MoviePass is changing the value of the movie theater experience(theverge.com)
theverge.com
MoviePass is changing the value of the movie theater experience
https://www.theverge.com/2017/12/15/16781208/moviepass-hollywood-film-subscription-service-amc-terrified
49 comments
Theaters don't have a problem with it. This is an advertisement for MoviePass disguised as an article.
http://www.paulgraham.com/submarine.html
http://www.paulgraham.com/submarine.html
I personally watch out for the submarine around every corner. But did we read the same article? Its specifically talking about the pain theaters will feel after moviepass inevitably collapses and people don’t want to go back to paying full price.
Sounds like a really bad puff piece.
Sounds like a really bad puff piece.
I thought you need to legally disclose it in the article if you're paying for the exposure.
You don't always pay for these articles. Lots of the time press outlets are looking for stories, and PR firms know this. They send a few emails, maybe even give "press releases" that are super close to being an already finished article. The press outlets are cool with this because it helps them get more stories and thus more advertising dollars.
Possibly, but PG's submarines do not directly pay the outlet. Instead, a contact at the hired PR agency contacts some newspapers reporter and gives them something that could be news. Of course, the reporter wants to publish interesting articles, and they trust the PR agency contact, so very likely they will publish some article about that.
> I don't understand why theaters would have a problem with this...
For a big city theater, there are always customers. But take a more rural cinema, have 60% of the moviegoer population base convert to MoviePass... for the theater, it may see a slight uptick because it isn't that expensive for the users and the cinema still gets the full ticket price. Then imagine MoviePass closing shop - are the 60%, hooked to 10$ or whatever a month while generating twice that in ticket sales, going to come back once MoviePass isn't around any more? There will be a sharp noticeable drop, and this is what scares theater managers. Hell even if it's just 100 people using MoviePass that's $2k in ticket sales a month (given 10$/ticket and 2 movies a month per person), and another $2k a month in sales from soda, popcorn, food and merch.
Especially as outfitting/retrofitting a theater with the newest advancements in dozens-channel audio, 8K 3D digital projections, the newest anti-piracy crap the studios force upon the managers and other stuff is a huge upfront capital investment... I would be scared shitless if I had to do such an upgrade because the customers demand it but I knew at the same time that a lot of the customer base might simply drop off at once due to circumstances way outside of my control.
For a big city theater, there are always customers. But take a more rural cinema, have 60% of the moviegoer population base convert to MoviePass... for the theater, it may see a slight uptick because it isn't that expensive for the users and the cinema still gets the full ticket price. Then imagine MoviePass closing shop - are the 60%, hooked to 10$ or whatever a month while generating twice that in ticket sales, going to come back once MoviePass isn't around any more? There will be a sharp noticeable drop, and this is what scares theater managers. Hell even if it's just 100 people using MoviePass that's $2k in ticket sales a month (given 10$/ticket and 2 movies a month per person), and another $2k a month in sales from soda, popcorn, food and merch.
Especially as outfitting/retrofitting a theater with the newest advancements in dozens-channel audio, 8K 3D digital projections, the newest anti-piracy crap the studios force upon the managers and other stuff is a huge upfront capital investment... I would be scared shitless if I had to do such an upgrade because the customers demand it but I knew at the same time that a lot of the customer base might simply drop off at once due to circumstances way outside of my control.
On the other hand, people who normally don't go to the movies (such as myself, haven't been to a movie since I was a teen, with the exception of taking the stepkids a handful of times about 15 years ago) suddenly find that they really like the experience. And before MoviePass goes away, they will most likely gradually increase their prices, until former non-theatergoers get used to a monthly must-have entertainment expenditure.
If I had to come up with a reason (with no industry knowledge), I'd posit the following:
If MoviePass captures the ticket-buying market in a big way and becomes the gatekeeper for consumer movie-going money, they could feasibly develop direct relationships with distribution companies in the film industry and drastically diminish whatever power theater operators currently have.
As noted by others, there's a common belief theater profit comes largely from concessions. That defines their relationship with the consumer. MoviePass threatens their relationships on the other side, with the film industry, where we are the profitable product.
That's my guess.
If MoviePass captures the ticket-buying market in a big way and becomes the gatekeeper for consumer movie-going money, they could feasibly develop direct relationships with distribution companies in the film industry and drastically diminish whatever power theater operators currently have.
As noted by others, there's a common belief theater profit comes largely from concessions. That defines their relationship with the consumer. MoviePass threatens their relationships on the other side, with the film industry, where we are the profitable product.
That's my guess.
Basically, MoviePass' existence means that the current $12 price may not last, whether it be because MoviePass will control so much volume that they'll demand a discount, or because if MoviePass goes belly up, then the users who have been conditioned to "pay less per movie" than the face value will now go to the movies less than pre-MoviePass times.
If the consumer no longer pays $12, or fewer consumers are willing to pay $12, there will be some kind of reckoning higher up the chain between the theaters and the film companies in splitting up the decreased topline revenue.
If the consumer no longer pays $12, or fewer consumers are willing to pay $12, there will be some kind of reckoning higher up the chain between the theaters and the film companies in splitting up the decreased topline revenue.
They get a minority of the ticket price, but it's far from 'no margin'.
Typically in the first week they keep anywhere from 0-25%, but after the first week or two they can be keeping as much as half.
MoviePass is going to be squeezing them for their share.
Typically in the first week they keep anywhere from 0-25%, but after the first week or two they can be keeping as much as half.
MoviePass is going to be squeezing them for their share.
In addition, AMC was rumored to be planning on rolling out a similar plan with a price roughly double that of MoviePass. The benefit of MP is that there is no chain lock-in.
Most theatres are not at all scared of MoviePass, they're getting paid the full admission price. In fact many chains and independent operators love it, and are looking at implementing their own version.
> because theaters have all decided on a ticket price customers must pay for the premium of that big screen and sound system.
Not really, no. Studios are the ones driving up movie prices since they keep demanding a bigger and bigger cut. The new Star Wars film for example has the highest royalty of any movie ever released.
> because theaters have all decided on a ticket price customers must pay for the premium of that big screen and sound system.
Not really, no. Studios are the ones driving up movie prices since they keep demanding a bigger and bigger cut. The new Star Wars film for example has the highest royalty of any movie ever released.
I imagine theaters see more bodies == more filled seats == more revenue $. That seems to hold true especially given that Moviepass pays regular-price for tickets.
Moviepass’ success is dependent on the same thing as any subscription model like this. Article author seems unable to recognize that he is a top 1% (maybe even rarer) user of Moviepass and the majority of subscribers will see 1 or sometimes fewer movies per month.
Moviepass’ success is dependent on the same thing as any subscription model like this. Article author seems unable to recognize that he is a top 1% (maybe even rarer) user of Moviepass and the majority of subscribers will see 1 or sometimes fewer movies per month.
Cinemark announced theirs the other day. 10 bucks a month but you only get one movie and some discounts. Not a great deal but that’s the only way I can see it being sustainable long term.
That is not true. Star wars is an exception and the cut percentage increased by 1%. The real reason is the dropping viewership. Number of tickets sold peaked in 2012. Beyond that the number of movie tickets sold dropped, however number of locations is up and salaries have gone up. To compensate for it, movie ticket prices need to go up.
This reads like an advert to me. “Cinemas are terrified of this!” is a good sales pitch.
Studios take the bulk of the ticket price, and MoviePass is paying the full price of the ticket. Theater chains make the bulk of their profit on refreshments, so I don't think they're all that terrified.
MoviePass has to grow large enough to be able to negotiate deals with studios, like Disney, or raise rates significantly to cover the true cost of the service. If they raise rates too much, they could start hemorrhaging to the individual theater chain programs.
It's a cool service, but it can't last like it is.
MoviePass has to grow large enough to be able to negotiate deals with studios, like Disney, or raise rates significantly to cover the true cost of the service. If they raise rates too much, they could start hemorrhaging to the individual theater chain programs.
It's a cool service, but it can't last like it is.
I'm glad you mentioned theater revenue. When I worked in a theater, my manager would tell me they saw less than 5 cents per ticket on most movies, maybe a little more for independent films.
The $2.85 small bag of popcorn cost less than a penny in raw material to make. We made minimum wage with no overtime (theaters got a tax loophole back then; not sure if they still do) so even factoring in labor and electricity, it's still a huge profit margin.
Theaters chain execs love it I'm sure. Still even if/when MoviePass goes under, the studios will probably take a small hit for a while, but I'm sure they'll recover.
The $2.85 small bag of popcorn cost less than a penny in raw material to make. We made minimum wage with no overtime (theaters got a tax loophole back then; not sure if they still do) so even factoring in labor and electricity, it's still a huge profit margin.
Theaters chain execs love it I'm sure. Still even if/when MoviePass goes under, the studios will probably take a small hit for a while, but I'm sure they'll recover.
MoviePass is run by an ex-Netflix executive, and it seems to have the same Lando Calrissian business model: they're going to have to keep altering the deal, and it gets worse every time. Netflix started off offering a library so large (and so filled with recent hits) that it put Blockbuster out of business for a monthly fee. Now it's basically HBO. MoviePass is likely going to end up doing the same thing: offering less and charging more as soon as they have enough people on the hook.
Movie pass wont work for me. For $10 a month, I can watch 10 99¢ movie rentals on iTunes. For the cost of two people on movie pass, that can be 4 to 20 movies on iTunes/Amazon in a month.
I think moviepass is targeted at singles who go to movies less than 12 times a year and it helps bring that demography to the theaters, and probably spend more on concessions.
I dont understand why Theater chains are "terrified"
I think moviepass is targeted at singles who go to movies less than 12 times a year and it helps bring that demography to the theaters, and probably spend more on concessions.
I dont understand why Theater chains are "terrified"
The big thing you’re missing is that the theater shows new movies. Also, iTunes rentals are usually more than that.
It would be interesting to know what fraction of seating is going empty in movie theaters these days. I would guess it is around 70%, maybe higher. Only opening weekend for some blockbusters fill them up. I would guess if they survive they will have two tiers, with a much more expensive one for opening weekend tickets. If they get people to go on off times, the theaters will be loving it.
A few years ago I had a subscription card for a cinema chain in the UK, it worked out to be the cost of around 1.5 tickets a month, but I ended up going around once a week.
Anyway, at the time there was no way to book tickets online, you just had to show up and if there was space you’d get a ticket. As such I’d usually go on Saturday early afternoon when it was usually pretty quiet.
Anyway, at the time there was no way to book tickets online, you just had to show up and if there was space you’d get a ticket. As such I’d usually go on Saturday early afternoon when it was usually pretty quiet.
Mitch Lowe, CEO, was interviewed a few months ago about the price drop and how MoviePass plans to make money.
https://www.forbes.com/sites/robcain/2017/09/17/ceo-mitch-lo...
https://www.forbes.com/sites/robcain/2017/09/18/ceo-mitch-lo...
https://www.forbes.com/sites/robcain/2017/09/17/ceo-mitch-lo...
https://www.forbes.com/sites/robcain/2017/09/18/ceo-mitch-lo...
Sounds like a great service. If I lived in the US I would probably sign up and go to a lot more movies. I am down to going to the theater once or twice a year now, and I really like movies, but the prices are dumb.
I don’t see how the MoviePass model could be sustainable today. The name of the game appears to be “lose money on every ticket today to control the market tomorrow.”
But if they’re successful at controlling ticket sales I’m just not sure they have enough leverage to keep theaters and studios on board... idk just left scratching my head.
But if they’re successful at controlling ticket sales I’m just not sure they have enough leverage to keep theaters and studios on board... idk just left scratching my head.
How many people have successfully used MoviePass? I signed up the day the dropped the price and received no confirmation at all. I tried again a few weeks later--no confirmation once again.
I still haven't gotten a card from them, and I can't login to the system.
I still haven't gotten a card from them, and I can't login to the system.
My girlfriend and I both have MoviePass, I don’t have my phone on me but we’ve seen 8-10 movies already. It’s fun, we just run to the movies now. No more buying tickets a day in advance and then making sure we get there early enough.
We used to see movies exclusively on Saturdays or Wednesdays, when it’s cheaper, and only went to certain theaters. Now when we decide to see a movie we go whenever we feel like it, wherever we feel like it. We usually bring our own snacks/water too..
We decided to see The Last Jedi at 1:05 AM without any forethought and saw it on a massive screen with Dolby sound.
I can’t get a VC to return my cold calls/emails, but hey, at least a VC is paying for our movies.
We used to see movies exclusively on Saturdays or Wednesdays, when it’s cheaper, and only went to certain theaters. Now when we decide to see a movie we go whenever we feel like it, wherever we feel like it. We usually bring our own snacks/water too..
We decided to see The Last Jedi at 1:05 AM without any forethought and saw it on a massive screen with Dolby sound.
I can’t get a VC to return my cold calls/emails, but hey, at least a VC is paying for our movies.
I thought moviepass was just a free ticket. You make it sound as though they guarantee seating or something, too?
It is a free ticket, but it’s a free ticket without any kind of commitment. The showing you want to see is full? You’re really late? Skip it, go to the next one. Even if it’s not at the same theater.
The movie you want to see is $19 at the theater down the street vs $9 on the other side of town. Go to the theater down the street with the reclining seats.
We see 3-4 movies a month, MoviePass completely changed the way we think about and scheduled going to the movies. No stress.
The movie you want to see is $19 at the theater down the street vs $9 on the other side of town. Go to the theater down the street with the reclining seats.
We see 3-4 movies a month, MoviePass completely changed the way we think about and scheduled going to the movies. No stress.
When you head to the theatre, the cashier who takes your MoviePass will notify you if they're out of seats and MoviePass won't list the showtime as available when the theatre says they're out of seats. While you can use the walk-up approach, it's still best to make sure the showtime is open.
Basically they put the amount of the movie on a special MasterCard. You’re not guaranteed a seat until you use that card to pay for the seat.
I signed up 2 days after the price drop (Aug 17) and it took about 2 months to receive the card. Since then. Have used it about 6-7 times, never had a problem.
I know several people who successfully signed up, got their card, and have used it to see plenty of movies.
(This is in NYC, it may be different by region)
(This is in NYC, it may be different by region)
I use it all the time - it's great!
Their website looked pretty poor. There were no clear terms or explanation of the deal. Are movies free or what price are they? Maybe they don't need to care because they already get so many signups?
They have an app you use to checkin at a theater, you need to be near the theater when you checkin. The amount of the movie is added to your MoviePass MasterCard, you then pay for the movie using the MasterCard. Expensive movies like IMAX 3D or special showings are not covered.
> The average movie in San Francisco costs about $12, nearly 50 percent higher than the national average.
the average is $8? seems hard to believe...
the average is $8? seems hard to believe...
Half of America lives in places like Monroe, Iowa.
I just checked for a general admission ticket in Monroe, Iowa and it was $10.60 ... I guess if you include morning, kid and senior prices, the average is probably pretty low.
I am willing to bet that theater has a monopoly with no substitute goods.
Rural != Cheap
The lowest prices are probably in suburban areas where there are many competing theaters in a populated area with easy access.
Rural != Cheap
The lowest prices are probably in suburban areas where there are many competing theaters in a populated area with easy access.
My suburban hometown still has $4-5 tickets everyday. ~200k population with quite a few theaters around.
How do startups built upon subsidizing customers pull an Uber- get to a state where their unsustainable pricing practices are offset by wealth foreign investors with virtually unlimited money to burn?
So a service that gave people a reason to go the theater more often while encouraging them to spend more on on high-margin concessions (which the author admits is what he does) seems like a win for theaters.
Perhaps I'm missing something, one thing that drives me crazy nowadays is the sentence that hints at something buried in some link:
> And theater chains, particularly AMC, are [absolutely not on board](link to different article on same site that supports this claim, I assume).
Definitely couldn't have simply mentioned an AMC lawsuit against MoviePass, but why add more supporting facts when that might mean cutting anecdotes about what movies the author is now willing to sit through?
I agree with another commenter, this reads more like an ad, sounds more like MoviePass trying to get people to relate to this guy and become "terrifying" subscribers, just like him!