I am writing this on September 2,
2018. Things have been changing rapidly with MoviePass and other
Theater subscription plans lately, so I thought giving this a time
stamp was important. For the moment, things have balanced out and we
can think about what lies ahead. Starting August 15 of this year,
all MoviePass Subscribes who wanted to continue (even those who were
on the Annual payment plan) agreed to a 3 movie limit per month at
only $9.95 a month. If you remember, that promotional rate of $9.95
Moviepass introduced in the middle of 2017 really made waves. Prior
to that, Moviepass had plans ranging from $25-$50 a month, and with
the surging ticket prices, it seemed like a deal too good to be true. But it was true, people were going to the movie theater again, we
were reminded how great it is to be part of that communal atmosphere,
to experience a story along with a large group of people. Even
though Moviepass was still paying full ticket price to the movie
theaters, the large cineplex chains rallied against Moviepass. They
were afraid that Moviepass would decrease the value of a movie
ticket..... (let me hold back my single tear)..... I think we all can
agree that the prices needed to be lower. I liken it to when ride
share services threatened the transportation industry and brought
prices down for the good of the consumer. For proof of the finances
behind the box office, look no further than this recent study by
the-numbers.com. You can read their full article here.
https://www.the-numbers.com/market/
As the chart above shows, since 1995
ticket prices kept going upward regardless of when ticket sales were
on the rise or falling. Now look at the very end of that graph, the
last half of 2017 saw a big increase in tickets sold, I think it is
obvious that the Moviepass $9.95 promotion being in full swing had to
be a big factor with that.
One thing is for sure, the movie theater industry could not continue on the path that chart clearly shows. Eventually enough people would say.... “25 bucks for a
movie ticket! Let's wait until we can see it at home honey.” This
chart below from that same article shows the actual ticket price
increases over that same time period.
There you have it, even during the 2008
economic recession movie theater companies raised the price of a
ticket. Yes, it was time for a change, and when the Moviepass deal
came around, people embraced it, 3 million people in fact! In
response to this, the theater chains started their own ticket
subscription services.
Cinemark Movie Club offers 1 (one) 2-D
movie per month at $8.99 with 20 percent off their concessions. Oh
boy, I get to do basically the same thing as paying for a single
ticket... but I get to give the theater more money by paying for
their popcorn at a 1,275 percent markup from actual cost. No thanks.
AMC A-List lets you see 3 movies per
WEEK, in any format for $19.95 plus tax per month. I have to admit,
if I had a lot of extra cash to give away, this would be more
appealing to me than the current Moviepass offer. But, like many of
Americans out there, all these different monthly bills and services I
pay for add up. So $20 ends up being too costly for me when I
rationalize that before Moviepass, I rarely wanted to pay to see two
movies in the theater each month. In other words, the AMC plan is
making me pay more than I normally would, while the $10 Moviepass
deal is at very least how much I would be spending on trips to the
movie theater annually. There is a reason why the basic Netflix streaming service has stayed below $10 a month all these years. There is strength in numbers, and people want value for their buck. The other aspect to this is, these other
movie plans have the primary goal of having more people see movies only
in their theaters. While one of the things that makes Moviepass so
great to me is the variety of theaters it is available at, Indie theaters
and major theater chains in flagship locations alike.
SO WHERE IS THE PROFIT?
You may be wondering, how can Moviepass
continue to offer up to 3 movies a month at the $9.95 price? The
answer can be found at the top. Moviepass is owned by Helios and
Matheson, which is an analytics company. Like many other highly
successful companies, such as Amazon and Google, this Moviepass
parent plans on selling data they retrieve for marketing purposes. They are already using that data, that is how they decided on the 3
movie per month limit, that amount would keep the majority of their
subscribers happy, while also preventing the small percentage of
people who saw an excessive amount of movies, in a way, abusing the
system. This statement from Moviepass CEO Mitch Lowe speaks to that:
Mitch
Lowe blamed the service’s instability over the past year on “a
small number” of subscribers who “have used our business model to
a point where it was compromising the business’ long-term
stability.” The new model, he said, should remove the drag on the
service caused by “the small number of subscribers who imposed
undue cost on the system by viewing a disproportionately large number
of movies.”
You can read the full article that
quote came from HERE.
But wait there's more. The Moviepass
App has advertising, not too much at all, just a trailer for a movie
that plays on its home page. With millions of subscribers however,
that gives them some advertising clout. Moviepass has way more
subscribers than any of these similar services.
Another way to monetize this service is
through partnerships with movie studios and theater chains. By
offering a selection of movies to its subscribers, Moviepass can have
studios willing to strike a deal to have their movies available. Even better, by even selecting what days certain movies are
available, Moviepass can drive up ticket sales on a slow business
day... like any given Tuesday. The list of movies available through Moviepass are updated on the website every week, you can see it HERE.
This way I'm listing last, because it
is the most risky. Moviepass Ventures is a film finance company that
has started to co-finance major motion pictures. One of those movies
is the highly entertaining and unique heist movie American Animals. They picked that movie up after it was a hit at the Sundance Film
Festival, and I can see why. They did take a hit on the John Travolta movie Gotti. Next is a Crime Thriller called 10 Minutes
Gone starring Bruce Willis.
Will ticket subscription services be
the thing that turns everything around? Will it revitalize the movie
going experience that used to be a treasured, weekly institution? Of
course piracy is a big part of all this.... I feel the best way to
combat this is to give people a reason to see more movies in the
theater again. Foreign box office sales now account for almost three times as much sales in America. In 2017, the global box office hit a
record of $40.6 Billion, while domestic sales fell to $11.1 Billion,
the lowest it has been for 23 years. This used to be the opposite. Will services like Moviepass drive more Americans to the theater,
which in turn will enable the studios to make a wider variety of
movies again? I sure hope so.
Curt Wiser is the Writer/Director of the Suspense movie Cam-Girl. He is also an author and writer for www.ocmoviereviews.com
