MoviePass Cuts Service To 10 AMC Theaters
MoviePass may offer an all-you-can-watch movie theater subscription service, but that doesn’t mean members can watch movies wherever they want.
Cardholders got a harsh reminder of this limitation on Thursday, when some discovered that MoviePass no longer worked at some of their favorite AMC locations, including the AMC Empire 25 in New York City, AMC Universal CityWalk 19 in Los Angeles and AMC Loews Boston Common.
The service already eschewed such high-priced venues as ArcLight, Landmark and iPic.
MoviePass relaunched in August with an all-you-can-watch movie subscription plan for $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 average cost of one movie ticket — and a lot less for many moviegoers.
Earlier this month, the company announced it had surpassed 1.5 million subscribers.
Meanwhile, MoviePass, which is majority owned by Helios and Matheson Analytics Inc., 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.
From the get-go, AMC (NYSE: AMC) wasn’t buying it, though in a November earnings conference call, CEO Adam Aron pointed out that according to the exhibitor’s records, MoviePass paid AMC an average $11.88 for their mutual customers.
“That’s very gracious of them and 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,” he said.
Other movie theaters reportedly are playing ball with MoviePass, with Deadlinereporting that the company has made deals with nearly 1,000 independent theaters for $3 for every moviegoer it sends their way and/or one-quarter of concessions sales.
“As we’ve grown our subscriber base, we’ve seen a dramatic increase in movie theater attendance among our subscribers, which proves to us that MoviePass is working to revitalize a declining industry,” said Helios and Matheson Chairman and CEO Ted Farnsworth in a statement issued Friday morning. “Other theater companies have seen this attendance resurgence and have approached MoviePass to collaborate. Since the get-go, AMC has not been interested in collaborating with MoviePass — a move that is not in the interest of our subscribers and AMC theater-goers.”
Farnsworth went on to contend that MoviePass could be adding more than $200 million to AMC’s coffers. Here’s his math:
“We know that we currently represent approximately 62 percent of AMC’s operating income, assuming that AMC is flat year over year. This equates to $34.4 million of gross profits to AMC in the upcoming quarter. On an annualized run rate basis, that’s over $135 million to AMC’s gross profits — which doesn’t include concession sales from MoviePass subscribers. In publicly disclosed 2017 financial documents, AMC claimed each customer spends $4.88 on concessions each visit — meaning MoviePass subscribers could bring an additional $17.1 million in AMC concession revenues for Q1 of 2018, which on an annual run rate means $68.4 million more — an annualized run rate going forward of over $203.4 million revenue from MoviePass subscribers.”
MoviePass said it pulled 10 AMC theaters — less than 2 percent of cinemas — because it knows from internal testing that its subscribers are not loyal to particular theaters.
“They’re happy to drive by a theater that may be closer to a theater that will accept MoviePass — because of the MoviePass value,” Farnsworth said.
The tiff between MoviePass and AMC comes on the heels of the former announcing its latest strategy to make money: MoviePass Ventures, a wholly owned subsidiary that will co-acquire films with distributors. The initiative partnered with The Orchard to acquire North American distribution rights to “American Animals” for $3 million out of Sundance. The art heist drama stars up-and-coming actors Evan Peters and Barry Keoghan.
SOURCE: (BIZ JOURNALS)