MoviePass, the service established by a Netflix co-founder, has surpassed 400,000 paying monthly subscribers in the past 30 days, up from just around 20,000 in mid-August.
The $9.95 movie subscription service provides theatre tickets to its customers on an unlimited basis (and for the moment, MoviePass is paying full cost to exhibitors for those tickets), and then analyses consumer trends, patterns and activities to engage subscribers with relevant film-related merchandise, advertising and concessions.
“MoviePass is the ‘all-you-can-eat’ movie theatre experience,” said Mitch Lowe, co-founder of Netflix, former president of RedBox, and current CEO of MoviePass. “Though expensive for the company in the short-term, it’s a significant benefit and more convenient for customers. With MoviePass, there’s no movie ticket prices to think about - going to the movies will become an everyday experience rather than an occasional treat.”
Helios and Matheson has agreed to buy a majority stake in the company, and is contributing technology that learns individual moviegoers’ tastes and makes recommendations based on recorded preferences for specific genres, actors and even the opinions of friends with similar likings. The idea is to provide end-to-end consumer analysis, from the moment someone sees a film ad on Facebook to the moment they take their seat at the cinema.
“This explains our sustainable business model: Helios and Matheson is incorporating advertising models with the MoviePass application using artificial intelligence, algorithms and machine learning so we can provide studios with more precise data for their advertising efforts,” said Ted Farnsworth, chairman and CEO of Helios and Matheson. “We want to understand the data generated by the movie goers and cater directly to their needs. For example, MoviePass will understand their genre choice films: horror, action-thrillers, drama, comedy, romance, animation, etc.”
He added that through testing, the company found viewership is up 18% on films it chooses to market more heavily in the MoviePass app.
“We will seek to sell our advertising to the studios, channelling MoviePass subscribers to see certain movies,” said Farnsworth. “Also, we plan to use the viewing history and habit information of each user to guide them to select upcoming movies that appeal to their interests. Our goal is to serve the interests of moviegoers, movie studios and movie theatres alike.”
MoviePass projects that it will acquire at least 2.5 million additional paying subscribers during the next 12 months, and sees itself retaining at least 2.1 million subscribers at the end of that period.
The company also surveyed around 30,000 customers and found that 75.3% asserted the only reason they went to the movies was the result of being a MoviePass subscriber. Furthermore, participating theatres have reported back with increased attendance by over 400% from MoviePass subscribers.
“I think it’s positive for the industry,” said Eric Wold, an analyst at B Riley & Co. “The exhibitors I have spoken with are very happy.”
The most visible opposition has come from theatre chain AMC.
Written by Michelle Clancy