MoviePass, the ticket service for cinemas that skyrocketed in 2017 and went into bankruptcy protection two years later, is looking for a fresh start in Hollywood.
Co-founder Stacy Spikes repossessed the company on Wednesday after a bankruptcy court in southern New York City approved the sale on Monday. Spikes said the company is looking into the possibility of a relaunch in the near future.
The theater industry has changed dramatically in the two years that MoviePass has been out of service. The global Covid-19 pandemic has closed cinemas and clogged the production pipeline, resulting in above-average box office profits while the industry worked on rebuilding.
MoviePass’ resurrection attempt comes at a time when many cinema chains have stepped up their own paid loyalty programs to include ticket subscriptions and discounted concessions.
Not only would the company have to navigate its way through a new industry landscape and those competing reward platforms, but it would also have to create a sustainable business model, which it couldn’t achieve before closing in 2019.
“AMC A-List was born from the ashes of Movie Pass and has become indispensable for many avid moviegoers,” said Jeff Bock, senior analyst at Exhibitor Relations. “It will be difficult to attract current subscribers, given the plethora of problems MoviePass cardholders encounter.”
“I’m not saying it can’t work, but many potential subscribers will be extremely careful with this sequel,” he said. “Could it help the box office? Sure. But they’d better have a better business plan if the company is to survive long-term.”
MoviePass was founded in 2011 and was acquired by Helios and Matheson Analytics in 2017. Initially, the service offered its customers a movie voucher per day for $ 30 to $ 40 per month before moving to $ 10 per month. The hope was that most subscribers would not use the service regularly, just as gyms are able to compensate cheap monthly fees for no-shows.
However, many MoviePass subscribers who signed up in droves in 2017 began to overuse the service and the company began to lose money quickly. In an effort to stay afloat, MoviePass began changing its subscription again, reducing the number of titles viewed in a month, and not allowing users to view the same movie twice.
The subscription rose from more than 3 million members to around 225,000 in April 2019. Without the support of the cinemas, which had resisted the MoviePass business model and the penetration into the industry, the company had to be dissolved in mid-September 2019.
“The proven model of losing money on every transaction and trying to make up 100% of it with volume doesn’t work,” said Eric Handler, media and entertainment analyst at MKM Partners.
AMC launched its A-list program in the summer of 2018, offering audiences up to three films per week in any format – IMAX, Dolby Cinema, or RealD 3D – as well as free upgrades for popcorn and lemonade, free refills for large popcorn, and none online -Ticket fees. In addition, the program offers users points that can be redeemed for cash for future purchases.
This service costs between $ 20 and $ 25, depending on where the customers are in the United States. Prior to the pandemic, AMC had around 900,000 A-list members who saw about 2.6 films a month. After reactivating the service in July, AMC said it kept around two-thirds of the subscribers.
Rival Cinemark has its own loyalty program called Movie Club that gives users a free ticket to one regular movie each month, 20% off, and no online fees when purchasing tickets. Introduced in December 2017, this service costs $ 9.99 per month and unused movie tickets carry over to the next month.
The company recently launched a platinum version of its Movie Club for members who visit 25 times or buy 60 tickets per calendar year. One of the main benefits is a 25% discount.
In mid-2019, Cinemarks Movie Club had more than 500,000 users. When that program was reactivated earlier this year, the company announced that membership had only dropped 6%, mainly due to expired credit cards.
The company also said that 64% of its Movie Club members have expressed an interest in becoming platinum this year. In addition, a new service for ordering food and drinks online has been introduced, which enables guests to bypass the queues and either collect their concessions at the counter or have them delivered to their seat.
Regal was the last of the major cinemas to launch this type of subscription service and hit the scene in mid-2019, just as Movie Pass was launched.
With Regal Unlimited, customers can watch as many films as they want and as often as they want. It has three tiers that range from around $ 18 to $ 24, and offers a 10% discount on all food and soft drinks, free large popcorn and soda on the user’s birthday, and no blackout days on movie reservations.
The main difference between the three tiers is the number of cinemas users can access when choosing their movies. The lowest level is accessible to 200 theaters, the medium level to 400 theaters, and the highest level to 550 locations in the US
“MoviePass cannot do what A-List and Movie Club can, as those two services can also offer concession benefits,” said Handler. “An independent service is very unlikely to work unless there are smaller circles that might want to offer some kind of white-label service.”