A movie a day keeps boredom at bay

What would be your initial reaction if I told you that you could watch any 2D movie you wanted for only $10 a month? Doesn’t that sounds too good to be true? In fact, it’s quite possible! You may have already heard, but Moviepass, a company that has been in business for a few years already, has been upending the movie industry since they recently and drastically lowered their monthly subscription costs following a majority stake purchase from Helios and Matheson Analytics, hereafter abbreviated as HMNY. The way this service works is through a debit card and app combo:

  1. Sign up for Moviepass
  2. Receive your Moviepass-branded debit card
  3. Download the Moviepass app
  4. Check in to your theatre when you’re within 100m of it
  5. Use your Moviepass card to pay for your ticket when you’re at the register/kiosk

I’ve used this service to see 16 movies since September, making it one the best value purchases I’ve ever made. Each time you check in, your debit card is automatically loaded with the price of a 2D ticket at the theatre you’ve selected. You then get the ticket for free, and HMNY foots the bill. How is this possible, you may ask? The game plan of HMNY is to draw out enough previously-uninterested moviegoers to warrant a stake in movie theatre profits. In addition, the company expects to sell your movie watching data, and offer you deals at nearby stores and restaurants in the future.

Although I’m cautiously optimistic about the long-term viability of this company, I think it has, at the very least, started a discussion about whether or not the movie theatre industry should fall in line with more modern offerings by providing a subscription solution to better cater to the latest generation of consumers who have all grown accustomed to monthly pricing vs. a-la-carte ones. We no longer think of paying for a individual song or movie when we stream one, we have monthly/yearly gym memberships, and we have already become habituated with paying for cars and houses with monthly payments. Why not pay monthly rates to theatres to watch as many movies as we would like?

AMC has been a vocal critic of the service, claiming it devalues the moviegoing experience by training consumers to value the price of admission at a rate much lower than what is currently offered by chains. I believe this is a false statement in that Moviepass converts non-attendees to regular theatre-goers again. I’ve heard countless times during my highschool and college years that going to the theatre is either too expensive or not worth the showings currently playing. With Moviepass, these statements no longer apply. By eliminating the risk of attending a potentially-bad showing, more people are headed to the theatres than ever before, increasing ticket sales and concession revenues for theatres by a yet-undisclosed amount. For those in the theatre business, it seems their argument is more a result of stubbornness towards change than one of substantive evidence. I acknowledge the risk of training consumers to become accustomed to a particular price point. But what if this service is also drawing out attendees that would otherwise ignore the theatre completely?

A number of statistics have shown that ticket sales have been declining since the turn of the century. An increasing number of outlets for boredom such as the proliferation of mobile devices and the amount of engagement on the Internet have been effective draws from traditional entertainment such as TV and movies. In light of this phenomenon, it would seem that struggling industries must reinvent themselves by offering new value propositions to combat the tide of new age entertainment they are hemorrhaging business to.

While the movie business can be tricky and filled with fees, legalese, and pricing competition that can easily eat away at theatre profits, I think this is all the more reason for companies such as Moviepass and AMC to team up against mutual threats to survival such as film distribution companies. Without theatres to distribute to, film companies would be forced to either become non-viable or distribute on alternate platforms that would further devalue their products such as Netflix or Amazon Video. By keeping first-releases in theatres first, they stand to gain more than if they were to distribute to consumers directly or through other middlemen. Thus, I believe it would be in the best interests of film distribution companies to thoroughly and candidly examine their business model in order to bargain with chains and middlemen to accommodate monthly pricing options. Moviepass has shown there is a market for monthly movie rates. Now, we only need a response from those higher up on the supply chain.

12 comments

  1. I just recently heard about Moviepass and I think it’s a smart idea. It reminds me of something called class pass where gym-goers can sign up for a service that allows them to go to group exercise classes at gyms without buying a gym membership. It definitely has seen success so I think Moviepass will too. The thing about these two companies is that it targets people who want an experience without the commitment. For people who like exercise classes or the movie theater experience, it works well. For me, I don’t think I go to the movies enough to use the Moviepass service, but then again I think if I had it that would change things. I’ll be interested to see how this company grows and how much movie theaters will begin to accept it.

  2. One of my best friends has been using movie pass since September like you and really swears by it. I’ve been really close to signing up for the service because going to the movies is one of my favorite things, but haven’t been able to pull the trigger yet. I was a little bit worried about how sustainable the service is going to be. The reason I didn’t think it would work is because I thought the profits from the industry came from the tickets themselves however the biggest margins come the concessions, so I think if they can keep those prices high and customers purchase those, they’ll be in good shape. Finally, I think if customers think they are seeing movies for free they will be more likely to spend money on the concessions, once again, keeping everything afloat. Great piece!

  3. A great post. I have not heard about Moviepass before, and it sounds like something that targets customers like myself who is not willing to spend about $15 for a 2 hours of watching movie at a theatre. I think this speaks to the classic debate of price vs. volume. Moviepass lowers price significantly but most certainly brings volume up with the attractive price point. In addition, if you think about it, the subscription fee of $10/mo ensures a constant cash stream of $120/year per person, with a lot more people using the theatres more frequently. I am only speaking from my own experience, but I have not seen anyone going out to watch a movie at a theatre more than once or twice every month (unless you have a date or something). Also, if a certain movie does not necessarily interest people, it barely gets any seats. As a result, this actually sounds like an idea that will help theatre business rise again by encouraging people to go out to theatres more often. I will be their user soon!

  4. Like our classmates have already mentioned, everyone that I know that uses MoviePass has nothing but great things to say about it. I guess, what is there to complain about? As long as you see at least one movie a month, you get your money’s worth of the subscription. However, I completely agree with you point about long term viability. This is something has has been in the news especially in the last couple of weeks. T

    Aside from long term liability, one issue I see with MoviePass is the likelihood that big players (such as AMC, etc.) will create the own version of the service. While these might not be as popular at first, as I couldn’t imagine they could fully compete with MoviePass’s low pricing, I believe in a heartbeat they’ll have the ability to outlast MoviePass. This subscription model, too, would attract Millennials to the box office and cuts out the middleman, MoviePass, leading to higher margins. Great post!!

  5. My biggest hurdle when it comes tot subscribing to Movie pass is the fact that I might be the only one of my friends to have it. The idea behind Movie pass is amazing, however if I am the only person out of group of friends who paying for this service then I will be the only personal that feels inclined to use it. Recently, I have wanted to go see A Quiet Place with my friends partially because I hear it’s a great film and partially because I have a free movie ticket that has been burning a hole in my pocket. My friends however refuse to go because they can not overcome the $15 price tag that comes with seeing a movie. I believe this same logic applies here because (like if I was to pay for Movie pass) I have a prepaid ticket and therefore feel more inlined to use it. If movie pass can grow at a substantial rate within the next few years I feel this hurdle (being their largest one) will be overcome quickly.

  6. Really cool post! I think its interesting that AMC complained because as some of our classmates mentioned, so much of the profit comes from concessions that movie theaters could really probably afford to sell their tickets for less anyways. I think this service will help the movie theaters because I have been to so many movies where the theater is super empty. One thing that has kept me from getting movie pass is the fact that we don’t have a theater very close to bc. I could go into the city but then the time commitment and paying for the T and everything would make the pass less worth it for me at this time. I feel as though it makes a lot of sense if you live close to a movie theater. It kind of surprised me that in one of the comments someone mentioned that the service was 120$ a year. When putting this way, I definitely wouldn’t buy it because I wouldn’t want to spend over 100 on movies in a year. It is really smart advertising on their part to market it as 10 a month, which seems much more reasonable, like a single ticket price. I wonder if this will catch on, as I don’t know many friends who have the pass, though it may not be targeted to college-age people. I wonder who their target demographic is. Great post!

  7. Cool post! I have heard of ClassPass but never MoviePass. I imagine this type of subscription service may be a trend that will affect lots of industries. I agree that there is a new trend towards not wanting to commit to things, and this type of service is riding that wave. I know in ClassPass the studio gets paid by ClassPass, so I wonder if this decreases the backlash from the studios. Maybe MoviePass could look into something like that? I also find it interesting that MoviePass relates to movie theater tickets seeing, as you noted, ticket sales have been declining as there are other, more convenient alternatives. I think on the surface this makes it an unattractive industry, so I admire MoviePass for entering it in an innovative way that works to alter the industry. I think it is a cool lesson of the ability for technology, the app, to disrupt a struggling industry.

  8. Nice post. It’s a similar model as classpass for fitness class, which experienced some of the same challenges that this company is facing. The blog could have been improved with some images.

  9. @mikecarillo111made a good point about the concessions; they are the profit making centers of the theater business just as alcohol is the profit generators for a great deal of sit down restaurants. Because of this, getting people in the door is currently the most pressing challenge for theaters and Moviepass is contributing to this cause in a way that not only fills otherwise unused seats but also reaches otherwise unwilling customers. I see this as a win win and that theaters should be clamoring to partner with Moviepass. My guess would be that the major stumbling block is being able to integrate the infrastructure for the system, especially at older theaters with fewer movie options to choose from. Only time will tell if concessions sales drop as people are able to see movies at a lower price point.

  10. One thing I did hear about Moviepass was that there were a lot of technical flaws – not loading, not syncing with a theater within 100 ft, not showing the ticket so you are stuck at the counter unable to enter. I’m curious if those barriers are being worked through.

    I agree with your thoughts on teaming up with AMC – doesn’t it just bring more people in their doors than before? And certainly, they might bring friends who would purchase regularly priced tickets, and exorbitantly priced concessions as some mentioned before. Seems like a branded AMC partnership could be beneficial!

  11. I really like the idea of MoviePass. That’s super cool. I heard from my friend about it and I’m ready for movie prices to drop once again. It’s such an experience to go to the Movies and watch films the way they were designed to be watched. I do think that although the Tech might not be there as @murphycobc mentioned, I think that this is something that could be easily improved. Location tracking and the ease of use of an app definitely increases over the life of the product process. I think MoviePass might be sustainable if people start to realize that prices could be so affordable for the movies and once again get back into the swing of going.

  12. I personally owned a movie pass. Yet I somehow overestimate my frequency of cinema visiting once I got the movie pass. The frequency drops after I got my movie pass. The rules of movie pass sometime become restrictions. You have to be 100 yard within the cinema area, so that means you need to either live near the theatre or pay an extra visit to get a ticket. It limits you to see imax movies. For popular movies like infinity war, it is hard to use movie pass because everyone is getting it at websites like fandango in advance. I think it is a smart move, but I am interested to see if there are users like me who kinda got stuck with it. The future remains to be seen

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