The Real Reason AMC Despises MoviePass: Control
You may have only recently heard about MoviePass, but they’ve actually been around since 2011. When they initially launched, the subscription plan cost $50 a month. They later lowered it to $20, and then in August of 2017, they lowered it to $9.95 which is why this previously stagnant program has suddenly exploded in popularity.
That price drop may be a fantastic deal for us as audiences, but it’s likely unsustainable, or at least it seems that way on the surface.
So what’s the catch?
MoviePass recently sold a majority stake to big data company Helios and Matheson for $28.5 million.
Helios & Matheson is not a charity though — those low MoviePass subscription prices come at a cost, your data.
“If you get a trailer right now for Spiderman on Facebook, Facebook can’t tell if you ever actually go to the movie. We can,”
Ted Farnsworth, Helios and Matheson CEO
In a Silicon Valley-type move, Helios & Matheson will keep the cost of MoviePass artificially low in order to capture a huge chunk of the movie-going marketplace, all the while collecting valuable information they think they’ll be able to sell to Hollywood someday soon. But that’s not the only way MoviePass will make up for the low-subscription costs.
Under today’s lack-luster theater-going climate, MoviePass has been successful at negotiating deals with smaller, independently-owned theaters that agree to pay MoviePass a commission on ticket AND concession sales.
But while that kind of deal is a lot less risky for small theaters to get on board with, it’s not such an easy pill to swallow for theater giant AMC.
In fact, even the suggestion of a deal like this inflamed AMC so much that CEO Adam Aron asserted: “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.”
This statement, though, hasn’t threatened MoviePass as they continue to march forward with their grand strategy.
MoviePass’ big bet
On Thursday, January 25th, movie-goers discovered they could no longer use their MoviePass debit card at some of AMC’s top-earning theaters. MoviePass later claimed responsibility on Twitter, informing customers they no longer supported those theaters.
Ladies and gentlemen, this is a full-on standoff.
MoviePass is betting their customers are so loyal, they’ll drive or walk the extra distance to find a MoviePass supported theater. And if their bet is correct, it could mean AMC will have to start playing ball.
MoviePass is playing a long-term strategy here, and if they are successful they have the potential to send AMC the way of the Blockbuster.
Mike Maffattone is the founder of Gigareef, a web and app development company. Check out our work: gigareef.com
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