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'Hollywood is being run out of Miami': How MoviePass is conquering cinema

 Ted Farnswoth, the Miami-based CEO of the parent company of MoviePass, has been guiding the hot app through its ups and downs. Nick Garcia

Ted Farnswoth, the Miami-based CEO of the parent company of MoviePass, has been guiding the hot app through its ups and downs. Nick Garcia

Hollywood is set for its biggest box office weekend of the year as Disney and Marvel Studios release "Avengers: Infinity War" on Friday.

Its success will likely get a boost from a movie-ticket subscription service called MoviePass, which allows existing users to pay a flat monthly fee of $9.95 to see a movie a day at most major theaters. New users face tighter restrictions.

MoviePass has quickly become one of the most talked-about services in both Hollywood and on Wall Street as debate rages about the future of moviegoing.

And until recently, MoviePass's parent company, Helios and Matheson Analytics Inc., was partially headquartered at a co-working space on South Beach. It has now moved to a larger office in Brickell. Most of Helios' and MoviePass' employees work in New York.

"I think it’s a riot that Hollywood is being run out of Miami," said Helios CEO Ted Farnsworth.

U.S. movie attendance continues to shrink as more people opt to watch movies at home via services like Netflix and HBO. Increasingly, Hollywood studios are relying on blockbusters to drive sales, leaving small and mid-budget projects in limbo. That in turn is affecting movie theaters, which are spending millions to upgrade their facilities to offer a premium experience.

Enter MoviePass. The company founded by two entrepreneurs in 2011 initially charged between $15 and $50 a month for a run of movies at participating theaters.

In 2016, Helios merged with Farnsworth's Miami-based tech company, Zone. At the time, Zone was based at WeWork's Lincoln Road space.

Farnsworth, a tech entrepreneur and longtime Miami resident, was named CEO. He began strategic acquisitions that would make Helios' product lineup more attractive. He immediately seized on MoviePass, hoping to capitalize on the monthly subscription-service wave (think Netflix and Spotify).

Last year, Farnsworth decided to lower MoviePass's price to $9.95 to boost growth.

The new price launched MoviePass into the stratosphere. Between last August and this January, MoviePass said its subscribers grew by more than 6,500 percent. In February, MoviePass announced subscriptions had surpassed 2 million. Farnsworth said he now expects to reach 5 to 6 million users by the end of 2018.

Today, MoviePass is an object of obsession in the film industry. Just this week, the Hollywood Reporter asked, "Is MoviePass Hollywood's Future or Just 'Too Good to Be True'?" noting that MoviePass was the elephant in the bedroom at this week's CinemaCon conference.

"Its 2 million customers (and growing) are impossible to ignore," the publication said.

At the same time, questions have been raised about MoviePass' and its parent company's long-term financial prospects. For fiscal 2017, Helios reported a $150.8 million loss, compared with a $7.4 million loss in 2016. Farnsoworth attributes the slide to Helios' finalizing its acquisition of MoviePass. An outside audit first noted by Business Insiderindicated "substantial doubt" about the company’s ability to stay in business. Farnsworth dismisses the language as boilerplate in an annual report. Helios' stock price has continued to fluctuate. Verizon recently disclosed it had invested in Helios.

Rich Greenfield, media analyst at Wall Street firm BTIG, said it remains to be seen whether studios and movie theaters need, or even want, a company like MoviePass to prop up the film business. The service has been most useful in driving filmgoers to less-advertised fare, he said.

To remain viable, MoviePass will have to simultaneously deliver break-neck user growth and show that it is altering moviegoer behavior in Hollywood gatekeepers' favor.

"For [the MoviePass] model to work you need scale, and in order to scale you need to gain negotiating leverage relative to exhibitors," he said. "MoviePass is going to need tremendous scale."

MoviePass has at least one favorable poll in its pocket showing its impact on moviegoing. A Hollywood Reporter survey found that MoviePass subscribers were taking six more trips to the cinema than nonsubscribers and were twice as likely to see a movie on opening weekend. In addition, nearly half of MoviePass customers said they would now be more willing to see a movie by themselves, and 42 percent said they'd catch a flick midweek.

"I think MoviePass has to be considered one of the better things to happen to the movie industry in quite some time," said Jeff Lowe, host of the popular movie podcast Lights Camera Podcast, in an email. "Obviously, the theater companies don't seem to be big fans, but ever since MoviePass lowered their prices, I have seen my local theater as packed as ever."

Farnsworth says MoviePass is operating on an Amazon-like model, focusing on capturing as many users as possible. The company is continuing to make investments: It recently purchased venerable cinephile mainstay MovieFone to gain access to more moviegoer data. And MoviePass just bought a stake in the upcoming John Gotti biopic starring John Travolta through the indie financing arm it created in January.

He also emphasizes that the company now has a huge dataset of moviegoer habits, one that rivals whatever sets film companies and even theaters currently possess.

"We can now target a film's advertising better than it could have ever been done before," Farnsworth said. 
 

As for Miami, the company's presence here will continue to grow as long as the company continues to do so, Farnsworth said. A spokesperson said Mitch Lowe, who oversees MoviePass, will be spending more time in the Magic City, and that the company is looking to expand into Latin America.

"We caught lightning in a bottle," Farnsworth said.

Deseret News: HMNY buys more stock in MoviePass. Here's what that means

 As Bloomberg reported, MoviePass, which helps feed people’s film habits by giving them movie theater passes for a monthly fee, recently dropped its monthly subscription price to $9.95...

As Bloomberg reported, MoviePass, which helps feed people’s film habits by giving them movie theater passes for a monthly fee, recently dropped its monthly subscription price to $9.95...

Helios and Matheson Analytics announced Friday that it has bought even more stock in MoviePass, the trending subscription service that offers customers a free movie ticket per day.

In a press release sent to the Deseret News, HMNY said it has raised its outstanding shares of MoviePass’ stock to about 78 percent.

"We could not be more thrilled to hold a bigger stake in MoviePass, as the MoviePass phenomenon has become a major disruption to the entertainment industry,” said Ted Farnsworth, CEO of HMNY, in a statement. "The partnership continues to be a great benefit to both MoviePass and Helios and Matheson shareholders."

The increased ownership comes after HMNY provided cash advances to MoviePass from Dec. 19, 2017, to Feb. 15, 2018, “to support MoviePass' working capital and operational requirements, as well as to support the expansion of MoviePass' business plans and objectives,” according to the press release.

HMNY advanced $45,525,000 to MoviePass, according to the press release.

MoviePass CEO Mitch Lowe said HMNY’s advanced pay helped the company reach 2 million subscribers and that the increased investment will help MoviePass continue to grow.

"Our goal has always been to drive more people to the movies while reinvigorating the entire ecosystem that includes theaters, studios, and distributors. Our relationship with Helios makes that possible,” he said.

The announcement comes after HMNY’s stock dropped by more than 30 percent, according to MarketWatch.

According to CNA Finance, the public offering of the shares means the company may need more money.

“If there was no need for money, there would be no need to dilute the shares currently in the market by offering new shares for sale,” CNA Finance reported. “Some are arguing that the offering shows that the MoviePass service is a bust and that profitability is a long way away, if it ever comes.”

CNA Finance said HMNY will need to grow its own efforts of data collecting quickly so it will have enough money to fund MoviePass.

The drop in stock amount — with each share costing $5.63 on Tuesday — came after last week’s announcement that the company helped raise MoviePass to 2 million subscribers.

MoviePass lowered its monthly price to $7.95 last week, according to the Deseret News. The company also offered a bonus subscription movie streaming service called Fandor in its latest package, which will cost customers $115.35 annually, including a $19.95 processing fee.

MoviePass subscribers previously paid $9.95 per month for the service that gives customers a movie ticket per day.

"We're having fun. We're energizing the movie industry, constantly experimenting,” Lowe told The Hollywood Reporter.

 

 

The Seattle Times: Unlimited movie-theater deal could be too good to survive

For $10 a month, MoviePass lets people go to a movie every day if they want. It believes it can get people to theaters more often. Major theater chains and movie studios aren’t so sure, putting MoviePass’ business plan at risk.

 With her MoviePass card, Cassie Langdon says she’s seeing more smaller releases in addition to blockbusters and sequels. (Darron Cummings/AP)

With her MoviePass card, Cassie Langdon says she’s seeing more smaller releases in addition to blockbusters and sequels. (Darron Cummings/AP)

NEW YORK — MoviePass is trying to bring to movie theaters what Netflix did for DVDs and online streaming: Let subscribers watch as many movies as they want for $10 a month.

In doing so, MoviePass has struck a chord with moviegoers and a nerve with the movie industry.

For many people, going to the movies is worth it only a few times a year. Ticket prices keep rising, and moviegoers have plenty of cheaper alternatives, including Netflix.

MoviePass believes it can get people to theaters more often. Major theater chains and movie studios aren’t so sure, putting MoviePass’ business plan at risk.

Subscribers with MoviePass can watch a movie a day, be it a splashy blockbuster or an indie movie contending for the Oscars.

Though MoviePass works at most theaters, it has key restrictions: It excludes pricier 3-D and Imax showings and most advance online sales. And even if everyone in a group has a subscription, tickets must be purchased individually. Subscribers also complain that MoviePass responds too slowly, or not at all, when there’s a problem.

Nonetheless, the thrill of the bargain has sparked interest. MoviePass said earlier this month that it signed up a half-million subscribers in less than a month, bringing its total to 2 million.

“I’ve seen a little over a dozen movies, which is way more than what I would have without it,” said Cassie Langdon, a 28-year-old Indianapolis woman who works in sports communications and joined MoviePass in October.

Langdon said she’s taking chances on smaller releases instead of sticking with blockbusters and their sequels.

Success could ultimately bring MoviePass’ demise. Although subscribers pay just $10 a month, or less with promotions, MoviePass is paying most theaters the full price of the ticket. The U.S. average is about $9, though $15 and up is common in big cities, putting MoviePass in the red with just one movie. By contrast, MoviePass competitor Sinemia offers just two or three movies a month for higher fees.

Plus, with an unlimited plan, MoviePass has to eat some unnecessary costs, such as when a subscriber buys a ticket just to use the theater’s restroom.

MoviePass’ parent company, Helios and Matheson Analytics, warns in a financial report that MoviePass’ future is in “substantial doubt” because it “has incurred losses since its inception and has a present need for additional funding.”

The service is ultimately counting on a “gym membership” effect: Subscribers might binge at first, but slow down once the novelty wears off. Although subscribers can cancel anytime, they wouldn’t be able to sign up again for another nine months, a rule to discourage short-term memberships.

MoviePass wants to work out ticket discounts and revenue-sharing deals on the premise that it’s driving more people to theaters. The company is also eyeing a share of concession sales, saying moviegoers are more willing to buy popcorn and soda when scoring a “free” movie.

And MoviePass believes it can help promote movies because it knows what subscribers see, when and where. Promotions could even extend to sending alerts to buy a soundtrack or movie poster as subscribers leave the theater.

But several industry experts say MoviePass doesn’t add much to the marketing data from theater chains, online ticketing services and other sources.

MoviePass will have leverage once it has “millions and millions of subscribers,” said MoviePass CEO Mitch Lowe, a Netflix co-founder who left while it was still a DVD-by-mail business.

To get well beyond the 2 million it already has, MoviePass needs to convince people that they really want to go to movies more often. In most cities, a subscriber needs to watch 13 movies a year to break even. In big cities, it’s eight.

“For someone like myself, who usually sees movies twice a year, it wasn’t something I would end up doing,” said Lisa Berey, a 40-year-old social worker in New York.

And consider that MoviePass’ original business plan didn’t work out. When the service cost $30 to $50 a month, it had just 20,000 hard-core movie fans. MoviePass slashed prices significantly in August to grow.

There’s apprehension that as moviegoers get accustomed to much cheaper prices, consumer anger might be redirected at theaters if MoviePass raises its prices, changes terms or goes out of business.

Adam Aron, CEO of the giant theater chain AMC, has called MoviePass’ price “unsustainable.” AMC initially threatened legal action, but seems to have backed off. The three theater chains that control roughly half of U.S. screens — AMC, Regal and Cinemark — say they’re happy to accept MoviePass’ money, but pooh-pooh any revenue-sharing deals.

This fear isn’t unfounded. In an attempt to gain leverage with AMC, MoviePass recently excluded 10 of the busiest AMC theaters, including big multiplexes in New York and Los Angeles. Confused customers complained on social media to both AMC and MoviePass.

For their part, theater chains are making their own changes. Many theaters now have more comfortable seats and better food. And though still a novelty, some theaters have servers bring restaurant-style entrees and cocktails to seats, providing both the dinner and movie components of date night.

Meanwhile, Cinemark launched its own subscription program, though the deal isn’t as good as MoviePass. Regal is testing higher prices for popular times and cheaper ones during slower periods.

“I have a hunch that most of the theaters are thinking, ‘How do we beat MoviePass at this game?’ ” said James McQuivey, principal analyst at research firm Forrester.

CinemaBlend: Why The Major Theater Chains Are Suspicious Of MoviePass, According To The CEO

Since August of last year, one of the biggest stories in the movie industry has been the emergence of MoviePass. The theater-going subscription service reduced its monthly rates and experienced a massive surge in subscribers as a result. But along the way, MoviePass has faced stark opposition from major theater chains like AMC, which staunchly oppose the service. For Netflix co-founder and MoviePass CEO Mitch Lowe, the suspicion the chains have for MoviePass stems from their aversion to having someone else come between them and the customer, as he explained:

I am sure that there are countless reasons the higher ups at the big theater chains would cite for why they don't like MoviePass, but Mitch Lowe's explanation certainly sounds logical. The theater chains had a direct relationship with the consumer that they could control, and I imagine they see MoviePass as breaking the directness of that relationship and making money by doing so. The theater chains could create uniformity to the moviegoing experience, carefully setting certain expectations for the consumer and crafting perceived value. MoviePass interrupts and changes that relationship.

The travel websites that Mitch Lowe noted are a fair, if not entirely equivalent comparison. The travel sites are acting as a middleman between the consumer and the hotels and airlines, and you can often get a better price by using them. The hotel and airline industry may have initially resisted this disruption, but eventually they adapted, and the two now peacefully co-exist. MoviePass is different though, in that the potential value added is huge compared to the discounts you might find on airfare by booking through a third party site. The more movies you see a month with MoviePass, the less each ticket averages out to be, thus changing consumer perception of the value of a movie ticket. As of yet, there is no such service that disrupts the airline or hotel industry to this extent (although can someone please get on that, airfare is expensive).

Later in his interview with Recode, Mitch Lowe also noted that independent and mid-sized theater chains are not as adamant in their opposition to MoviePass, with some seeing the service as a way to get people back into the theaters where attendance continues to decline. It will be interesting to see how the battle between the major theater chains and MoviePass shakes out. The theatergoing service has clearly struck a chord, recently passing the 2 million-subscribers mark, less than a month after hitting 1.5 million. Perhaps the service will struggle with profitability and go the way of the dodo, or maybe it will leverage its assets and settle into a symbiotic relationship with the theater chains just like the travel sites did with the airline and hotel industries. Only time will tell.

MoviePass just cut its prices again, but Mitch Lowe's service isn't the only game in town. There are some alternatives to the service worth looking at if you're considering a theatergoing subscription service. There are plenty of movies to see this year, too, regardless of how you're paying, so check out when they're arriving in our release schedule.

Fortune: MoviePass CEO Says He Could Gut AMC's

MoviePass, the subscription service that lets members attend one theater screening per day for just $9.95 per month or less, has attracted a stunning 2 million subscribers over the last six months. In a new interview, CEO Mitch Lowe details how he’s leveraging that subscriber base to build a profitable business: by making theater chains an offer they can’t refuse.

MoviePass started playing hardball in late January when it removed 10 AMC theaters from its service. Lowe tells Recode’s Peter Kafka about the results of that experiment, and it sounds like a nightmare scenario for AMC.

“We [pulled the theaters], I believe, on a Thursday. Over the weekend, we looked to see, did those customers who typically would go to AMC, did they find another theater to go to? Almost every one of them found another theater to watch the movie.”

In other words, instead of being frustrated at MoviePass, or buying a ticket at the box office, customers just walked past AMC to another nearby screening where they could use MoviePass. Because MoviePass still pays full price for most of its subscribers’ tickets, that’s taking revenue away from AMC and giving it to competitors like Regal and Cinemark.

The goal, Lowe makes clear, is to pressure AMC to sell MoviePass discounted tickets. MoviePass this month cut what it describes as ‘revenue sharing’ deal with over 1,000 independent cinemas and smaller chains, but AMC has firmly stated that it won’t get on board—despite the fact that, as Lowe points out, individuals can already get big discounts when buying AMC tickets in bulk.

If AMC doesn’t play ball, MoviePass is clearly prepared to go to the mattresses by pulling even more AMC theatres, and sending more moviegoers to the competition. “We identified locations,” Lowe told Kafka. “There’s many more than these 10, that have plenty of competition around them.”

The impact of such an escalation on AMC, which is owned by Chinese conglomerate the Dalian Wanda Group, could be dramatic. Lowe claims that tickets bought by MoviePass now generate 62% of AMC’s operating income—that is, income after major expenses. That would translate to nearly $35 million in revenue in the current quarter, or $135 million annually. And that doesn’t include concessions sales from MoviePass users, which MoviePass says add up to $68.4 million annually for AMC. (Fortune has reached out to AMC for comment.)

MoviePass made similar claims after its January power move, but AMC said at the time that MoviePass “greatly exaggerated its contributions to AMC’s profitability.” That’s because MoviePass gets its 62% number by measuring its contributions against AMC’s revenue after expenses, not overall sales. An analysis by tech publication The Verge found MoviePass sales make up just over 4% of AMC’s overall revenue.

So MoviePass is carefully packaging its numbers, but however you slice it, they’re not chump change—and MoviePass is still growing. That leaves a game of chicken worthy of The Fast and the Furious: MoviePass has to cut ticket deals to reach profitability, but pulling out of more AMC theaters to push for a deal could make its service less appealing. AMC doesn’t want a middle-man between it and its customers, but MoviePass is now sending it a huge number of ticket sales that AMC can’t be eager to hand to rivals. The question now is which company blinks first.

 

CNBC: MoviePass slashes prices to $7.95/month—so how does it make money?

  • MoviePass just cut subscription fees to $7.95 per month and topped two million users.
  • The movie-ticket subscription service has also signed deals with two major and six indie studios to co-distribute and market new films.
  • CEO Mitch Lowe says that when MoviePass has had a paramount impact on indie films—adding up to 8 percent to their bottom line.

Movie theater ticket sales hit a 20-year low in 2017, but one rapidly growing subscription service is trying to get more people into theaters by cutting its already low prices – and expanding into new ventures.

MoviePass, which launched in 2011 and now boasts more than two million subscribers, allows users to see one film in theaters every day for a flat monthly price. Membership has skyrocketed since Mitch Lowe took over as CEO this past June and slashed fees from $30 a month to $9.95. In just two days after the fee reduction, sign-ups shot up by 150,000.

The Hollywood Reporter: The Orchard, MoviePass Give 'American Animals' Spring Release

 Courtesy of Sundance Institute

Courtesy of Sundance Institute

The heist movie stars Evan Peters, Barry Keoghan, Blake Jenner and Jared Abrahamson.

The Orchard has dated Sundance acquisition American Animals for a June 1 North American release.

The indie distribution company partnered with ticketing service MoviePass for the heist movie. American Animals marks the first acquisition for MoviePass, which recently announced that it will lower its price from $9.95 to $7.95 and is bundling its service to include free access to Fandor, a streaming service for independent films.

American Animals, which is based on a true story, was written and directed by Bart Layton. Evan Peters, Barry Keoghan, Blake Jenner and Jared Abrahamson star in the pic as a group of young men who pull off a heist at a local university. Ann Dowd and Udo Kier also star.

Prior to hitting theaters, American Animals will screen at SXSW.

TechCrunch: MoviePass cuts price by teaming up with Fandor on a bundled subscription deal

The controversial subscription service for movie-goers, MoviePass, is still chasing new customers as it attempts to rapidly grow its user base before its funding runs out. After growing from 1.5 million to 2 million users in less than a month’s time, the company has now teamed up with streaming service Fandor to appeal to potential subscribers with a bundled offer.

The two companies announced a “limited time offer” which includes both a MoviePass and Fandor subscription for less than $116 per year.

However, some users were confused about the new pricing plan worked.

Like MoviePass says, the deal will lower the MoviePass subscription down to $7.95 per month from its usual $9.95 per month. But the full annual fee has to be paid upfront, not monthly.

The company hasn’t decided how long before this offer expires, but it’s not the first time that MoviePass has tried a bundle. The same offer was originally tested back in November 2017, and was well-received, says MoviePass.

The Fandor subscription includes access to a collection of over 5,000 independent films, documentaries, classics, international features and shorts.

The deal arrives at time when MoviePass’ business model is being increasingly scrutinized. The company claims its users now drive more than 5 percent of the total box office and is continuing to grow its user base. But MoviePass is subsidizing the cost of those tickets for now, while betting on the fact that it will be able to monetize in other ways.

For example, it aims to make money from studios who want to target its customers with their marketing efforts, or access user data to learn about trends; it’s taking a cut of ticket sales and concessions at some theaters; it has begun to acquire movies; and it hopes that eventually, users will slow down their movie-going to their usual once per month (or less), after the initial rush of having an all-you-can-watch subscription wears off.

Not all theater chains are thrilled with MoviePass, however. MoviePass recently pulled out of several high-traffic AMC locations as the chain refused to negotiate on a rev-share deal.

“We already know in past testing that MoviePass subscribers are not theater-loyal; they’re happy to drive by a theater that may be closer to a theater that will accept MoviePass -because of the MoviePass value,” MoviePass majority owner HMNY’s CEO and Chairman Ted Farnsworth said, threatening AMC.

The company has also more recently faced issues with customers using the pass to offset the cost of IMAX or Fathom Events movies, which is prohibited; or were buying tickets that they exchanged for gift cards. MoviePass canceled these users subscriptions, it said. Meanwhile, some users claimed they were seeing too many movies, which is why they were kicked off.

Subscribers who sign up for the new Fandor offer will be billed $115.35 ($7.95 a month plus a sizable $19.95 processing fee); They will then receive one full year of MoviePass and one full year of unlimited streaming from Fandor.

Engadget: MoviePass adds 500,000 subscribers within a month

But can it keep up with its growing user base when it pays for every ticket at full price?

 Photo Credit: Jovo Marjanovic

Photo Credit: Jovo Marjanovic

MoviePass' $10-per-month subscription service was a hit from the start, enough to crash the company's website when it was first announced. It looks like demand isn't slowing down anytime soon either: it has gained500,000 more subscribers merely a month after it reached 1.5 million users. The fact that MoviePass cut off members' access to some popular AMC theaters had little effect, if any. It's easy to see why 2 million would sign up: for 10 bucks a month -- an ongoing promo even cuts the price down to $7.95 -- they're entitled to see one 2D film a day, every day, without paying extra.

In 2017, members bought $110 million worth of tickets and generated an additional $146 million in ticket sales by bringing non-members to showings. MoviePass chief Mitch Lowe said in a statement:

"We're giving people a reason to go back to the movie theaters, and they're going in droves. With awards season here, we hope we can make Hollywood and exhibitors very happy by filling seats with eager audiences."

As Bloomberg said, though, all these new users are both a blessing and a curse to the company. Every time a member watches a movie, the service pays for that subscriber's ticket at full price. It loses money for every member that watches two movies a month, and its accountants apparently already warned the company that its system might not be viable in the long run. AMC shares the same sentiment and once called the business model unsustainable. It's like turning "lead into gold," the theater chain said in a statement last year. 

So, how does MoviePass plan to make money if subscribers aren't bringing in the cash? It's hoping to sell ads, merchandise and data on moviegoers' habits, as well as to get a cut of theaters' refreshment sales as they go up from all the viewers it brings to cinemas. The company is also hoping to convince theater chains to sell it tickets for its members at a discounted rate.

It's unclear if MoviePass is already making headway with those plans, but when it dropped several AMC locations from its list, it said that the theaters it works with is subject to change as it "continue[s] to strive for mutually-beneficial relationships with" them. AMC chief Adam Aron has been quite a vocal critic of the service and already proclaimed that the chain has no intention of sharing its admissions or concessions revenue.

MarketWatch: MoviePass defends abrupt subscription cancellations over terms-of-service violations

Some users insist they’ve done nothing wrong, but MoviePass says they’ve defrauded the company by reselling tickets, ordering multiple cards and other infractions

MoviePass says it’s making a concerted effort to crack down on fraud, and the subscription cinema service has already brought the hammer down on a handful of subscribers. 

A report by Business Insider on Friday shed light on the fact that some MoviePass subscribers were complaining on social media that their subscriptions — under which, for $10 a month, they’re entitled to attend as many movies as there are days in that month — had been canceled abruptly.

MoviePass reportedly sent those users emails saying their memberships had been canceled effective immediately for terms-of-service violations. Specifically, at least some of the subscribers were told they’d used MoviePass cards in the purchase of premium ticket. “You cannot sign back up for MoviePass,” the emails reportedly concluded.

Ted Farnsworth, chief executive of MoviePass’s majority owner Helios & Matheson Analytics Inc. HMNY, -7.31% , told MarketWatch that the number of users whose subscriptions were canceled was in the hundreds and that the subscribers had definitely violated the company’s terms of use and had committed fraud. 

“The thing is, with the size we’re getting to now we have to crack down or these people will ruin it for everybody,” Farnsworth said. “I mean, we’ve been out to theaters in [New York City] and watched people do it.”

Farnsworth said the canceled subscribers had been using MoviePass cards at concession stands, to purchase gift cards or even get cash back, or reselling tickets, or ordering multiple cards to buy other people tickets.

MoviePass has grown much quicker than Farnsworth and Chief Executive Mitch Lowe expected — the company recently passed the 2 million subscriber mark — and they’ve had to scramble to build out departments like customer service and fraud protection.

The crackdown on fraud is something Farnsworth said the company has only been focusing on in the past 90 days. MoviePass recently hired an employee who had headed antifraud efforts at Redbox when Lowe was CEO there. 

In January, MoviePass updated its terms of use — around the same time the company kicked up a feud with the nation’s largest theater chain, AMC Entertainment Holdings Inc. AMC, -2.18%  .

Its terms of use state that subscribers have agreed that MoviePass can suspend or terminate subscriptions without prior notice for a number of violations, including creating multiple MoviePass accounts, buying tickets with their passes through Fandango or other third-party services, and using the MoviePass card for to buy anything other than a movie ticket from a theater kiosk.

“A lot of times the theaters will call us to let us know when they think someone’s committee fraud, too — especially the independents,” Farnsworth said. 

Subscribers suspected of fraud will typically receive letters letting them know that they’ve appeared on MoviePass’s fraud radar, Farnsworth said. From there, he said, the company will monitor the account.

“You don’t want to cut anyone off unless you have to,” he said. “And, trust me, we don’t want to cut anyone off.”

Business Insider: MoviePass terminated a 'small percentage' of its users for violating its terms of service — and people are freaking out

 Dimension Films

Dimension Films

  • MoviePass confirmed to Business Insider that a "small percentage" of accounts were terminated due to users violating its terms of service.
  • People have taken to Twitter to object in very vocal terms.

 

On Friday, MoviePass terminated the accounts of what it described as a "small percentage" of users who violated its terms of service, the company confirmed to Business Insider. 

This was a shock to many users, who took to social media to object to being taken off the service. Many of them said they were confused as to why their accounts were deleted. 

Business Insider obtained an email that was sent out to members who MoviePass said violated its terms of service by purchasing part of a "premium ticket" on their card. However, multiple people who received the email denied they had ever done that.

Here's the email:

"Your account has been cancelled effective immediately for violating the terms of service by using your MoviePass card to purchase part of a premium ticket. You cannot sign back up for MoviePass."

Customers who then inquired via MoviePass' customer support account on Twitter were sent this via Direct Message:

"Thank you for sharing your concerns with us. Your account was cancelled due to Terms and Conditions violation. You should have received an email notifying you on this on February 09, 2018 with a description of the action that was in violation. Please remember to check your Spam or Junk folders for this email. Some email filters may prevent it from being delivered directly to your inbox. Terms and Conditions violations cannot be disputed nor can your account be reactivated. We appreciate your understanding."

Many took to Twitter to voice their frustration and confusion as to why they lost their accounts:

A MoviePass spokesperson sent the following statement to Business Insider regarding the canceling of accounts:

"A small percentage of MoviePass users have been removed from the system, due to violating the terms of service. We diligently review card transactions to prevent fraudulent activity and take our Terms of Service agreement very seriously. If individuals abuse the service, we must take action so that our model continues to be sustainable for everyone. If customers feel there has been a mistake, they can feel free to reach out to MoviePass customer service via the phone number on the back of their card."

Bloomberg: MoviePass Tops 2 Million Subscribers While Cash Burn Accelerates

The pressure is on for Hollywood disruptor MoviePass.

The startup, which allows customers to watch one film a day in a theater for less than $10 a month, said on Thursday that it has passed 2 million subscribers. But the more members the company adds, the faster it burns cash, and MoviePass has already been warned by its accountants that its long-term viability is in question.

As MoviePass directs more movie fans to theaters, the question for the company is whether studios and exhibitors will agree to share revenue from ticket or popcorn sales. MoviePass said it has yanked its service from 10 AMC Entertainment theaters because the chain won’t cooperate, while Cinemark has already started its own subscription service.

“We’re giving people a reason to go back to the movie theaters, and they’re going in droves,” MoviePass Chief Executive Officer Mitch Lowe said in a statement. “With awards season here, we hope we can make Hollywood and exhibitors very happy by filling seats with eager audiences.”

The company, which is majority-owned by Helios & Matheson Analytics Inc., pays theaters full price for tickets, which can cost $10 apiece or more. MoviePass warned in an October regulatory filing that more frequent viewing by subscribers will lead to increasing losses and the need for more financing. The company plans to earn money by aggregating data on moviegoers’ habits, advertising and merchandise sold through its platform, and possibly by gaining a share of refreshment sales.

Lowe said via email on Wednesday that MoviePass bought $110 million worth of tickets in 2017, generating an additional $146 million in ticket sales, mostly through members bringing non-members to the films. MoviePass customers apparently have good taste.

CNN Media: MoviePass continues its rapid rise as it surpasses two million subscribers

MoviePass is not slowing down.

The $10 a month unlimited movie service just crossed two million subscribers less than one month after passing 1.5 million users, the company announced on Thursday. 

"We're giving people a reason to go back to the movie theaters and they're going in droves," CEO Mitch Lowe said in statement. "With awards season here, we hope we can make Hollywood and exhibitors very happy by filling seats with eager audiences." 

Thursday's announcement did not include any information on how many subscribers are actually using the service to watch movies. CNN has reached out to MoviePass for further details. 

Ted Farnsworth, the chairman and CEO of MoviePass' majority owner and analytics firm Helios and Matheson, said that the service is bringing people back to theaters by "lowering their cost," which the company believes is "transformational for the industry." 

The data the company collects from these two million movie-goers "will become an important asset to our partners and the future of the movie industry," Farnsworth said. 

MoviePass has been the talk of Hollywood and movie-goers since it lowered its subscription fee to $9.95 a month in August, setting off its tremendous growth rate. 

Lowe told CNN last month that the company is buying one in every 35 tickets sold in the country. He also said that the company is playing catch up to its own growth by investing in areas like its unstable MoviePass app and its unreliable customer service. 

Related: MoviePass CEO: $10 unlimited movie service is playing catch up to its own growth

Despite its successful rise, the service has found itself in a contentious relationship with mega movie chains like AMC while also answering questions about just how viable its business plan is. MoviePass sells its user data to third parties to make money. 

"Our service is really low because we are going to use our understanding of you as a customer to be able to give you relevant suggestions that you might find valuable in your life," Lowe told CNN last month. "We might say there's a great restaurant across the street from the movie. If you go over there and show them your card, you're going to get a free appetizer."

Forbes: MoviePass Generates Almost $130 Million For Oscar-Nominated Films

 A view of signage at the MoviePass House Park

A view of signage at the MoviePass House Park

MoviePass, the subscription service that allows moviegoers to see one movie per day for a monthly fee of $9.95, has undergone incredible growth through the end of 2017 and beginning of 2018.

Its membership skyrocketed from 600,000 in October 2017 to 1 million the following December and grew to 1.5 million by January 2018. That growth is now being seen during the peak of Hollywood’s awards season. According to Deadline, since November 2017, MoviePass has drawn in $128.7 million for select Oscar-nominated films.

The acclaimed films include nominees for Best Picture, Best Animated Film and Best Foreign Film. MoviePass subscribers have also been able to see films featuring nominees for Best Actress, Best Actor, Best Supporting Actor and Best Supporting Actress as part of their monthly subscription.

According to Deadline’s calculations of the percentage of domestic box-office sales contributed by MoviePass, the coming-of-age drama Call Me By Your Name garnered the highest percentage at 8.79% ($1.1M), with The Shape of Water coming in second, at 7.87% ($3.5M). Three Billboards Outside Ebbing, Missouri accumulated 6.89% ($2.8M), followed by Lady Bird at 6.18% ($2.7M). Steven Spielberg’s star-studded political drama The Post totaled 5.57% ($3.7M).

I, Tonya, the biopic about infamous US figure skater Tonya Harding is also a sweet spot for MoviePass: the service contributed 11.48% for the film. Chronicling the allegations that Harding was indirectly involved in an attack on fellow skater and opponent Nancy Kerrigan before the 1994 Winter Olympics, the film nabbed acting nominations for title star Margot Robbie and Allison Janney, who played her embittered and overbearing mother. The Square, nominated for Best Foreign Language Film, also racked up 7.57% of its sales through MoviePass.

At such a low cost of $9.95 a month – less than a single movie ticket in many cities – and available at 91% of theaters in the United States, to many, MoviePass has seemed too good a deal to be true. The subscription does include a few limitations: Subscribers cannot see 3D movies and they cannot watch more than one per day.

MoviePass has been consistently evolving since it was first launched in 2011 when its sliding scale cost up to $50 more expensive cities. The monthly subscription fee was lowered to a flat rate of $9.95 in August 2017. It recently experienced conflict with film exhibitor AMC and removed some of their locations from the service’s availability. And more changes are possible: MoviePass is considering expanding to include 3D and IMAX films in its services.

Forbes: At $9.95 Per Month, Can You Afford Not To Subscribe To MoviePass?

 Credit: Shutterstock

Credit: Shutterstock

When someone told me I could see several movies a month at nearly any movie theater in the country for just $9.95 a month, my first instinct was, what's the catch — this deal sounds way too good to be true.

After looking into how MoviePass works, I'm now wondering: why would anyone not sign up for this service?

What Is MoviePass?

MoviePass is a subscription service that allows you to see any 2D movie at nearly any theater, for $9.95 a month. You could technically watch up to 31 movies a month, but there is a limit to one movie per day. In addition, there is no ongoing commitment required.

MoviePass' network coverage is impressive, allowing you to watch a movie at over 91% of movie theaters in the country.

Why Haven't I Heard Of MoviePass Before?

MoviePass has actually been around since 2011, but it's gone through several different price and service changes. At times, MoviePass limited the number of movies you could see in a month to two or three and historically, the service was as much as $50 a month.

In August 2007, a majority stake in the company was sold to Helios and Matheson, an analytics company. At the same time, the company introduced its current pricing structure, allowing subscribers to watch up to one movie a day for just $9.95 a month.

Read full article here

Vulture: What’s Behind MoviePass’s Latest Power Moves?

 Credit: Vulture

Credit: Vulture

Credit MoviePass with continuing to confound Hollywood with grand gestures. Last summer, the app-based ticketing service stunned the industry by slashing its subscription price to just $9.95 — a ludicrously inexpensive and (for the company) certainly unsustainable monthly fee entitling subscribers to see one film a day, every day, at a time when the average ticket price hovers around $9. By early January, its customer base surpassed all expectations, growing to more than 1.5 million subscribers (500,000 added in just three weeks). And with its ticketing said to account for between 3.5 and 12 percent of a given film’s total domestic box-office gross, MoviePass has proven it can lure people back to the theatrical moviegoing experience even at a time ticket sales have been in a death spiral.

But over that same six-month period, AMC, America’s largest theater chain, essentially declared war on MoviePass, castigating the service as a “fringe player,” threatening legal action, and refusing to cut it in on any profits resulting from the surge in attendance MoviePass takes credit for creating. “AMC has no intention, I repeat, no intention, of sharing any — I repeat any — of our admissions revenue or our concessions revenue with MoviePass,” AMC chief executive Adam Aron said during an earnings call late last year.

Then last week MoviePass flipped the script again: At the SundanceFilm Festival, the ticketing service made the unprecedented move of partnering with indie-film distributor the Orchard to buy North American distribution rights to the heist drama American Animals. The $3 million deal is set to include half the film’s prints and advertising costs but, more importantly, also changes the calculus of MoviePass’s business operation by shifting part of its focus to putting out movies — rather than just getting people into theaters to see them. MoviePass followed that power move (under the aegis of a new division called MoviePass Ventures) with a shot across the bow at AMC: Last Thursday, after the theater chain once again rebuffed MoviePass’s call for revenue sharing — specifically, a $3 cut of every ticket and 20 percent of concessions sales — the ticketing app blocked service at ten of the highest-traffic AMC theaters across the country, effectively driving business to AMC’s competitors.

To hear it from MoviePass chief executive Mitch Lowe, however, the service shutdown was more of a tactical display of strength than the onset of combat. Over the last month, he tells Vulture, MoviePass purchased 1 million tickets from AMC. And according to his own back-of-the-envelope estimation, the net result is at least $14 million in additional ticket sales and concessions profits for the theater chain — money that would never have materialized but for MoviePass. “We wanted to let them know that viewers have a choice,” says Lowe. “You can either work with one of the companies that’s reengaging and reenergizing moviegoers. You can get them to spend a lot more money with you. Or you can not work with them. We’d love to work with AMC! We would love to push tons of our customers to their locations.”

He continues: “If you take a small percentage of that increased profit and share it with us, that would ensure that we could continue to drive more activity to the movie theater business. But if you don’t, there are others who would love our business. And in fact, the majority of those subscribers who would’ve gone to AMC went to Regal and Cinemark.”

AMC declined to speak to Vulture but said in a statement: “AMC has taken no action to block the acceptance of MoviePass at our theaters. We have no further comment about MoviePass’s unilateral actions. We are, however, disappointed that MoviePass continues to make false statements about AMC, including recently when MoviePass greatly exaggerated its contributions to AMC’s profitability.”

One unexpected upshot: The partial AMC blackout took many MoviePass subscribers by surprise. And they, in turn, took to Twitter to vent about the unannounced discontinuation of service.

 

Slash Film: MoviePass Will No Longer Cover Certain AMC Theatres

MoviePass, are you okay? The very popular subscription-based movie service has been doing really well for itself, raking in the dough while also expanding into acquiring films for distribution. But now there’s a sudden bump in the road: MoviePass is no longer working with certain AMC Theatres, and it appears that this was a decision made by MoviePass, not AMC. Here’s what we know about the outages at certain MoviePass locations.

For a while now, folks have been thinking MoviePass might be too good to be true, and a sudden hiccup in the service may prove this theory correct. Deadline reports that MoviePass is no longer working with certain AMC Theatres – MoviePass will no longer cover tickets at big market AMC theaters like the Empire 25 in New York City, the Universal City Walk, AMC Loews Boston Common and the AMC Century Plaza.

MoviePass CEO Mitch Lowe issued the following statement:

“As of today, you’ll find a small handful of theaters are no longer available on our platform. Our number one goal as a company is to provide an accessible price-point for people to enjoy films the way they’re meant to be seen: on the big screen. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values. As we continue to strive for mutually-beneficial relationships with theaters, the list of theaters we work with is subject to change. We advise customers to always double check the MoviePass app for the most up-to-date list of participating theaters.”

MoviePass has had some issues in the past. When the service dropped its prices, inspiring an influx of sales, AMC expressed doubts. Yet this move to no longer cover certain AMC Theatres apparently doesn’t come from AMC, but from MoviePass itself, as this Tweet from AMC seems to confirm.

This is all likely due to increased ticket prices. MoviePass stopped working at the AMC City Walk Theater at Universal Studios, Hollywood last year because ticket prices were too high. In other words, there’s only so much money in ticket sales that MoviePass is willing to cover. Per Deadline, the subscription service covers $2 million in weekly ticket sales to AMC.

Meanwhile, MoviePass continues to chart new territory. After surpassing 1.5 million subscribers, MoviePass offered people a chance to win ten 12-month MoviePasses by simply attending a screening of I, Tonya. On top of that, MoviePass recently decided to move into the distribution game by purchasing movies. Just this week, they partnered with The Orchard to purchase American Animals at Sundance.

Wired: HOW DOES MOVIEPASS MAKE MONEY? WE'RE STARTING TO FIND OUT

 MoviePass has pulled support from some AMC theaters, just one of many signs it's finally serious about making money.  PATRICK T. FALLON/BLOOMBERG/GETTY IMAGES

MoviePass has pulled support from some AMC theaters, just one of many signs it's finally serious about making money.

PATRICK T. FALLON/BLOOMBERG/GETTY IMAGES

WHEN MOVIEPASS LAUNCHED last summer, it introduced a seemingly impossible offer: See a movie every single day in theaters, paying only a monthly fee that, in most markets, amounts to less than a single ticket. It worked. Earlier this month, MoviePass hit 1.5 million subscribers, growing much faster than anyone expected, including MoviePass.

But amassing customers was never going to be the hard part. MoviePass now has to show that it can actually, you know, make money. A little less than six months in, it looks as though it just might have an answer—although a fresh spat with AMC shows that not everyone will like it.

Giving It Away

To be absolutely clear: The more subscribers MoviePass signs up, the more money it loses. It pays theaters full price for each ticket, whether a member visits once or 31 times a month. It has to provide for customer service to support those 1.5 million people, many of whom have lobbed valid complaints—MoviePass issues debit cards to each of its members, and initially couldn't keep up with demand—as the service struggled with its rapid expansion. And that’s on top of the usual, unglamorous costs of running any business. (Backends don’t maintain themselves.) If it seems like MoviePass is too good to be true, that’s because right now, it is.

Which is also why its explosive growth hasn’t been an unvarnished good, at least in the short term. “It’s harder in some respects and easier in others,” says MoviePass CEO Mitch Lowe, who cites the company’s customer service falterings as a primary drawback. There’s also the matter of all the cash the company must have run through by now; Helios and Matheson, an analytics company which has a majority stake in MoviePass, continues to put millions toward keeping the company afloat through the outflow. Analyst Brian Kintsligner of Maxim Group recently wrotethat the company had "an estimated seven months of cash" to cover losses incurred by heavy-usage members.

The question, then, might not be whether MoviePass has a long-term plan for success—it's if the company can stick around long enough to see it through.

Read more here

The Verge: MoviePass pulls support from popular AMC theaters

MoviePass and the AMC Theatres chain have never exactly enjoyed a rosy relationship, and the latest step in their conflict came today, as MoviePass pulled support from some of the chain’s most high-profile locations. Deadline reports that the service is no longer supporting ticket purchases at theaters like the AMC Empire 25 in New York, Universal City Walk near Los Angeles, and the AMC Loews Boston Common.

“As of today, you’ll find a small handful of theaters are no longer available on our platform,” MoviePass CEO Mitch Lowe said in a statement. “Our number one goal as a company is to provide an accessible price-point for people to enjoy films the way they’re meant to be seen: on the big screen. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values.” The statement goes on to clarify that the list of participating theaters is subject to change, and MoviePass customers should consult the mobile app for updates to that list.

AMC and MoviePass have been publicly at odds since the subscription service drastically cut its monthly subscription price in August 2017. (The company previously relied on a tiered model that scaled monthly pricing from $15 to $50 based on region, much like movie ticket prices can vary from one locale to another.) AMC responded by threatening to drop out of MoviePass’ deal, and potentially even file a lawsuit. The chain’s logic has been straightforward, however: mass adoption of a subscription service like MoviePass could effectively change the perceived value of movies, resulting in a situation where theatrical exhibitors wouldn’t be able to charge enough to keep their own businesses afloat. 

“AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theaters, nor will it produce enough income to provide filmmakers with sufficient incentive to make great new movies,” the company said in August.

What’s interesting about today’s development is that MoviePass reportedly didn’t notify AMC or its own customers ahead of time. In fact, AMC’s own support account on Twitter wrote earlier today that MoviePass still has not contacted the chain about the development. Given the public rancor between the two companies, it seems likely that MoviePass made the change quietly as a bit of hardball negotiation, hoping customers would become angry with the theater chain and blame it for the problem. On social media, that appears to be exactly what’s happened. But in reality, the tactic could easily backfire on MoviePass, as customers realize they can’t trust the company to consistently provide access to their favorite theaters. Presenting MoviePass access as arbitrary and subject to political maneuvering is hardly a consumer-friendly tactic.

It’s been clear for some time that MoviePass isn’t simply trying to find ways to bring more people into existing movie theaters. The subscription-price reduction came after MoviePass sold a majority stake to the data firm Helios and Matheson Analytics, Inc., and the change has allowed the company to jump from around 20,000 subscribers to 1.5 million subscribers as of January 2018. MoviePass’ ability to track what movies its customers are watching, and where they’re buying tickets, is valuable data for marketers, advertisers, and distributors. And Lowe has said that selling that data is a major way that MoviePass is going to make money. Not having access to AMC — the largest theater chain in both the United States and the entire world — could make achieving that goal more difficult, since it would be clear MoviePass’ data would be incomplete. There are good reasons AMC was the first chain MoviePass signed a deal with, and that importance is likely why MoviePass is being so aggressive around AMC now.

MoviePass is already trying to add revenue streams past its data-driven approach. The company has been heavily promoting movies like I, Tonya and Forever My Girl to its users, clearly as part of a paid promotional package. And before 2018’s Sundance Film Festival, the company announced it had spun up a division that will actually acquire movies, then use a traditional distribution company to get them into theaters. During Sundance, it partnered with distributor The Orchard to purchase North American distribution rights for Bart Layton’s American Animals for $3 million, giving the company the opportunity to create a closed loop with a captive audience: it can own part of a movie that it then promotes to its own customers, driving up the ticket sales that its own subscription service helps generate.

And like most entertainment companies, MoviePass is already looking beyond theatrical exhibition. In November, CEO Mitch Lowe said on CNBC that the company would eventually launch its own streaming service as well. But as MoviePass tries to hardball AMC into going along with its demands, and as it lures in millions of customers by offering increasingly lower ticket prices, it’s important to remember that when something seems too good to be true, it often is. 

MoviePass isn’t trying to help movie theaters; it’s trying to use them to capture data it can sell. It isn’t trying to help people see more movies out of some altruistic bent; it’s hoping to spike attendance in the short term so it can expand the pool of people whose data it’s collecting. And when it doesn’t get the answers it likes from a chain like AMC, it’s willing to cut those theaters out completely, regardless of the harm that does to its customers or reputation. While a $9.95 subscription deal may sound great, it’s really only a good deal if it works consistently, at the theaters where customers want to use it. And as MoviePass’ CEO said, those theaters are subject to change.