is unsustainable and risk lowering the value of going to the movies. Okay, so let’s talk more about this crazy idea with our tech expert Ryan Eldridge of Nerds on Call. And Ryan, I have to be honest, when I heard about this, I had to take a closer look. I mean, I can see how many movies for the price of one ticket? How can MoviePass afford all of those tickets?
Ryan: Well, CEO Mike Lowe is making no…he’s not cutting any corners. He’s basically saying that this is unsustainable, that there’s no way they’re gonna be able to do this long term. And so, really, if we all like this idea, we all need to jump on it immediately. So, MoviePass is $9.95 a month and you can go to see any movie in 91% of U.S. theaters once every 24 hours. So you could see “Spider-Man” today, tomorrow you could go see “Thor” and the next day you could go see, you know, a romantic comedy. And so you could literally go 30 days in a row for $9.95 a month.
And this is really interesting because, unfortunately, the movie industry just reported, according to deadline.com, just reported a 25-year low in summer ticket sales. And this is kinda like disrupting the whole industry. For $9.95 being able to see as many movies as you want, that’s incredible. What most theaters have been doing is they’ve been slowly raising their prices adding on 3D, adding on bigger screens, all these special features, but frankly, movie sales are going down. They’re competing with Netflix, Hulu, piraters, I mean, all kinds of stuff, and so this is a brilliant move. And plus they’re getting tons of free PR.
Heather Mills: That is true. And right now, as you mentioned, when you talk about those numbers, they’re losing that battle. Honestly, Ryan, I can’t remember the last time I saw a movie for $10 bucks. I mean, here in San Francisco, you know, it’s $13, $14 or more. But does MoviePass actually have an agreement, a partnership, with theaters?
Ryan: Here’s the interesting thing about MoviePass, is the theaters actually get paid the exact same amount. What happens is you have to be within 100 yards of the theater in order to use it. You put a little app on your phone, you select the theater, and then the showing that you want, and then you have a little card that they send you in the mail that works, kind of, like, a debit card. And so when you select your movie, it sends that information to the card carrier, and then when you go in to pay for your movie, the theater chain is getting the exact same feed they would normally collect from you if you were paying cash. So, most theaters aren’t losing anything.
All that’s happening is MoviePass is just taking a bit of a loss to gain members. Now, in December of 2016, they only had 20,000 members, they’re expecting to add 100,000 members with this promotion. And they’re also saying that they may not offer this for a long-term, like, this is an experiment for them. But they’re guaranteeing anybody that signs up will get a guaranteed 12-month subscription. And it’s not a contract, so you don’t have to pay if you don’t use it. I think what they’re hoping for is, kind of, like, most of us who have Hulu, or Netflix, or something, we might consume a movie or two here and there but often we forget about it for once at a time, but they continue to collect the fees.
Heather Mills: Okay, so this offer may be short-lived. I guess, get in while the getting’s good. Thanks so much, Ryan Eldridge, always appreciate you talking to us.
Ryan: You’re welcome.
In the past half-decade, media consumption has undergone a drastic change. YouTube and Netflix have changed how, when, and where we watch television shows and movies. Essentially, we’ve traded in our cable subscriptions for streaming services. While Netflix is great for kicking back at home and binge-watching the shows you didn’t catch when they aired, some movies just beg to be experienced on the big screen. But taking in a flick at a movie theater has grown more and more expensive. From skyrocketing ticket prices to cringe-worthy concessions, it’s enough to get us looking for date night alternatives. Enter MoviePass.
Launched in 2011 by Netflix co-founder and former Redbox president Mitch Lowe, MoviePass lets you watch a movie a day – every day – in a theater near you.
Originally priced at $30/month, MoviePass had limited success.
In a push to drive membership, the monthly fee has recently been reduced to $9.95/month.
This lets you watch one standard movie in a theater every day. With 91% of theaters across the US being supported, you’re extremely likely to find a compatible theater in your area.
With ticket prices only going up, going to just two movies a month makes this service a win.
Is this service for real?
Let’s find out:
Rising Ticket Prices
The movie theater industry is struggling to handle competition from streaming services like Netflix and pirating services which let moviegoers skip the theater.
Yet, the response of theater chains has been to increase the cost of admission and concessions.
This has driven potential theater-going patrons to stay at home, driving the industry into financial turmoil.
MoviePass intends to cause disruption in this space.
As MoviePass CEO Lowe explains “After years of studying and analysis we found that people want to go to the movies more often, but the pricing keeps going up, and that prevents them from going more. We’re making it more affordable for people.”
When the announcement to lower subscription cost was made last Tuesday, there was a rush of new customers.
In fact, the rush of new customers caused the “find a theater near me” feature to crash.
How MoviePass Works
According to the MoviePass website, once you sign up for the service you’ll receive a physical card in the mail within 5-7 days.
Think of this as a debit card that you use to purchase your ticket at the box office.
Once you’ve received your card, install the MoviePass app on your mobile device.
Within the app, you’ll be able to see theaters (and the movies they are playing) within 100 yards of your current location. This means you can’t book tickets in advance.
You’ll have to arrive at the theater first and select the movie you want to see.
Only then will your MoviePass card be loaded with precisely the amount you need to purchase tickets.
This system ensures that the theater is paid the full price.
MoviePass currently works at most major chains including Cinemark, Regal, AMC, Century, and more.
What’s the catch?
The features sound too good to be true.
There’s no blackout dates or exclusions to watching new releases.
Furthermore, there’s no fixed contract. The $9.95 price is guaranteed for 12 months (for those that sign-up during this period), but you can cancel at any time.
So what’s the catch?
Here’s a list of limits on this service that could make it less appealing to certain moviegoers:
- The pass only works for standard 2D movies. You can’t use the pass for 3D or IMAX.
- Each pass is limited for to person. If you’re going to the theaters with your family, each of them will need a separate MoviePass subscription AND separate mobile device with which to procure tickets.
- You’re limited to one movie per 24 hours, so if you go to a show on Friday that starts at 8:00pm, you can’t go to another until after Saturday at 8:01pm. If you like to binge-watch at the theaters on weekends, you’ll find it hard to do so.
- You aren’t allowed to see the same movie more than once. At some point, you’re likely to run out of movies you want to see (though you can probably find at least 2 per month).
- While there are no blackout dates, you’ll have to drive yourself to the theaters to find out if tickets are available or if the show is sold out.
- As you can’t pre-purchase tickets, you’ll likely end up paying full price for that midnight showing of the hottest new release to confirm your spot.
MoviePass has stated that space to sign up for the program is limited, so the $9.95/month offer could go away (for new customers) at some point.
So what’s in it for MoviePass?
MoviePass will operate at a loss to establish a foothold in the market.
While monetization of your movie preference data is surely in the cards (which may cause some privacy-focused movie lovers to cringe), it’s unlikely that this alone will be enough to bring finances into the black.
Essentially, MoviePass is likely hoping you’ll stop using the service without cancelling your membership (much like a gym membership).
AMC theaters have announced their intent to stop accepting MoviePass cards.
In a statement also released last Tuesday, the theater chain indicated that it’s consulting with attorneys to determine how it can prevent MoviePass being used at its locations.
With MoviePass bringing more moviegoers out of their home and in the path of concession stands, it seems odd for AMC to be up in arms (especially when they are compensated in full for every ticket sold).
AMC said in a statement that pricing model is unsustainable and setting users up for disappointment “if or when the product can no longer be fulfilled.”
It’s likely that MoviePass plans to spend the next year gathering data about the number of people they get off the couch and into the theater – and up to the concession stand – so they can go back to the big movie chains and negotiate subsidized ticket sales.
AMC may be trying to thwart the venture before it gains traction and the power to push them into accepting a ticket subscription model.
Only time will tell how MoviePass fares.
In the meantime, if you’re eager to take advantage of the $9.95/month price, it’s worth a shot.
Be sure to let us know your experience and whether you love it or hate it.
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About The Author: Andrea Eldridge is CEO and co-founder of Nerds On Call, a computer repair company that specializes in on-site and online service for homes and businesses. Andrea is the writer of a weekly column, Nerd Chick Adventures in The Record Searchlight. She prepares TV segments for and appears regularly on CBS, CW and FOX on shows such as Good Day Sacramento, More Good Day Portland, and CBS 13 News, offering viewers technology and lifestyle tips. See Andrea in action at callnerds.com/andrea/.
