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Is MoviePass at a loss to change the way we buy movie tickets?

Movie ticket sales plunged to a 25-year low in 2017.
Movie ticket sales plunged to a 25-year low in 2017.
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How many times a month do you go to the movies? A ticketing app is willing to bet about as often as you use your gym membership.

MoviePass offers a subscription alternative to the fixed ticket prices of movie theaters. The app allows users to see as many as one movie every day, at qualified theaters, for a monthly subscription fee of $9.95. (Last week, MoviePass announced a partnership with iHeartRadio, offering three months of MoviePass along with a three month trial of iHeartRadio All Access for $29.95.)

MoviePass has grown quickly and estimates it will have five million customers by the end of 2018. But for now it is losing money and is seeking ways to increase revenue.

Variety’s senior film and media editor, Brent Lang, recently wrote a story titled: “The Great Disruptor: MoviePass Upends the Movie Business, but Can it Survive?” John Horn gave him a call to discuss how MoviePass could influence the already-changing film industry.

Interview Highlights

On how MoviePass is taking on the film industry:

[With] most businesses, you don’t like to lose a lot of money on your customers. And MoviePass is essentially subsidizing their moviegoing. What [MoviePass] is saying is they believe that the data that they collect on people is going to be of tremendous value to movie theaters or movie studios. They believe they can advertise against their user base and they’ve already started to do that. Two of the major six studios have started advertising with them. And they’re also hoping that they will grow to such a great size that they’ll get some kind of discount on tickets, some kind of wholesale price. Or that they will essentially get a cut of the box office that they’re responsible for. Or, more controversially, a cut of the concessions that they may eventually sell on their service.

On how a subscription-based model for movie tickets may be difficult to take away:

AMC has said that this is an unsustainable model and that [theater chains are] essentially going to be left holding the bag when MoviePass goes bankrupt. But I think they also don’t like the idea of a new business model being introduced to customers. Because, like it or not, MoviePass has successfully introduced the idea of a subscription-based pricing to American moviegoers. And once something like that is introduced, particularly at a certain scale, it’s very hard to take that away. The value of a ticket in New York is something like $17 for me to go to a movie. Now if I think to myself [that] the value of going to the movie should be a monthly fee, and it’s less than $10, that totally disrupts their business.

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