MoviePass, Rattled by a Rough Year, Tries to Change Its Ways

Founded in 2011, MoviePass trundled along for years without incident by charging $50 a month, later lowered to $35.

Under its business model, theaters get paid full price for every admission. People who sign up 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 the price of a ticket to the membership card. Members in turn use the card to pay for entry. It all works independently of theaters, sometimes to their chagrin.

In 2017, Mr. Lowe and Theodore Farnsworth, chief executive of Helios and Matheson, took over MoviePass and drastically cut subscription prices.

More than one million people signed up in four months. Membership kept growing, passing the three million mark in June, and simple economics kicked in. MoviePass was shelling out more for tickets than it was taking in from subscriptions.

MoviePass had hoped to make money by striking bulk ticket pricing partnerships with theaters, charging studios fees to promote new films to members and perhaps even getting theaters to share a slice of concession revenue.

But the big theater chains and many studios recoiled.

“Unlimited movies in theaters for $9.95 was offensive to them because they thought it devalued their product,” Mr. Itum said.

Mr. Itum and Mr. Lowe said they expected studios and theater owners to be more amenable to the new plans. Part of their new strategy involves teaming with theater owners to help fill multiplexes during off-peak times.

“If there is anything we’ve learned,” Mr. Lowe said, “it’s to be a good member of the ecosystem.”

Article source: https://www.nytimes.com/2018/12/05/business/media/moviepass-subscription-plan.html?partner=rss&emc=rss