About a year ago, MoviePass, a company offering discount movie tickets since 2011, introduced a new plan where you could see a movie a day for just $10 a month and saw a massive boom. It quickly found itself with a competitor, Sinemia, which has come out swinging with a new set of plans, starting at $5 a month for one 2D ticket all the way up to $15 a month for three tickets to any movie, 2D, 3D, IMAX or more, and offering reserved seating and advanced ticketing. MoviePass, for its part, has just revived its popular a-ticket-a-day plan for $10 a month. On the surface, it sounds like a great deal, at least for heavy moviegoers, but there are two big question marks here: Is it really worth it? And how long can these services continue covering the cost of movie tickets?
If you’re unfamiliar, here’s how it works: Both services issue you a debit card. You use an app paired to the card to “buy” your ticket and the service covers the cost of the ticket by charging it to their debit card. Pick up your ticket, grab your seat and enjoy the movie. There are restrictions, depending on the service: MoviePass, for example, only lets you see a movie once, only 2D movies, and doesn’t let you reserve tickets. But if you just want to catch a movie, especially a movie you aren’t going to pay home video prices to see, it’s basically a discount. And the more movies you see, the better a deal it is.
You’re probably already wondering just how these services make money since if you go to see two movies in a month, or even only one movie in many parts of the country, the services are officially in the hole. That’s an excellent question, and it doesn’t appear anyone has a definitive answer. There’s been no shortage of ideas; MoviePass, for example, recently offered a bundle plan with iHeartRadio that offer four tickets a month and access to iHeartRadio’s streaming music plan. And MoviePass executives have talked about theaters giving them a share of concessions sales, something that has already provoked a war of words with theater chain AMC, including a threat that if MoviePass gets big enough, it can drive customers away from theater chains until they play ball.
And in theory, at least, MoviePass is capable of solving a serious economic problem for most movie theaters. People aren’t going to see movies, mostly because they cost too much. 2017 saw movie attendance hit a 25-year low even as ticket prices rose 6%. Movie theaters don’t make money on selling you a ticket, they make it at the concession stand. But as Hollywood studios push more expensive options like digital projection and large-format theaters, which theaters have to install and pay for, and as studios use their leverage as the only game in town turning out massive blockbusters with the marketing campaigns to put butts in seats, the cost of a ticket spirals upward.
So, to stay in business, theaters need to be packed with theater-goers buying popcorn and soda every day of the week. MoviePass can theoretically address this, especially if it connects with people who don’t go to movies regularly because they can’t afford $15 a ticket. But, of course, if it just means people heading to the movie use MoviePass instead of buying a ticket, theaters will lose concession revenue. Margins are tight as it is in the theater business, and forking over even a sliver of that might make the difference between a theater that stays marginally profitable and a theater losing money fast.
Understandably, theaters are suspicious of anybody who wants a share of what little profits they’re making in the first place, especially when they can’t prove they hold up their end of this potential bargain. It doesn’t help that MoviePass is acting a bit like a movie studio itself, buying a share of John Travolta’s upcoming gangster pic Gotti. If these services start trying to drive specific viewership to specific movies, and collect a share of that ticket revenue as well as a chunk of the concessions revenue, why wouldn’t movie studios launch their own MoviePass-esque service and try to get some of that popcorn money?
MoviePass has modeled itself to some degree on Netflix, which has lead to a streaming service free for all. The worst-case scenario is a service war nobody wins, or one that leaves theaters in the same position with concessions revenue that they face with movie tickets: A small group of companies they’re utterly dependent on, steadily demanding more and more money.
One way or the other, it’s clear how people get into the movies needs to change, or else theaters are going to start closing no matter how much they get away with charging for a soda. A subscription service makes a lot of sense, and it might open up a new era of filmgoing. But only if somebody, somewhere, figures out how to make it profitable for everyone involved.