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MoviePass: How it changed the game but couldn’t play in it

MoviePass, a startup that lets customers watch a movie a day at theaters for just $10 a month,...
MoviePass, a startup that lets customers watch a movie a day at theaters for just $10 a month, is limiting new customers to just four movies a month. (Source: Darron Cummings/AP)
Updated: Sep. 25, 2019 at 9:56 AM CDT
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BATON ROUGE, La. (WAFB) - Recent news of the revolutionary yet controversial movie subscription program ending its service comes as no shock to most. However, MoviePass will hold a special place as the catalyst that led to positive change for the movie-going industry as a whole.

The rise of digital media over the past decade has led to a major shift in the way people consume content. Theaters have lost their monopoly over the film industry as the only way to watch movies as soon as they are released to the public. Streaming services like Netflix and Hulu have given consumers the option to stay home and watch original, high-quality content for an affordable subscription fee.

Two years ago, MoviePass came in and applied the same strategy to the theater-going experience. Its business plan was modeled after those streaming services, giving consumers one movie ticket per day for less than $10 a month. The original price of the subscription program was $50 a month, but the price was lowered significantly in an effort to grow its subscriber base. Because of the access to extremely discounted tickets, moviegoers gravitated to the service immediately.

At the height of its run, MoviePass had more than 2 million subscribers. On the surface, it seemed like a runaway success for everyone involved; unfortunately for MoviePass, a lot of people actually used the service they paid for.

The root of its problem was that there was no deal of any kind with any major theater chain to give away discounted tickets to these subscribers. Therefore, MoviePass had to pay the full price for each ticket purchased by its users. This led to the company losing more money than was coming in, so it began taking drastic measures to ensure the survival of the service.

AMC Theaters, one of the largest film exhibitors in the country, was drawn into a very public conflict with MoviePass in January of 2018 over a revenue dispute. According to an article published by Variety, MoviePass tried to get a cut of ticket and concession sales from AMC. Ted Farnsworth, the CEO of MoviePass parent company Helios & Matheson, justified this request when he made a very public claim stating that approximately 62% of AMC’s operating income comes from MoviePass. AMC chief executive Adam Aron refuted this claim and said they would never give MoviePass any cut of their business.

“We appreciate their business, but I think it’s also important to make clear that, despite claims they’ve made to the contrary, AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue with MoviePass,” Aron said.

MoviePass then pulled its services from AMC’s 10 biggest theaters in the country. AMC did not just stand by and watch as this new business dominated the movie subscription market.

In June 2018, AMC launched its own subscription service AMC Stubs A-List. This program initially cost $19.95 a month and allowed customers to watch three movies a week on any theater screen in the country including premium formats like IMAX and Dolby.

MoviePass took to Twitter to bash this program as a blatant rip-off of their product and disrespectful towards consumers.

A-List improved on AMC’s already extremely popular Stubs rewards program and it proved to be extremely popular for the theater chain. Today, AMC A-List is the No. 1 movie subscription service in North America and is nearing 1 million subscribers.

Since then, other major theater chains like Regal and Cinemark have also joined AMC with their own version of a subscription service, leaving less room for MoviePass in the market. After adjusting its policies, prices, and services many times over the past year, MoviePass officially stopped providing its services September 14, 2019.

While it could not hang on to the success it once held, MoviePass will be known for the positive impact it had on movie-going. Movie subscription services have proved to be an extremely popular alternative to paying for each ticket individually. They allow people to give different types of movies their attention because it poses less of a risk to their wallet. Films that would typically be seen as not worthy of the price of a movie ticket are now finding expanded audiences because those with subscription services are now willing to give them a chance.

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