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Mitch Lowe

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.

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."

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.

Seeking Alpha: The MoviePass Narrative Has Evolved. I Am Long.

Summary

A simple reflective question made me reassess my initially bearish position on the comany - Will it be around in a year?

The company could stand to benefit from a range of revenue verticals, some of which would have a material effect on its financial story.

The risk/reward is skewed to the upside at the current price.

The aftermath of my Helios and Matheson Analytics's (HMNY) MoviePass article; "Can A Flawed Business Model Generate Investor Returns? An Empirical Analysis Of MoviePass" was to be expected. Bulls sought to defend their position, bears theirs, and words like "shill" and "manipulator" got thrown around. However, in the midst of this a simple question made me reassess my entire bearish premise; will MoviePass be around in a year? This was a watershed moment in my opinion towards the company. At face value, it is a very basic question. Bears will either answer no, go short! Or yes, go short! However, when I sought to answer it, I was fully converted to a bull.

I thought it would be prudent to write an article exploring the findings from my answer to this question as I placed an order with my broker to buy a considerable amount of calls. This article will explore how I have come to join the ranks of individuals initially described as being induced with "FOMO induced haze".

Movie Marketing-as-a-service (MMaaS) 

MoviePass should not be thought solely as a movie ticket subscription company. While its subscription offering for moviegoers could potentially break even and become profitable, central to its long-term growth is selling movie marketing-as-a-service.

The current context for movie studios is bleak as year-on-year increases in marketing costs have intertwined with year-on-year decreases in movie theater attendance. This represents a negative return on marketing investment (ROMI). Further, most of this is spent to buy television time (70% or more in most cases), which is a non-targeted form of advertising. Variety states that the "reason the marketing revolution has yet to materialize is that distributors still lack the kind of granular customer profiles" necessary for more "interesting, precise, cheaper, and efficient marketing.”

Read full article here

The Washington Post: The MoviePass deal: For less than $120 a year, you can see 365 movies. Here’s the catch.

MoviePass is a film nerd’s dream. The subscription service allows users to see one movie a day at a theater for a single monthly cost. The service isn’t new, but it’s become popular among a lot more than movie buffs in the past few months.

During its first six years as a company, MoviePass relied on the idea that most of its 20,000 subscribers wouldn’t use the service. It’s the way many gyms make money: Convince users to sign a contract, then hope they’ll never actually show up to use a treadmill.

But when Mitch Lowe, a Netflix co-founder, took over MoviePass as CEO in June 2016, he opted to flip this revenue model on its head.

First, he teamed up with data firm Helios and Matheson Analytics Inc., which bought a controlling interest in the company. Then, in August, he announced a radical overhaul to the company’s pricing model, dropping the cost from around $50 to $9.95 per month.

Instead of hoping subscribers skip out on the movies, Lowe wants MoviePass customers to visit the theater as often as possible. Because the more movies its subscribers see, the more data the company rakes in. And that’s where the real dough is.

“The big money for us was always understanding the consumers habits and the data, because no one’s ever done that,” Ted Farnsworth, CEO of Helios and Matheson, told The Washington Post.

After the pricing change, the service exploded in popularity, adding 150,000 subscribers in two days, Lowe told The Post. Since then, its user base has grown to 1.5 million subscribers. It added 500,000 of those in last month alone. (For comparison’s sake, it took Netflix about four years to reach 1 million subscribers.)

MoviePass is trying to drive customers to movie theaters at a critical time. Movie attendance in 2017 dropped by more than 6 percent from the previous year, according to Box Office Mojo, which noted about 82 million more tickets were sold in 2016 than 2017.

The average movie in America costs $8.97, according to the National Association of Theatre Owners. In cities such as New York and Washington, tickets can run $15 to $20. MoviePass customers would only need to see one or two movies a month to get their money’s worth. According to the Motion Picture Association of America, 11 percent of American and Canadian moviegoers already do just that.

Since MoviePass pays the full price for each ticket, it quickly loses money on many customers.

“They definitely need to generate revenue from ancillary revenue sources,” Eric Wold, an analyst with B. Riley FBR, a financial services company, told The Post. He added that the company will probably raise its prices over time, much like Netflix did, but even then it will still require other income sources.

The company has spoken of seeking of concession revenue from the theaters to which it sends moviegoers, according to Fortune. During the weekend, the company announced that it will be investing in movies.

But Wold — echoing Farnsworth — said data is the key to the company’s potential success.

While most theater chains track its own customers’ habits, Wold said MoviePass is the first service that can track moviegoers across nearly all theaters in America. Those insights could be valuable to the restaurants, bars and even retail outlets situated around movie theaters, according to Wold.

“That data could help local restaurants, or local clothing stores, market to the moviegoers,” he said, pointing out that many theaters are in malls or strip malls. The other businesses occupying that space would probably pay to know when certain demographics will be visiting en masse.

The service also has a direct line to avid moviegoers, which could benefit the studios themselves.

Wold said while average moviegoers are willing to shell out upward of $15 for blockbusters such as “Star Wars,” they might often wait for smaller fare like “Lady Bird” to hit streaming services. Having MoviePass encourages users to see the smaller films that they wouldn’t normally shell the money out for.

“They’ve already shown results from the non-blockbuster films getting an increase in traffic from MoviePass subscribers,” he said. For example, the service accounted for 1.7 percent of ticket purchases on the opening weekend for the comic book blockbuster “Justice League.” But it accounted for 10 percent of ticket sales of the independent film “Three Billboards Outside Ebbing, Missouri,” according to a news release.

Studios have noticed.

“In the short term, we’re already using the data to promote titles on behalf of the studios. Studios are paying us around two dollars per ticket we buy in exchange for us marketing their film,” Lowe said.

But while studios might be pleased, not all the movie theater companies are.

Cinemark, which owns more than 500 theaters nationwide, launched its own truncated version of MoviePass, called Movie Club, in December. For $8.99, moviegoers can see one movie each month at a Cinemark theater and receive a 20 percent discount on concessions, according to a news release. Like MoviePass, Cinemark’s version doesn’t apply to 3-D movies.

AMC Theatres, which has more than 650 locations in the United States that serve around 200 million moviegoers every year, loudly voiced its opposition to MoviePass in August. The company said the service “is not in the best interest of moviegoers, movie theaters and movie studios” in a harsh statement that said it was consulting with attorneys to determine “if or how” it could prevent MoviePass from being used in its theaters.

“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,” the release stated, cheekily adding, “AMC noted that it is not yet known how to turn lead into gold.”

AMC said it fears that MoviePass offers a price point that’s too good to be true and will eventually go belly-up, disappointing moviegoers who grew used to the cheaper pricing.

If MoviePass fails, “subscribers will have to return to paying between $10 to $15 for a single ticket. After three months with the service, I don’t think I could do that,” Nick Statt wrote in the Verge, adding, “once you’ve gotten something for what feels like free, it’s difficult to go back to paying for it.”

The explosive interest in MoviePass signal that moviegoers are seeking a change, and there’s no indication that it will slow any time soon — unless it proves to be an unsustainable model. AMC declined a request from The Post for comment, but recent remarks from the chain’s CEO Adam Aron hint that the company might be warming to the idea — but still has no plans to share its own revenue.

“We appreciate their business,” Aron said in a November conference call with analysts, according to the Hollywood Reporter. He added, “AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue.”

Deadline: Can MoviePass Impact The Indie Film Biz & Survive In The Long Run? CEO Mitch Lowe Explains – Sundance

EXCLUSIVE: Film sales agents at Sundance, think about this: What if a potential buyer could literally guarantee a certain portion of a film’s box office opening weekend?

That’s the pitch from MoviePass, the monthly movie ticket service, which announced their new division MoviePass Ventures on Friday at Sundance, a subsidiary that will co-acquire independent films.

When it comes to film festival acquisitions, co-partnering has become increasingly more common. Amazon Studios, before they independently distributed their own slate, would acquire films with partners like Lionsgate and Roadside Attractions. 30WEST too has become a player in teaming with partners to pick up titles, read Colette with Bleecker Street at this year’s fest for mid-seven figures, and with Neon on I,Tonya out of the Toronto International Film Festival (Also announced during Sundance, 30WEST took a majority stake in Neon).

Over the weekend, Deadline sat down with MoviePass CEO Mitch Lowe who expounded on his plans for MoviePass Ventures at the company’s Sundance mansion in Haber City, Utah. Lowe has had pic co-financing aspirations for sometime and springing it at Sundance was the ripe opportunity.

“We’ve had many meetings with serious distributors who are bringing their lawyers to meetings,” says Lowe about the newfound interest in MoviePass Ventures, “That’s how serious they are.”

While Lowe didn’t get into specifics in regards to whether MovieVentures would look to co-finance entire film slates or team with a specific producer in the indie sphere, he mentions that the ideal partner would be “a distributor who understands content and who understands distribution.” Essentially, MoviePass Ventures would split the minimum guarantee on pic’s acquisition.

“If it’s $4M then we would put up $2M. Then we market the heck out of it and ensure that we sell a ton of tickets to the theatrical opening, and then we share with all the downstream revenue,” says Lowe on one potential MG scenario.

Essentially in the end it’s a means of maximizing a pic’s overall ticket sales and making sure that all “downstream revenue is higher and amplified” adds the CEO.

In recent weeks, MoviePass says that they’ve moved the needle on a number of awards contenders’ ticket sales including Fox Searchlight’s Three Billboards Outside Ebbing, Missouri, A24’s Lady Bird and Neon/30WEST’s I, Tonya. Distributors who have access to ComScore’s Rentrak live ticket sales system are unable to decipher what portion of their hourly business is derived from MoviePass customers. But that’s where MoviePass stops in regards to selling data to them.

Speaking about the struggle that mid-budgeted films have at the box office versus $100M-budgeted event titles, Lowe says, “Exhibitors and studios have not figured out a way to affordably attract an audience to the smaller titles. They have taken the path of putting a ton of money in the brand titles. We see it with our subscribers: They want the better stories, they want to see these mid-sized titles ($25M-$50M); they’re just not marketed properly.”

In recent times, those in the industry have feared that streaming has encroached on the theatrical business, particularly as Netflix champions the immediacy of watching content, and meeting consumers’ demands for it. Then there’s Lowe, a Netflix co-founder, who is taking an opposite approach, and capitalizing on the traditional side of the theatrical business, but via a monthly movie ticket subscription model ala Netflix’s.

 

As such Lowe doesn’t believe streaming is capsizing the theatrical business.

“It’s super-healthy, despite Netflix, Hulu and the fact that theaters have doubled the cost of going to the movies, it’s still an $11 billion business” says the CEO about the domestic theatrical marketplace, “I don’t believe it’s in decline.” His one piece of advice is for exhibition to embrace other big content outside what the majors are peddling, i.e. “they should do binge Thursdays of Game of Thrones,” says Lowe.

Further commenting on the supposed notion that streaming is chomping away at theatrical, Lowe says “It’s wishful thinking. They (Netflix) just don’t get the idea that watching a comedy by yourself is not like the getting-out-of-the-house-experience.”

In regards to MoviePass’ ongoing relationship with exhibition, you could say relations have smoothed. AMC, the largest exhibitor in the world, has changed their attitude: They once tried to block MoviePass, but are now more pragmatic about the ticket service. “In an October earnings call, AMC said they were happy to take our money, but they don’t know how MoviePass is making money. My response is you’re the ones who had to borrow $4.5 billion. So, how are you making money?” specifies Lowe.

While some have criticized MoviePass in that its App is only good for a solo moviegoer, Lowe says 3.0 version will be launching in the near future with ultimate updates that will include options to buy tickets for a friend at a discounted rate as well as the ability for groups to purchase tickets.

 

While it’s a challenge for theater chains to sell studios on a monthly subscription price that won’t cut into the majors’ share of film rentals, MoviePass doesn’t have this headache. As an outsider they can feasibly keep both exhibition and the studios content by paying the full price of a movie ticket. We hear the majors continue to be intrigued by MoviePass and are funneling more money toward the monthly ticket company in marketing dollars. Similar to how Imax can rep 10% or more of a blockbuster film’s opening weekend, if MoviePass can do the same ultimately, the industry will have but no choice but to take them seriously as a catalyst for business.

One cynical major studio chief told Deadline, “If MoviePass ultimately reps 30% of the box office, they’ll go broke doing so.”

What’s Lowe’s response to this?

“They (the studios) have never eaten at a buffet restaurant every night for a month. What they would find by the third or fourth night is that they are not covering their plate with food, but eating more normally. What our customers do is that they go crazy over the movies during the first month, a little bit less in the second, and little bit less in the third, fourth and fifth months. They’re doubling their frequency from what they did before but we’re edging toward a break-even model. On what we pay for a ticket and what we collect in revenue, I think they (the studios) assume everyone in the world has all the time in the world to go to the movies several times a month. In fact, that’s not what happens,” said Lowe about MoviePass’ future financial longevity.

Currently, 30% of all MoviePass subscribers are concentrated in San Francisco, Los Angeles and New York with 70% scattered across the nation.

Says Lowe, “It takes money to build any subscriber base and in the subscription business, you have to invest in the long term.”

L.A. BIZ: MoviePass to invest in movies before it sells cheap tickets to them

MoviePass arrived at the Sundance Film Festival this week not just as seller of cheap movie tickets but as a buyer of the movies themselves.

The New York-based movie theater subscription service has launched MoviePass Ventures, a wholly owned subsidiary that will co-acquire films with distributors.

Although details are scarce, and no distributor partnerships or film acquisitions have been announced, the move provides more insight into how the company plans to make money.

MoviePass relaunched in August with an all-you-can-watch movie subscription plan for just $10 per month. Subscribers can go to one movie per day, every day, with no blackout dates (excluding Imax and 3-D showings) for one flat monthly rate that’s about a buck more than the cost of one average movie ticket — and a lot less for many moviegoers.

Earlier this month, the company announced it had surpassed 1.5 million subscribers.

Screen Shot 2018-01-20 at 1.03.49 PM.png

Meanwhile, MoviePass, which is majority owned by Helios and Matheson Analytics Inc. (NASDAQ: HMNY), reimburses movie theaters for the full price of those tickets and is operating at a loss as it attempts to convince the industry that its service increases moviegoing.

The company said that it accounts for about 3 percent of domestic ticket sales, but that figure goes up to more than 10 percent of a particular title’s domestic box office when MoviePass promotes the movie to its subscribers. The company said it has boosted its share of domestic box office to 10 percent for such films as “The Post,” “Three Billboards Outside of Ebbing, Missouri,” “Call Me by Your Name” and “The Shape of Water.”

And such increases in the theatrical window pay dividends downstream on platforms such as DVD/Blu-ray, digital, streaming, pay TV, network television, airlines and hotels, and foreign sales.

MoviePass will apply these marketing strategies to the films it co-acquires.

“Given the successes we have demonstrated for our distributor partners in ensuring strong box office in the theatrical window, it’s only natural for us to double down and want to play alongside them — and share in the upside,” said CEO Mitch Lowe in a statement.

“We aren’t here at Sundance to compete with distributors, but rather to put skin in the game alongside them and to bring great films to the big screen across the country for our subscribers,” added Helios and Matheson Analytics CEO Ted Farnsworth.

TechCrunch: MoviePass says it will start acquiring movies, too

On the heels of hitting a 1.5 million subscriber milestone and bringing on a new marketing chief, the subscription service for watching movies in theaters, MoviePass, today announced it’s going to start buying movies, too. The company says it will begin to invest in films so it can share in their success beyond the box office, including on other platforms like streaming, DVD, and on-demand.

At present, MoviePass is seeing rapid growth thanks to dramatic cuts to its subscription pricing, rolled out last year.

Essentially, the company is subsidizing the cost of its subscription with the capital it raised from data firm Helios and Matheson Analytics Inc. (HMNY), now its majority owner. The idea is that MoviePass will operate in the red while growing its subscriber base, and then hit some sort of break even point in terms of revenue before the funding runs out. (Or perhaps HMNY is willing to keep piling on more cash until that point arrives.)

HMNY believes it will eventually be able to sell the data and insights gained from a large subscriber base to studios, who could then do targeted marketing for their films to the most active movie-goers.

The model, of course, is risky. And theater owners like AMC have already lashed outagainst the service claiming its low-cost tickets are devaluing the movie-going experience.

But maybe MoviePass just found a sweet spot in terms of what a large number of consumers are willing to pay to actually go to the movies? After all, movie ticket prices have risen over the years, but attendance is hitting record lows. With all the other options to watch movies these days – not to mention the “peak TV” moment ushered in by the streaming era – these “in-the-theater-movies” face tough competition for consumers’ time and money.

Still, MoviePass believes it has the power to boost theater attendance, so it may as well share in the upside of the films to which it sends all of these customers; and that includes when those films start streaming across other platforms beyond the silver screen.

The company today claimed it can boost theater attendance on demand, in fact.

It says it currently buys about 3 percent of the domestic box office, but when it tweaked some things in its app – things it only described as “a series of levers within its app and marketing-based platform” (uh-huh) – it could move the needle even further. It said it did this for The Post, Three Billboards Outside of Ebbing, MissouriCall Me By Your Name and The Shape of Water. MoviePass says it impacted 10 percent of box office performance for these movies.

We should note the company didn’t share specific data that would allow these figures to be fact-checked more thoroughly.

MoviePass is now at Sundance making the pitch that it’s ready to invest in films itself.

It will do so via MoviePass Ventures, a wholly-owned subsidiary founded to co-acquire films with film distributors.

Basically, the idea here is that since it can (maybe!) boost the performance of a movie in the theatrical window, that will impact the movie’s ability to generate revenue downstream – like when the digital version goes on sale, or when it starts streaming.

And MoviePass wants a cut.

“We aren’t here at Sundance to compete with distributors, but rather to put skin in the game alongside them and to bring great films to the big screen across the country for our subscribers,” said Ted Farnsworth, CEO of Helios and Matheson Analytics Inc., in a statement. “We’re open for business. We’re here at Sundance – and SXSW is next.”

Forbes: MoviePass Is Now A Movement With 1.5 Million Moviegoing Members

Helios & Matheson (NASDAQ:HMNY) announced this morning that its majority-owned movie ticket subscription service MoviePass added an impressive 500,000 subscribers in just the past 30 days. The company’s total subscriber count now stands at 1.5 million.

MoviePass has been flying on a hockey stick trajectory since it announced in August that it had lowered the price of its movie ticket-a-day service from approximately $40 to $9.95 a month. That’s less than the price of a single ticket in most theaters across the United States, yet the service allows subscribers to attend as many as 31 movies in a given month, with the entire cost paid by MoviePass.

The 500,000 subscriber gain represents a huge acceleration for the booming service. In the six years from its founding in 2011 to Aug. 14, 2017, when it announced its new pricing plan, MoviePass accumulated just 20,000 subscribers. By mid-September it had zoomed past 400,000 — a 20-fold increase — and by late November it had reached one million.

 

 

That implies a current revenue run-rate of at least $180 million a year, and growing fast. But the company’s expenses — which haven’t yet been disclosed in an annual filing — are presumably much higher than that. MoviePass CEO Mitch Lowe has expressed confidence that the service can make a profit from collecting and selling behavioral data about its subscribers, and he told me that he expects that costs will level off as the average subscriber's usage drifts down to attending just one movie per month. Both of those claims have been met with widespread skepticism by analysts and stock market investors.

That skepticism explains HMNY’s modest stock price of just $7.14 per share (it had peaked at $38.86 last October). Today’s announcement of 50 percent subscriber growth in 30 days has barely registered with investors, who pushed the price up by just 3 percent in mid-day trading. Its market cap of $147 million is just 0.8x times imputed annual revenues.

Still, MoviePass wouldn’t be the first online consumer service to grow exponentially without earning a profit, and its prospects are far from bleak. When I interviewed MoviePass CEO Mitch Lowe in September, he told me his target was to reach 2 million subscribers by year-end 2018. At this rate he’ll reach that total in February.

The former Netflix executive and co-founder told me that with scale will come additional revenue opportunities, including possible movie distribution and even financing and production. "When we get to 10 million subscribers,” he told me, we'll be able to generate $7 million in additional box office for an independent film. At that point it makes sense for us to get into the distribution business."

Whether MoviePass can get that far will depend largely on Lowe’s ability to manage the challenges that come his way. So far he has managed to survive an enormous consumer backlash that arose when MoviePass failed to make timely delivery of its membership cards to paying members, and he’s overseen torrid growth despite continuing customer service problems. Still, movie lovers should take advantage of the $9.95/month service while they can. MoviePass and its parent Helios could potentially run out of money before they reach their goals, or they just might have to jack up that low price to a more sustainable level.

Forbes: Subscription Service MoviePass Is Going To Revive Moviegoing -- Or Go Broke Trying

MoviePass is a service that lets subscribers go to the movies as many times as they want for $9.95 a month. The seven-year-old company touts itself as the solution to high ticket prices for consumers and stagnant ticket sales for theater chains. But MoviePass has had a rocky road to its current 1.5 million subscribers. The company took a while to find a price that worked for consumers. When it rolled out the $9.95 service this past August, the company was unprepared for the surge in demand. Meanwhile theater chains remain wary of any incursion on their turf and most still make MoviePass pay full retail price for tickets it distributes to subscribers—meaning it loses money on almost every transaction. In an expensive place like New York City the cost of a movie ticket can be $16. MoviePass is making a bet that by losing money to acquire customers now it will drive so much more traffic to theaters that eventually the chains will have to cut the subscription service in on the increased action--presuming, of course, that MoviePass doesn’t run out of money first.

MoviePass CEO Mitch Lowe led the company to 1.5 million subscribers.

MoviePass CEO Mitch Lowe led the company to 1.5 million subscribers.

The company was cofounded by Stacy Spikes and Hamet Watt. Since June 2016, however, it has been led by CEO Mitch Lowe, 65, former founding executive at Netflix and COO and President of Redbox. In 2017 Lowe engineered the sale of a majority stake to analytics firm Helios and Matheson Analytics for $27 million. In this interview which has been edited and condensed, Lowe talks about how he plans to make the company profitable and why marketing a subscription movie service is a little like selling health insurance.

Natalie Robehmed: How did you get involved with MoviePass?

Mitch Lowe: I left Redbox in November of 2011. In 2012 a friend introduced me and Mark Randolph, one of the cofounders at Netflix, to the founders of MoviePass. We saw that they were going after this niche audience of heavy moviegoers and they were pricing it as such: $30, $40, $50 a month. We started advising them to look at the people who aren't going as much. They didn't see eye to eye with us, so Mark and I walked away at the beginning of 2013. In January 2016 I was at the Sundance Film Festival at a party at Chris Kelly's house. Chris, who had been Facebook’s first chief privacy officer, had become the major shareholder in MoviePass. Over the next couple of months we kept talking and then finally I invested in June of that year and came in as CEO.

Robehmed: How much had the company raised at the time?

Lowe: Just under $14 million over four or five years.

Robehmed: How many subscribers were there?

Lowe: There were about 23,000. The average price was $35. They had different price points by market: New York was $44.95, Kansas City was $29.95 and then there was a mid market at $34.95. I think 70% of the subscribers were in those higher cost markets.

Robehmed: What did you do when you took over?

Lowe: I wanted to understand a couple of things. One was, were those people who only go to four or five movies a year interested in going more? We found out there are 200 million people that tend to go four to five times a year. Then we researched "What's the correlation between what you charge the customer and how often they go?" At $45, our average customer went to 3.8 movies. At $35 they went to 2.8. At $25 they went to 1.8. And at $14.95 they went to 1.1. There's some seasonality in that, it goes up a little bit in December and down a little bit in February.

For our target audience, which is people under 35, one of the biggest impediments is "I don't know if this movie's worth it." Having a subscription where, if you see a movie and don't like it, you can just walk out, that's really worth money. At $14.95 it was still a big deal, but at $9.95 there wasn't a single person who we interviewed who didn't say, "I'd be crazy not to try this." Every price above that, we lost people.

Robehmed: But at $9.95, you’re losing money even if they only go to one movie a month. Was it hard to find investors willing to bankroll that?

Lowe: I couldn't get anybody to believe. When you do a subscription, especially an all-you-can-eat, the first subscribers you get, about 11% of the total, are going to be in high cost markets and they're going be people who see a lot of movies. It's like health insurance: The first sign ups are the people that are going go to the hospital. You have to weather the storm to get to the profitable subscribers. You've got to get enough breakeven customers to off-set the expensive ones. I think I met 150 different VCs and family funds. Then I ran into Ted Farnsworth who owns this company called Helios and Matheson in May or June 2017. He was the first person to really believe in the $9.95 price point and was willing to come to the table with the money that it would require. Funding a company like this is not a small task. We are going to need $100 million to get up to profitability.

Robehmed: Why did you wait until Helios and Matheson came along to move on the $9.95 price?

Lowe: We didn't have the funds to support it. I wanted to go into this more conservative, so I was ready to do $14.95 to $19.95. And he said, "No. You’ve got to do what the data tells you." I knew then that I had someone who was a big believer and a supporter, and had the ability to help me get the funding for it. We signed the deal on August 15 and that morning launched the service.

Robehmed: How did that go?

Lowe: The first two days we signed up 150,000 subscribers. We were totally unprepared. If you look at the stock purchase agreement between us and Helios and Matheson you'll see there is a bonus clause that if we hit 150,000 in 18 months or 15 months, we'd get $2 million. And we hit it in two days. We were only prepared for about 100,000 subscribers in a month. Our credit cards that we send people have an eight-week turnaround time and we only had one authorized shipper who could ship 50,000 a week. So it took us eight weeks to be able to get a whole new supply.

Robehmed: How many people got mad and canceled?

Lowe: I think 4.2% of people canceled in the first month and that dropped down to 2.2% or so in the second month, and then 1% or something in the third. Our growth has just continued. We're bringing in thousands and thousands every day. And our customers are going to twice as many movies as they went to before. Sixty to seventy percent of our subscribers say, "I wouldn't have gone to the movies if it hadn't been for MoviePass." They tend to like the movie at a higher rate. Sixty to seventy percent say they recommend it. On big titles like Justice League, we bought 1.8% of the national box office, but titles like Lady Bird, we're 10% of the national box office.

Robehmed: Are MoviePass subscribers more interested in independent films?

Lowe: They still see their Star Wars and their big films. But they use MoviePass to go to the smaller films that they previously said, "I'll wait 'til it comes out on Netflix." My real mission here is to create a better way to distribute small films that can't find an audience. When we build this to 10 million subscribers, it will be the perfect way to build opening weekend box office. Our customers have no incremental cost of going. When we recommend a film to them, we're getting anywhere from 7% to 17% of our subscribers going to that film that weekend. Our natural partners are the independent theaters and the independent film makers. If our dream comes true, we'll be having MoviePass exclusives.

Robehmed: What was your revenue for 2017?

Lowe: I can't give you an exact number because now we're part of a small public company, but it's tens of millions.

Robehmed: It’s way more than 2016?

Lowe: We did just under $9 million last year.

Robehmed: How about revenue sharing with the studios or theater owners?

Lowe: As we get bigger and bigger that starts to become material for the studios. So we're demonstrating to four studios and then a bunch of little ones how we can help them be another tool to drive awareness and ticket sales. We actually have one deal already signed. Soon you'll also see an advertising deal. And then there are discounts from the theaters. For example, there's a chain that we have a deal with, where our average cost of a ticket is $7.50. You'll see a growing number of exhibitors signing deals with us. Of course, not the big three. Not for a while anyway.

Robehmed: AMC's been very vocal in its opposition to MoviePass.

Lowe: Not so much anymore. They definitely threatened us. But now they're like, "We're happy to take their money."

Robehmed: Why were they so hostile?

Lowe: This is my third time going through this where the incumbent player freaks out. My whole passion is figuring out business models that get people to consume a lot. In every scenario, the incumbent player should have done that themselves. Then when you do it, their first reaction is, "We've got to protect our current business.” The AMCs of the world have lost touch with their customers.

Yahoo Finance: Moviepass tops 1.5M subscribers

Moviepass - the subscription movie service - announced today that it has hit 1.5 million subscribers. Joining us now with more on Moviepass CEO, Mitch Lowe, and the CEO of its parent company, Helios and Matheson, Ted Farnsworth.

Finanzen.Net: MoviePass™ Surpasses 1.5 Million Subscribers

Less than 30 days after announcing its milestone of 1 million subscribers, MoviePass™, the nation’s premier movie theater subscription service and a majority-owned subsidiary of Helios and Matheson Analytics Inc. (Nasdaq:HMNY), announced today that MoviePass™ added another 500,000 new paying subscribers since December 12, 2017. MoviePass™ subscribers can see a movie every day of the month for a low monthly subscription fee of $9.95.

Mitch Lowe & Ted Farnsworth (Photo: Business Wire)

Mitch Lowe & Ted Farnsworth (Photo: Business Wire)

"MoviePass™ is attracting people back to the movie theaters by lowering their cost, which we believe is transformational for the industry,” said Ted Farnsworth, Chairman and Chief Executive Officer of HMNY. "We believe the data MoviePass™ collects from these million and a half movie-goers will become an important asset to our partners and the future of the movie industry,” Mr. Farnsworth continued.

 

Deadline: MoviePass Jumps Past 1.5M Subscribers In The Post-Holiday Period At The B.O.

 

Less than 30 days after hitting 1 million subscribers, Helios and Matheson Analytics’ MoviePass has now swelled to 1.5M monthly customers.

 

“MoviePass is attracting people back to the movie theaters by lowering their cost, which we believe is transformational for the industry,” said Ted Farnsworth, Chairman and Chief Executive Officer of HMNY in a statement. “We believe the data MoviePass collects from these million and a half movie-goers will become an important asset to our partners and the future of the movie industry,” Mr. Farnsworth continued about the service which provides subscribers with unlimited movie tickets for $9.95/a month.

“Based on the dramatic increase in the number of MoviePass subscribers over such a short period of time, we believe MoviePass will continue to grow its subscriber base significantly,” added Mitch Lowe, Chief Executive Officer of MoviePass. “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.”

In a $1 billion holiday movie period where moviegoers are seeing anywhere from two to four titles in a two week period, Lowe informed Deadline in November that “We’re funded properly to pay for” the holiday box office period; that the run on the B.O. would not drain the company.

MoviePass has been met with plenty of skepticism by those in the industry, chiefly how the model of charging a monthly price that’s lower than most metropolitan average movie ticket prices can stay afloat (while the consumer pays only $9.95/a month, MoviePass pays full price for each ticket to the exhibitor). Largely big exhibitors like AMC are ticked off that an outside player is determining the new cost of a movie ticket in consumers’ heads. Studios are largely agnostic to MoviePass: The service isn’t taking any money out of their hands, and if they can drive more business to the cinema, then more power to them.

Market Watch: How MoviePass plans to make money from its more than 1 million subscribers

MoviePass announced on Dec. 20 that it had surpassed 1 million subscribers 

Source: Getty Images

Source: Getty Images

MoviePass, the $10-a-month subscription service allowing moviegoers to see a film a day at cinemas, has been chewed over in Hollywood — seen as both friend and foe.

The haste with which the company hit the million subscriber milestone — announcing on Dec. 20 that it had done so, just four months after lowering the subscription cost to $10 from as much as $50 — suggests consumers see MoviePass’s value.

It took Netflix, of which MoviePass Chief Executive Mitch Lowe was a founding executive and which, of course, began life as a DVDs-by-mail service, more than three years to hit the 1 million subscriber mark.

MoviePass had roughly 20,000 subscribers before the price cut, but demand for the service since has been much higher than Chief Executive Mitch Lowe expected.

Also see: MoviePass has struggled to meet demand for its $10-a-month movie-ticket deal

Check out: MoviePass helped drive record attendance at Studio Movie Grill cinemas

However, those in the industry and others following the business are concerned that MoviePass’s model is unsustainable. The question is how a movie-theater subscription company subsidizing its members’ potentially expensive film-going habits can be profitable?

“It’s about the data,” said Ted Farnsworth, chief executive of Helios & Matheson Analytics Inc., which owns a majority stake in MoviePass.

Helios & Matheson shares HMNY, +1.11% have been on a tear since the company took its majority position in August. Shares are up about 102% since that time. The stock has been volatile, too, reaching an intraday high of $38.86 per share in October, but closing Thursday at $6.90 a share.

Read: Costco offering members MoviePass and streaming Fandor service for $89.99 a year

Short seller Andrew Left warned retail investors in October that Helios & Matheson shares would fall back to $20, and that MoviePass would never be a $1 billion company.

“I’m not worried about it,” Farnsworth told MarketWatch. “He’s a short seller, so he’s got to cover his squeeze. But the bottle will stand on its own.”

Some critics of the MoviePass business are concerned the company won’t be able to make money and will flame out, further hurting already troubled theater chains, or that it will have to raise subscription prices and drive users away

When Helios & Matheson acquired MoviePass, the company also cut the price from as much as $50 a month to $9.95. But it is still shelling out the full price of tickets to studios and movie theaters.

According to the National Association of Theater Owners, the average cost of a single movie ticket was $8.65 in 2016 — and double that figure in some major U.S. cities.

See: Former Netflix executive wants to shake up moviegoing with $10 MoviePass service

Also read: MoviePass has struggled to meet demand for its $10-a-month movie-ticket deal

“The deal from our side and why we’re excited is we still get paid the full price of admission. If this succeeds in driving attendance, it will pay for itself,” said Chris Aronson, head of distribution at 20th Century Fox FOXA, +3.65% . “And they’ve made no secret that their goal is to mine data from subscribers. We’d be very interested in that.”

That’s exactly what Farnsworth and MoviePass’s Lowe are banking on. 

“Making money putting people in the theater is fine, but also think about the advertising side,” Farnsworth said. “We’re the only company out there that can tell companies exactly who and when people are going to the movies.”

 

If MoviePass is able to prove that it can drive incremental box-office revenue to studios and cinemas, Lowe said, the company can strike deals to share in the revenue from those sales, as well as from concessions.

Read: Is MoviePass’s $10-a-month movie ticket deal really as epic as it seems?

That could then lead to studios paying MoviePass to promote films to its users. MoviePass has experimented with this already, and Farnsworth said 18% of users go to movies after prompting by the MoviePass app.

Farnsworth and Lowe said they want to partner with restaurants located near cinemas and possibly even with Uber to get users a ride to the theater. It’s all about capitalizing on a night out at the movies, Farnsworth said.

“It’s so much easier than people think,” Farnsworth said. “There are so many areas for revenue streams. Will we need to raise more capital in the future? Sure. But right now we’re focusing on growing the company and doing deals with companies already out there.”

Shares of Helios & Matheson have gained 109% in the year to date, while the S&P 500 indexSPX, +0.65% is up 20%, and the Dow Jones Industrial Average DJIA, +0.24% is up nearly 26%.

Slashfilm: MoviePass Has Reached One Million Subscribers

The movie theater ticket subscription service MoviePass shook up Hollywood earlier this year when a majority stake in the company was bought by Helios and Matheson Analytics Inc., which resulted in the monthly service dropping their price to just $10 a month. For that price, subscribers are able to see one movie each day as long as it’s not in IMAX or 3D, and they can see the same movie as many times as they want to. It’s one hell of a bargain, and movie-going audiences have been paying attention.

Just before Christmas, MoviePass subscriptions had reached 1 million paid subscribers, and if the credit given to the service for raising movie theater attendance is any indicator, the service is only going to get bigger.

“We are excited and proud to have reached the one millionth subscriber level in such a short time while still early in the consumer adoption curve. Our focus on creating the best movie theater subscription service experience for our subscribers has propelled our growth to date. We believe that growth will continue as we further develop our application, improve customer service, enhance exhibitor relations and fill movie theater seats for incredible films to be released in the future.”

Deadline says MoviePass reached this milestone in just four months. MoviePass has been around a lot longer than the past four months, but it had a relatively small number of consumers for a few years and most of their customer base was built up during the past few months. By comparison, it took Netflix 39 months to reach 1 million monthly subscribers. However, it should be noted that Netflix was the spark that lit the fire for media subscription services to take off with consumers, so it’s not necessarily a fair comparison.

Even so, the fact that MoviePass has grown so rapidly is impressive. The service has been operating rather smoothly after a rough start had customers waiting weeks to receive their Master Card debit card that they use to pay for tickets after checking into movie theaters through the MoviePass app. They’ve had some kinks in the system here and there due to the influx of new customers and the usual growing pains that come from a company expanding at such a quick rate, but they seem to be keeping most customers happy. Surely the Christmas season saw many more new subscribers gifted the service too.

We haven’t seen extensive statistics about the performance of MoviePass, but the company itself has provided some promising numbers. The service has increased opening weekend ticket sales by over 10% for some films, and subscribers are heading out to theaters even more during a film’s second week of release. Plus, Studio Movie Grill had “record attendance attributed to the help of MoviePass, led by an increase in off-peak attendance as well as with smaller films.”

This all comes after the largest movie theater chain in the world, AMC Theatres, pitched a fit about the subscription service. Of course, we learned that’s all because their own idea for a movie theater ticket subscription service didn’t pan out the way they hoped. Meanwhile, the movie theater chain Cinemark is desperately trying to keep up by creating their own subscription service, but it doesn’t quite measure up to the bargain that comes from MoviePass.

While it’s still early in the game for MoviePass, the company has made quite a splash in the film industry so far. If they keep growing, then the death of movie theaters may not be as close as some thought. But we’ll have to wait and see if MoviePass can keep this momentum going or if they crash and burn as AMC Theatres predicted.

Are you happy with MoviePass so far?

New York Times: MoviePass Adds a Million Subscribers, Even if Theaters Aren’t Sold on It

LOS ANGELES — As streaming services like Netflix and Hulu surge in popularity, movie theaters have been trying to compete by rethinking the concession counter and installing seats that resemble beds.

Yet attendance was flat at North American cinemas in 2016, and analysts are predicting a 4 percent decline in 2017, bringing ticket sales to a 22-year low.

Perhaps something more radical is necessary.

Mitch Lowe, a Netflix co-founder, certainly thought so when he took over a ticketing firm called MoviePass in June 2016. By August of this year, when MoviePass introduced a cut-rate, subscription-based plan — go to the movies 365 times a year for $9.95 a month — Mr. Lowe had been declared an enemy of the state. “Not welcome here,” AMC Entertainment, the largest multiplex operator in North America, said in an indignant August news release that threatened legal action.

Dan Steven using his MoviePass to buy a ticket this week at the AMC Disney Springs 24 theater in Lake Buena Vista, Fla.  Credit: Jacob Langston for The New York Times

Dan Steven using his MoviePass to buy a ticket this week at the AMC Disney Springs 24 theater in Lake Buena Vista, Fla. 
Credit: Jacob Langston for The New York Times

It may be time to get on board: MoviePass said this month that it had signed up more than one million subscribers in just four months. It took Netflix more than three years to reach that level when it started selling low-priced subscriptions for DVD rentals in 1999. Spotify was relatively quick, at five months in 2011. It took Hulu 10 months to reach one million later that year.

“We’re actually shocked,” Mr. Lowe said. “We seem to have hit a nerve in America.”

Mr. Lowe and Ted Farnsworth, chief executive of Helios and Matheson Analytics, which bought a controlling stake in MoviePass in August for $27 million, celebrated the milestone by cheekily posing for photos at an AMC theater in Times Square.

Mr. Lowe, who previously sparred with studios as president of Redbox, the kiosk company that rents DVDs for $1 a day, believes that ticketing can at least be a break-even business for MoviePass. The real treasure in this venture, he contends, is the trove of data about consumer tastes and habits that MoviePass can collect. It hopes to sell that data to studio marketers.

Mr. Farnsworth said, “When you apply computer science and machine learning to an industry that we believe has lacked significant innovation, useful patterns start to emerge.” If MoviePass gets big enough, it could try to demand that chain theaters sell tickets at a discount or share a slice of their concession revenue.

Helios recently raised $60 million for the expansion of MoviePass, which expects to have more than three million subscribers by the end of next year. Monthly subscriber retention is roughly 96 percent, Mr. Lowe said. About 75 percent of MoviePass users are millennials, a group that Hollywood has struggled to turn into avid moviegoers.

“Millennials understand us because they grew up on subscription,” Mr. Lowe said.

Dan Steven, 34, signed up for MoviePass in October. Mr. Steven, who lives in Orlando, Fla., said he had gone to “maybe one movie a month” before he became a subscriber. In November, he went 12 times.

“I used to only go if it was clearly worth buying a ticket — something big-screen worthy, a spectacle or a movie with a lot of effects,” he said. “I would skip the undercard movies. I would just wait until they came out on Netflix.”

Over the last decade, theaters have spent billions of dollars to enhance the moviegoing experience. Improvements include the ability to reserve seats online, reclining seats, bigger screens, and better sound and projection systems. But the business has remained more or less the same for decades (sell ticket, serve popcorn, show movie) even as nearly every other area of media (television, music, publishing) has been forced to reinvent itself to contend with digital disruption.

As the popularity of MoviePass demonstrates, theater owners may no longer be able to avoid fundamental change. In particular, studios are expected to force exhibitors in the coming months to loosen their grip on new movies. Theaters have typically insisted on a 90-day period of exclusivity. Studios want to shorten that window and speed films to home video-on-demand services.

“This is something that has to happen, in part because consumers are demanding it,” Jim Gianopulos, chairman of Paramount Pictures, said at an investor conference in September.

MoviePass, which has been around since 2011, struggled to gain traction in its early years because of pricing ($50 a month, later lowered to $35) and pushback from exhibitors, who worried that a subscription service would undermine per-ticket pricing. By early 2017, MoviePass was trundling along as a fringe service; it had about 20,000 users in the United States.

When Mr. Lowe and Mr. Farnsworth drastically lowered the price, people started signing up en masse.

To a degree, the service depends on traditional subscription economics: More people pay than go. The model starts to get more complicated, however, when you consider the price of movie tickets.

According to the National Association of Theater Owners, tickets cost an average of $8.93. But theaters in cities like New York, Los Angeles and San Francisco charge as much as $16.50 for a standard ticket. At Mr. Steven’s local theater in Florida, they are $11.92.

So far, none of the major studios have signed on as clients, and no studio executive contacted for this article would comment on the record. Mr. Lowe said MoviePass had been “making huge progress with content owners” and had signed up a small studio as a partner, but he declined to provide details.

The big theater chains have held their ground, although AMC recently softened its stance. A bit.

“We appreciate their business,” Adam Aron, AMC’s chief executive, said on a conference call with analysts last month. But Mr. Aron added, “AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue.”

Regal, the No. 2 multiplex chain, has said it will take a “wait and see” approach to MoviePass, while Cinemark, the third-largest exhibitor, introduced its own subscription service in early December. For $8.99 a month, members can see one movie a month and receive a 20 percent discount on concessions, among other perks. Unused tickets roll over and never expire for paying members. Mr. Lowe called the offering “vapid.”

One small theater company that has become a MoviePass investor, Studio Movie Grill, which has 30 locations in nine states, credits the service with increasing attendance, especially on weeknights.

“I know it’s getting a bad rap in some circles, but we love MoviePass,” said Brian Schultz, Studio Movie Grill’s chief executive. “Some people aren’t sure they want to pay $10 to $12 to see a movie like ‘Lady Bird.’ MoviePass takes out that hurdle.”