National movie ticket prices are at an all-time high, but one company wants to tempt Americans with a $6.95 monthly subscription service, which allows moviegoers to hit the cinema once a day, for as many days as they'd like.
That service, Movie Pass, charges about $1.70 less for a full monthly subscription than the national average cost of a single movie ticket in the U.S.
Ted Farnsworth is the CEO at Helios and Matheson, the majority owner of MoviePass. He says the company is leaning towards a data-driven business model.
“That’s really where you make your money --on the data side,” Farnsworth said.
Helios and Matheson recently doubled down on its investment in MoviePass, where Netflix co-founder Mitch Lowe is at the helm, by funneling $100 million into the company. Lowe said that MoviePass will use this funding to expand its data science program.
"This latest round of investment will allow MoviePass to continue to deliver on its mission of staying the number one movie theater subscription service in the country," he said. "As demand for our service continues to accelerate among consumers, the early data we are seeing on movie-going behavior can be tremendously valuable to both the studios and theaters.”
But is this a risky investment? Data suggests that people prefer to watch movies at home. According to a Statista report, a cool 52 percent of Americans who watch movies prefer to stay home, while only 12 percent would actually go to a theater. Still, the same firm projects that the movie industry will hit $50 billion by 2020. As of 2016, it was worth $38 billion.
MoviePass is riling up some industry leaders, however. Movie giant AMC Theaters released a statement this summer calling the company a “small fringe player,” and stated that AMC is working with its lawyers to see if it can prevent MoviePass tickets from being used at its theaters.
“MoviePass announced a change to its ‘subscription model’ that would allow consumers to see up to 365 movies a year for a monthly fee of $9.95. MoviePass envisions paying AMC its full ticket price without discount. The AMC average ticket price for watching a movie at AMC Theatres in the most recent financial quarter was $9.33,” the statement said.
“From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month.”
This week, MoviePass launched a limited-time holiday sale that allows subscribers to sign up for under $7, although it usually costs 9.95 per month.
Farnsworth says that lowering the cost has brought in an influx of new customers. He also says that the company is partnering with tech companies like Uber and Lyft to offer “movie night” promotions, and similarly with movie studios.
“We are the only company that understands every move you make, what movies you go see,” he said. “It’s a very sustainable model, that’s not our issue at all, that’s why we lowered the price.”